9.06 – Getting It Right: Place and Distribution
Effective distribution is critical to ensuring that your products or services reach your customers efficiently. Whether you’re a retailer, restaurateur, or manufacturer, understanding the best distribution channels and location strategies is essential for success.
Choosing A Location
Selecting the right location for your business is crucial, and several factors should be considered:
- Availability of Skilled Labor: Ensure that you have access to the necessary workforce.
- Support Services: Check for availability of essential services like computer support, equipment repairs, and maintenance.
- Supply Chain: Evaluate the accessibility of raw materials, components, and other supplies.
- Cost Comparison: Compare the costs of premises, utilities, and rates in different areas.
- Accessibility: Consider the location’s accessibility by road, rail, and air.
- Future Changes: Be aware of any upcoming changes that might affect your business, such as new transport routes or the closure of nearby factories.
- Competition: Analyze the presence and impact of competing businesses in the area.
- Market Image: Choose a location that aligns with the image you want to project. For instance, a high-fashion business should avoid areas known for heavy industry.
- Growth Potential: Assess whether the area is known for business growth and is favorable for new ventures.
- Commute: Ensure that you and your key employees can easily commute to the location.
Case Study: Phoenix Training
Phoenix Training, specializing in sales, management, and leadership training, initially located near London Bridge, benefiting from proximity to small and medium-sized businesses and large city corporations. Over time, as clients preferred training at their premises, Phoenix adapted by reducing their physical footprint while still maintaining a London presence.
Choosing A Location
Choosing the right distribution channel involves understanding how best to deliver your product to your customers. This process includes:
- Push and Pull Strategies: Push strategies involve getting your product into stores, while pull strategies involve marketing efforts to create demand and draw customers to the product.
- Product Movement: Consider packaging, transportation costs, and the robustness needed for your product to survive the distribution process.
- Payment Terms: Be aware of different settlement periods, as some channels may take longer to pay than others.
Consider these factors when choosing your distribution channels:
- Customer Needs: Ensure the channel meets the delivery expectations of your customers.
- Product Viability: Ensure your product can survive the distribution process, especially for perishable goods.
- Sales Volume: Ensure the channel can handle the volume of sales you aim to achieve.
- Brand Image: Choose a channel that aligns with your brand image.
- Competitor Analysis: Learn from successful competitors’ distribution methods.
- Cost-Effectiveness: Ensure the channel is financially viable for your business.
- Profitability: Ensure the channel can generate enough profit to justify its use.
Case Study: Gallagher’s Home Kitchen
When the UK went into lockdown in March 2020, Jessica and Chris Bond-Gallagher pivoted from their dream of opening a restaurant to starting Gallagher’s Home Kitchen. They quickly adapted by offering home-delivered meals, filling a gap in the market left by larger delivery services that did not cover their area. This flexibility and responsiveness to market needs enabled them to continue working and serving their community despite the challenges.
By carefully considering these factors and continuously reviewing your distribution strategy, you can ensure that your products or services reach your customers effectively and efficiently, aligning with your overall business goals
