Channel Concepts: Distributing the Product
Read this chapter. Push and pull strategies are based on how the customer perceives a product. For example, if the company wants to sell a product, it may aggressively push it through the distribution channel and into stores with pricing incentives. This is often seen with products the customer does not have a perceived need or desire for. A pull strategy is based on satisfying a customer's wants or needs. It is almost as if the customer is pulling the product through the distribution channel. Channel membership is a distribution strategy based on the type of product in question. If quality and reliability are important, marketers will use exclusive distributions or "authorized resellers". Intensive distribution is the opposite; a marketer will allow just about anyone to carry a product. Convenience foods are a good example. Just about every check-out line in a store now has snacks and sodas.
Sam sightings are everywhere
The spirit of Sam Walton permeates virtually every corner of America. This small-town retailer has produced a legacy of US sales of USD 118 billion, or 7 per cent of all retail sales. In the US, Wal-Mart has 1,921 discount stores, 512 super centers, and 446 Sam's Clubs. Wal-Mart recently challenged local supermarkets by opening their new format: Neighborhood Markets. Overall, they have more than 800,000 people working in more than 3,500 stores on four continents.
Today, Wal-Mart is the largest seller of underwear, soap, toothpaste, children's clothes, books, videos, and compact discs. How can you challenge their Internet offerings that now number more than 500,000, with planned expansion of more than 3,000,000? Or the fact that Ol' Roy (named after Sam's Irish setter) is now the best-selling dog food brand in America? Besides Ol' Roy, Wal-Mart's garden fertilizer has also become the best-selling brand in the US in its category, as has its Spring Valley line of vitamins
So how do you beat a behemoth like Wal-Mart? One retail expert tackled this question in his autobiography. He suggests 10 ways to accomplish this goal: (a) have a strong commitment to your business; (b) involve your staff in decision making; (c) listen to your staff and your customers; (d) learn how to communicate; (e) appreciate a good job; (f) have fun; (g) set high goals for staff; (h) promise a lot, but deliver more; (i) watch your expenses; and (j) find out what the competition is doing and do something different. The author of this autobiography: Made in AmericaSam Walton.