Friday, April 6, 2018
Brands and Distribution Strategy
When I am advising start-ups and rapidly growing brands, often distribution strategy is critical to the success of the brand. Choosing the right distribution channels in the right order can make a big difference in three ways: (a) brand awareness building, (2) brand accessibility and (3) brand positioning and quality perceptions.
Usually, start-up brands have little to no awareness. If the brand in question has a first mover advantage in its category, rapid distribution expansion is critical to its success. If it is an industry disruptive brand, it sometimes needs to choose a new distribution method that circumvents prevailing distribution methods.
If the brand has only slight advantages over its competition, accessibility advantages will make a huge difference in sales and market share.
Brands that want to be perceived as luxury brands may choose more limited distribution options, focusing on those channels that will reinforce their luxury status. Sometimes a brand that eventually intends to be an aspirational luxury brand with a wider audience starts out as being very exclusive at first to establish itself among the affluent influencers first before expanding distribution to a wider audience.
Sometimes distribution expansion is sequenced based on early adoption by the most important influencer groups first.
There are many considerations in choosing the sequence of distribution expansion. It can make a difference in quality perceptions, pricing, exclusivity perceptions, perceived popularity and momentum, speed of adoption and even the ultimate success of the brand. Related issues to be considered are retailer leverage, the ability to control price discounts and perceptions, exclusivity, brand association transfer (between retailer and manufacturer), service and technical support levels, ability to control brand identity and customer experience, access to end consumer data and channel conflict.
I hope this helps you think about distribution in a more strategic way as it relates to brands and branding.