distribution with mark zimmerman - entrepreneurship 101
DESCRIPTION
This lecture offers a strategic perspective of the distribution channel options available to start-ups. It emphasizes the development of the right criteria for choosing and managing channels. Learn about the pros and cons of different channels such as inside sales, direct sales, distribution, e-commerce, franchises and integrators. Integrating sales across multiple channels is often a challenge for technology companies. A case study illustrates these points. Part of Entrepreneurship 101 http://www.marsdd.com/events/details.html?uuid=cadf3216-9614-44b1-a73e-2b7dff582447TRANSCRIPT
E101: Distribution Mark Zimmerman MaRS email: [email protected] twitter: @markzim
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The Four “P”s
Product Price Place Promotion 3
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The Four “P”s Product Price Distribution Promotion
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3 Parts: Delivery, Sales, Service
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2 Flavours: Direct, Indirect
6 It’s OK and often optimal to mix & match.
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How to Choose?
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Market type; Existing, Re-segmented, New
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Market Stage
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Complexity
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Price
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Customer Preference
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13 “Default” Choices
New Existing Re-segmented
Market Type
Early Mature Midstage
Market Stage
Simple Complex
Product Complexity
Cheap Expensive Price
Direct Indirect
Channel Type
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Other Factors
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Size of market Diversity/complexity of market
“Proximity” of market Completeness of offering Cost of channel Speed to market
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Not just a tactic...
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...for some a Strategy Amazon
Dell Zappos
Apple
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Background
1970 - Invented 1976 - Patented 1986 - Launched Sold as a complete solution, machines & coffee for a per cup price to restaurants and offices.
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Background
1970 - Invented 1976 - Patented 1986 - Launched Sold as a complete solution, machines & coffee for a per cup price to restaurants and offices.
1988 - Acknowledged dud, Nestle considers shutdown.
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Background
1989 - Jean Paul Gaillard named Commercial Director.
“Pivots”
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Separate machine & coffee. Sell to consumers.
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Machines
Made and serviced by 3rd parties. Sold through independent retail stores. Manufacturers handle delivery and stocking. Nespresso handles sales training.
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Coffee
Sold online and over the phone direct to members of the Nespresso Club. Delivered direct to consumers in 24 hours or less.
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Later
As market matured Nespresso added their own brand machines made by an OEM. Added it’s own retail boutiques to further control the sales message. Created Nespresso Pro channel to serve the office market.
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Results
12 million
machines
20 billion capsules
50 countries
30% CAGR
over 10 years
~$3 billion in annual revenue
