You can reach your customers in a variety of ways. You can sell directly through mail order, the internet or face to face; you could choose to sell through a retailer, a sales force or an agent. The choice of ‘distribution channel’ will depend partly on the nature of your business and partly on the strategic direction of your organisation.
There are five issues to be considered, all beginning with the letter ‘c’. How much will the distribution and any storage cost? How much coverage do you want for your product or service? Will your distribution channel enable you to communicate consistently with customers? How much direct control do you need over the customer interface? Finally, with the opportunity it provides for contact with the customer, how important is distribution as a source of competitive advantage?
Having looked at distribution you now need to consider promotion. Companies selling well-known, branded products will tend to focus on activities such as advertising, aimed at encouraging customers to pull products off the shelves. Companies selling less well-known products or services may instead aim their promotional activities at the retailer to encourage the retailer to push the product. In both cases, the aim of promotion is to convince potential customers to purchase your goods or services.
Next, you’ll need to think about the customer decision-making process and the role of communication – what will help customers to be aware of a product; be interested in it, and understand how the product meets their needs; adopt a positive attitude towards the product; buy it, and make repeat purchases (which often involves developing an ongoing relationship with customers).