Channel Analysis: Intensive Distribution

INTENSIVE DISTRIBUTION:

Distribution - process of placing product on a point of sales (POS) shelf. Distribution can be horizontal and vertical, weighted and numerical.
Horizontal - distributing portfolio of the products. Increasing horisontal implies an increase in the range of brands/SKU in current POS.
Vertical - distributing though different channels. Will cover channels types later on.
Weighted - bigger POS have more weight in calculation.
Numerical - simple counting of POS you present of total.
Example:
POS A - selling 100$ per month
POS B - selling 50$ per month
POS C - selling 25$ per month
My company present only in POS A. Weighted distribution equal 100/(100+50+25) = 57%
Numerical distribution equal 1/3 =  33%

RETAIL CHANNELS OF DISTRIBUTION

Channels can be direct and inderect.
Way in direct simple: Producer - customer. You are buying directly from manufacturer.
Indirect implies 3rd party side to deliver from plant to the homestore.
P&G distribution example:
Producer - retailers - customer (P&G - Metro cash&carry - you)
Producer - distributor - retailer - customer (P&G global - P&G local - Metro C&C - You)


PROFESSIONAL DISTRIBUTION CHANNELS

professional distribution vs retail

• Hospitals 
• Tenders
• Clinics

More characteristic for Pharmaceutical industry, where level of MD's recommendation matters.

Government tenders for medical equipment purchase will be tender channel of distribution

Clinics also can distribute drugs, medical goods and some kind of FMCG products.

DISTRIBUTION BY TYPE OF DELIVERY:

Online trade (less <5% of total sales go thought):

• e-commerce
• social media

Via online stores like amazon and e-bay thousand of products selling right now, social media channel use for marketing communications, advertising.

Traditional trade (>95% of the market):

• Modern trade
• Pharmacy and care 
• Drug stores
• Single stores (not chained) 

Traditional trade also usually means indirect distribution with wholesaler and retailer - very long logistic chain, time delivery and government regulation.

For channel analysis basis is to segment you sales by type of incoming (placement)
After this you can measure:
- channel share of total revenue
- distribution level for each channel
- weighted distribution threshold (80/20 rule tells that 20% numeric distribution makes 80% turnover)
- growth trends of online channel vs traditional
- investment vs incoming by each channel (ROI) etc.

And last tip is to make SWOT analysis for each channel you present. Each action gives you wide variety of choice and can be applied to the channel strategy  

This topic was translated to English by m-translate.