Increasingly, small and mid size company CEO's and marketers wake each morning to a barrage of bad news despite their best efforts. Chaos is everywhere and in everything we do. How can thinking CEO's and senior marketers create more shareholder value against a backdrop of advancing global competitive threats and an ever-increasing complexity in reaching, capturing and retaining customers?First, - GET USED TO IT - it's
new business order. The so-called ‘norms' of price, product, promotion and placement no longer exist. If you think they do, then you have already lost. Realize everything is up for grabs. Next, understand that just surviving in this environment is same as losing ground and will ultimately end in failure for your business.
Capitalism is brutal and measures CEO's in simple terms - growth and profits. These twin ingredients of success go to market leaders. Creating leadership is what your firm should be about. Leadership results by fearlessly embracing change. Leadership results by boldly accepting chaotic conditions and turning them into marketing wins. Leadership results through constant innovation that provides a corporate-wide and maniacal focus on ways to increase value proposition to your targeted customer. Without this approach your business will ultimately fail.
Consider this new business axiom -- choice for many products and service has increased 100 fold! And will probably increase another 100 fold within next few years. Customers can reliably reach manufacturers half way around world, yielding more customer value, accessed through ubiquitous world-wide-web, and seamlessly delivered to their front door by FedX or boys-in-brown (UPS) in a few days. Can your firm compete?
Global Marketing, Inc. works with many small and mid size companies that are beginning to realize it's no longer about local competition. They understand that a parochial attitude towards a delivery system will not work in 21st century. However, they are not sure how to proceed.
To start with, your company mission must be driven by your customers preference for time, form and place they choose for delivery. Your delivery systems must be smooth and uninterrupted providing unparalleled pre and post sales support. This may seem a daunting task, but one that must be continually pursued if your firm is to thrive in 21st century.
Do you know how e-traffic has affected potential delivery of your products and services? Have you maximized role of channel partners in your route-to-market and go-to-market strategies? Have you researched your customers' preferred purchase location? These are complex issues for most small and mid-size businesses.
Where to start First, recognize that in this complex world-market all channels to market must be utilized - web sales, direct selling, independent sale reps, international agents, distribution, VARS/SI's, and catalog.
A short description of each of channel should help.
Direct Sales are sales people directly employed by manufacturer. Depending on company, its products and customer requirements this may be main channel to market.
Independent Reps are a group of separate, independent companies (usually under exclusive contract) that represent a number of non-competing manufactures. Usually these companies sell in a protected geographical area or application specific market niche. They receive a commission from manufacture on each sale.
Distributors are companies that typically service a mature, well installed customer base for manufacture. They work under a contract and usually take title to product through a discount program based on qty purchased. Other factors may effect discount such as local support and customer training. The distributor may charge customer whatever market bears and, by law, cannot be prohibited from selling manufacturers' goods to anyone at anytime. Distributors normally hold some local inventory to meet customer's immediate need.
System Integrators or VAD's are market enablers. These companies are local and usually focus on a particular application or product technology. They purchase manufacturer's product as a customer and add value by incorporating it to a system or customer driven solution. Unlikely they would carry any inventory and usually purchase based on a specific customer demand. These enablers are essential in early introduction of new technology. However, they also fill an important ‘gap' blending hardware from hardware vendors and software from software vendors into a usable, supported solution for end-user.
Catalog Sales has increased in importance in channel strategy of most companies. More and more, products are becoming ‘commodity' oriented. Access to product becomes key to sale. Catalog sales are just that. Usually in hard print augmented by web sites. Catalog sales typically are lower in price than other channels however usually don't provide strong on-site or local after sales support. Catalog sales appeal to techie who already understands technology as well as customer who has purchased product before and primarily needs replacement parts.
Internet sales are fast becoming a powerful force in any channel strategy. The technology is allowing very sophisticated products to be sold on-line to a wide variety of consumers. Internet simply allows customer access to your product line through on-line and secure purchasing methods. Prices, specifications and pictures of product are posted to help make sale. Usually targeted customer is one who already understands product and/or technology. The Internet sale is an excellent method to continue to retain present customers. Correctly built, Internet sales can reduce administrative purchasing costs, remind your customer what they usually purchase, and generally make it easy for them to conduct business with your firm. In today's time-crunch work environment, customers appreciate any firm that values their time and will reward them with their business.
