Getting Multi-Channel Distribution Right

CHAPTER 9The Challenge of Optimizing Distribution Breadth

9.1 INTRODUCTION

In the previous two chapters we described many of the most useful metrics for monitoring distribution breadth, depth, and performance. Measurement is necessary, but it's only the first step in matching distribution coverage and depth to demand. Recall from Chapter 3 that many of the conflicts that occur between suppliers and their resellers can be traced to under- or over-distribution, or to the division of work and pay as new layers of intermediaries slide between suppliers and end consumers. Matching distribution and demand, so that neither gets too far ahead of the other, is a constant challenge in the ever-changing marketplace. One side of the equation is to tailor the type and intensity of distribution coverage to demand, which we take on here and in the next couple of chapters. The other side of the equation is to use products and channel incentives to “adjust” demand and effort across channels and over time to match distribution, and we will discuss those activities in subsequent chapters.

Online and mobile channels are making the classic categorization of products into specialty, shopping, and convenience goods somewhat obsolete. Further, beyond the general recommendation that these three types of products correspond to exclusive, selective, and intensive distribution coverage respectively, there is relatively little to be found in the marketing textbooks on how to determine a sustainable level ...