Getting Multi-Channel Distribution Right

CHAPTER 7Metrics for Intensity and Depth of Distribution Coverage*

7.1 INTRODUCTION

Thus far, we have laid the groundwork for understanding the new channel ecosystem, from the nature of intermediaries to questions of conflict and power in channel relationships. With this fundamental knowledge in place, we can now turn to a crucial question for marketers anywhere, and especially in this multichannel environment: how much and what type of distribution coverage do we need? The first step in answering this question is to find the specific metrics that will facilitate reliable analysis of the relationship between distribution and marketing objectives. In this chapter, we set up a framework for doing this and discuss in detail metrics for distribution coverage and depth. In the next chapter, we focus on metrics for distribution performance.

Marketers have developed a number of measures to assess the state of their distribution. Many of these metrics have to do with the breadth or reach of their product availability, but just as important are those that reflect depth or quality of distribution, and the two are not independent of each other, as we noted in Chapters 2 and 3. Getting breadth right helps to get the depth right too. And together, breadth and depth of distribution drive performance in the market, both for the upstream supplier and its downstream resellers. Good breadth and depth metrics can guide the efforts of marketers to match distribution to market demand and “tune” ...