Sales channels to reach your customers
Selling through retailers, wholesalers and other distributors
Selling through an intermediary may be a more cost-effective way of reaching your end-customers than selling to them directly.
If you are targeting business customers who prefer to deal with large suppliers, selling directly to them may not be a realistic option. Instead, you might aim to supply wholesalers who have existing relationships with those businesses.
If individual consumers buy low value quantities of your products, the best option might be to target retailers that sell similar products. Or you might choose to focus your efforts on a relatively small number of wholesalers who can in turn supply your products to many retailers.
Other distribution channels may also reach your end-customers. For example, technology suppliers often sell to resellers who can configure and install the technology to suit end-users’ particular needs.
Managing your distributors
You need distributors who will value your product. If they sell competing products, what will make them push yours?
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Think about how you set your prices. Distributors will be more enthusiastic if they can make a large profit – but setting too low a price will eat into your own margins.
Effective advertising and promotions can be vital. As well as marketing to the distributor, you can promote your products directly to end-customers. Distributors will be keener to stock and sell products that their customers are asking for.
The key terms of the supply relationship should be covered in a written contract. Key issues might include:
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how much stock the distributor will hold
what the distributor will do to promote your products
how quickly you can resupply and minimum order levels
whether the distributor has exclusive rights to your product (for example, in a particular territory)
what happens if either you or the distributor want to end the relationship
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Sachet Revolution is Back
In continuation to – C K Ranganathan, CEO of CavinKare: Rags-to-riches!!Today economic times – Small is big again: FMCGs bring back sachet cultureLet me first enumerate few latest sachet examples:1. Amul after becoming 1b$ organization to come up with1.1. 25 gms munna butter packs in retail market1.2. Small milk packs in select markets including Pune2. Kelloggs recently launched small packs of corn flakes to attract non-consumers3. Piramyd Retail too is promoting small packs in its private labels in select Tru Mart stores4. Telecom pre paid connections5. Tata Sky different packagesThis is not a new concept in India, as it was started in early eighties by Caninkare in form of their Chic shampoo and after that has shifted its gears to almost all possible categories like detergents, soaps, toothpaste, sauces, maggi chotu packs, Atta, mineral water, toiletries and the list goes on.Let us know look into the reasons for this revolution:1. Affordably priced product2. Less investment3. Reduced risk of buying4. Use and throw single serve packsFMCG organizations would like 1B population of India to atleast try their products and convert them from non-user of products/ brands to trial consumers and finally the endeavor to make them repeat consumers. How can we miss here Mr. C K Prahalad who wrote in his book Bottom of Pyramid that the volumes lie in rural India and sachetization is one key to it. The other big advantage for them is to address different consumer segments and get feedback from them as well.Now for a marketer it is very important to understand the target consumer and the geographies where this concept is successful. If you see the buying behavior of a housewife, she would like to buy detergents, food items like Atta, sauces etc in bulk, mainly because she is responsible for 4 people in the family, she would not like to revisit the shop again and again, and lastly and most important is that she get good schemes which keep running.Now have a look of a kitchen of a bachelor, who is not in a situation to cook proper food, would like to have small bottle of ketchup, small hair oil bottle, half litre or even a small pack of milk to prepare tea, compact liquid shoe polish, ready to eat packs for a single person for single serving. These bachelors who are working in IT, BPO, Sales etc makes a huge population of consumers who are ready to pay money, but for smaller packs and lie in different pockets of India.1. Gurgaon Professional bachelors2. Pune students in different colleges3. Kota students preparing for IIT4. Chandigarh – coaching centersVery interesting example of sachetization is the tiffin system. The local housewife aunty in the vicinity will prepare 2 vegetables and will pack into small foil bowls with rice/ chapattis. It is pure unbranded sachet revolution. I sometime think why the FMCG companies dont test this in some markets and see a response. When Amul can make Amul Pizza, why dont they make Amul Lunch Thali/ Amul Dinner Thali. I understand that supply chain will be in issues, but still something can be worked out.So its important for FMCG companies to take a region-centric look and look for segments which are large and profitable enough to serve.Labels: marketing, Sachets, segmentation
