The main sales channels for products are what. Sales channels and their types

Since the main task of a trading and intermediary company is to sell products, it is natural that the performance of such an enterprise largely depends on the effectiveness of its sales system. In this case, important points are the costs of creating and operating a sales system, the universality and uniqueness of the sales system, and its effectiveness in certain conditions.

The sales system of an enterprise can be built in various ways. Classification of distribution systems:

Traditional distribution system - consists of an independent manufacturer, one or more wholesalers and one or more retailers. All participants in the system are independent and not controlled by others; they pursue the goal of maximizing profits only in their section of the sales system.

Vertical distribution system - operates as a single system, includes a manufacturer, one or more wholesalers and retailers pursuing common goals. As a rule, one of the participants plays a dominant role. Vertical systems can be corporate, contractual or administrative.

Horizontal sales system - the union of two or more firms in the joint development of emerging marketing opportunities in a specific market.

Main types of trade and sales activities:

Direct sales - establishing direct contacts with buyers (usually used when selling means of production).

Indirect sales - sale of goods through trade organizations. Manufacturer-independent (for consumer goods).

Intensive sales - connection to the sales system of all possible resellers (for consumer goods, branded goods).

Selective (selective) sales - involves limiting the number of resellers depending on the nature of the clientele, service capabilities, level of personnel training, etc. (used for goods that require special maintenance, as well as for expensive prestige goods).

Targeted sales - aimed at a specific group of buyers (market segment).

Non-targeted marketing - marketing activities are addressed to all buyer groups.

To achieve commercial success when using one or another type of trade and sales activity, you need to carefully analyze all financial issues and conduct a comparative analysis of costs and results.

When forming a sales system for a certain product, a trading and intermediary company has to take into account many factors, the main of which are:

Features of end consumers - their number, concentration, average one-time purchase. Income level, pattern of behavior when purchasing goods, required mode of operation of the seller, services of sales personnel, etc.

The capabilities of the enterprise itself - its financial position, competitiveness, main directions of market strategy, scale of production.

Characteristics of the product - type, average price, seasonality of production and demand, requirements for storage and transportation.

The level of competition and the sales policy of competitors - the number and concentration of competitors, their sales strategy and tactics, relationships in the sales system.

Characteristics and features of the sales market - actual and potential capacity, customs and trade practices, density of distribution of buyers, average income of buyers.

Comparative costs of various distribution systems.

The development of a sales policy is preceded by an analysis of the effectiveness of the existing sales system as a whole, and for its individual elements, and the compliance of the company’s sales policy with specific market conditions. It is not so much the quantitative sales volumes by product, but also by region, that is analyzed, but rather the entire complex of factors that influence sales volumes: the organization of a sales network, the effectiveness of advertising and other means of sales promotion, the correct choice of market, time and methods of entering the market.

Analysis of the sales system involves identifying the effectiveness of each element of this system and assessing the activities of the sales apparatus.

The rationale for the effectiveness of the sales policy is the multivariate calculation of distribution costs and the selection on its basis of the optimal option for the main areas of sales activity in the target market or its segment.

An important part of product sales management is the selection of product distribution channels. This is a complex management decision that affects all other marketing decisions.

Sales of products in most cases are carried out through intermediaries. Intermediaries, thanks to their contacts, experience and specialization, make it possible to ensure wide availability of goods and bring them to target markets.

With the help of intermediaries, it is possible to reduce the number of direct contacts between manufacturers and consumers. Supply and sales organizations, large wholesale warehouses, exchange structures, trading houses and stores can act as intermediaries.

Distribution channels can be of three types: direct, indirect and mixed.

Direct channels are associated with the movement of goods and services without the participation of intermediary organizations. They are most often established between manufacturers and consumers, who control their own marketing program and have limited target markets.

Indirect channels are associated with the movement of goods and services first from the manufacturer to an unfamiliar intermediary participant, and then from him to the consumer. Such channels usually attract enterprises and firms that, in order to increase their markets and sales volumes, agree to give up many sales functions and expenses and, accordingly, a certain share of control over sales, and are also willing to somewhat weaken contacts with consumers.

Mixed channels combine the features of the first two distribution channels.

The choice of channels and methods of distribution on the market almost entirely depends on the nature of the product. The mechanism for making decisions about distribution channels is based on the economic and technological feasibility of moving goods along such a path in order to bring benefits to the manufacturer, intermediaries and the final consumer. If any element in the chain does not receive the calculated benefit, the distribution channel will be ineffective.

Often sales channels develop “spontaneously”. For example, there were several wholesalers with whom the company had been working for more than one year, and over time, ties either strengthened or the search for new partners began.

“Spontaneously” emerging channels are usually characterized by a lack of manufacturer control over prices when goods are resold by intermediaries, over the quality and quantity of the wholesalers’ client base, and the timeliness of customer service support by intermediaries. All this leads to uncontrollability and impossibility of planning sales across channels.

How to reverse this situation and choose those channels that will “deliver” the product to the target consumer segments at minimal cost? To answer this question, you can use a comprehensive assessment of distribution channels that has proven itself in practice. The purpose of using this technique is to develop sales planning for sales channels not on the basis of intuition or “from what has been achieved,” but on the basis of complete information about the prospects of a particular channel.

Work with distribution channels must begin after the company’s market orientation has been determined, i.e. The main target customer groups, development strategy and market behavior are determined. After this, the channels are assessed. The most commonly used criteria are:

• 1. Profitability of channels.
• 2. The degree of their compliance with consumer requirements.
• 3. Controllability, i.e. the possibility of further control over the movement of goods and prices.
• 4. Level of competition for the opportunity to work with the channel.
• 5. Prospects of channels in terms of long-term trends.

For each of the criteria, it is necessary to determine a scoring system that would reflect how well the criteria are expressed. In our practice, we usually use a 10-point rating scale: 1 point - the criterion is minimal, 10 points - the criterion is maximally expressed.

In general, the following indicators are subject to technical and economic analysis:

• - determining the number of possible intermediaries, based on the selling price (with and without discounts), the current market price and the likely trade margins that each channel participant will make;
• - selection of the type of intermediaries based on legal and economic characteristics and the volume of goods that they are able to purchase;
• - according to what management scheme to organize the work of your own channel (functional-linear, divisional or matrix);
• - determination of the principles of mutual settlements between the manufacturer and intermediaries;
• - assessment of the variability of distribution logistics:
  • a) warehouse: on the territory of the enterprise or closer to the consumer;
  • b) transport: your own or rented

The criteria by which a decision can be made on the sales structure of the selling enterprise are presented in Table 1.

The prospects of channels must be assessed in terms of long-term trends. Due to the rapid development of markets in the Republic of Kazakhstan, the structure of distribution channels is changing significantly.

According to experts, in the near future there will be a specialization of the wholesale link of the distribution chain: logistics companies and specialized wholesalers will have a greater advantage. The size of the traditional wholesaler group is shrinking.

Table 1 Criteria for selecting a sales channel

Accountable characteristics		Indirect channel	Comments
short
Buyer characteristics
Numerous				the principle of reducing the number of contacts plays an important role
High concentration				low costs per contact
Large purchases				the costs of establishing contact are quickly amortized
Irregular purchases				increased costs for frequent and small orders
Prompt delivery				availability of stocks near the point of sale
Product characteristics
Consumable Products				need for fast delivery
Large volumes				minimizing transport operations
Technically simple				low maintenance requirements
Non-standardized				the product must be tailored to specific needs
New goods				careful “monitoring” of a new product is necessary
High value				the costs of establishing a contract are quickly amortized
Company characteristics
Limited financial resources				costs are proportional to sales volume
Full range				the company can offer full service
Good control is desirable				minimizing the number of screens between the company and its market
Widely known				good reception from the sales system
Wide coverage				sales must be intensive

At the same time, the share of organized retail in retail sales is increasing. Retail chains are a promising channel in terms of long-term trends. Current trends in the development of sales channels are monitored and published regularly.

When forming a product distribution channel, the decision on the structure of the channel comes first, i.e. about the number of channel levels and the specific composition of channel members. When identifying possible options for distribution channels, it is necessary to determine the type of intermediaries used. Intermediaries can be classified according to a combination of two characteristics: on whose behalf the intermediary works and at whose expense the intermediary conducts its operations.

Table 2 Types of intermediaries in distribution channels

Dealers are wholesale (less often retail) intermediaries who conduct transactions on their own behalf and at their own expense. The goods are purchased by them under a supply agreement. Thus, the dealer becomes the owner of the product after full payment for the delivery. The relationship between the manufacturer and the dealer is terminated after all conditions under the supply agreement are met.

There are two types of dealers. Exclusive dealers are the only representatives of the manufacturer in a given region and have exclusive rights to sell its products. Dealers who cooperate with the manufacturer on a franchise basis are called authorized.

Distributors are wholesale or retail intermediaries conducting operations on behalf of the manufacturer and at their own expense. As a rule, the manufacturer grants the distributor the right to sell its products in a certain territory and for a certain period. Thus, the distributor does not own the products. Under the agreement, they acquire the right to sell products. The distributor may act on his own behalf.

Commission agents are wholesale or retail intermediaries conducting transactions on their own behalf and at the expense of the manufacturer. The commission agent is not the owner of the products sold. The manufacturer remains the owner of the product until it is transferred and paid for by the end consumer. The contract for the supply of products is concluded on behalf of the commission agent. Thus, the commission agent is an intermediary only for the principal, and not for the end consumer, whose money is transferred to the account of the commission agent.

Agents are intermediaries acting as a representative or assistant of another person (principal) who is principal in relation to him. As a rule, agents are legal entities. The agent enters into transactions on behalf and at the expense of the principal. Universal agents perform any legal actions on behalf of the principal. General agents conclude only transactions specified in the power of attorney.

Brokers are intermediaries in concluding transactions, bringing together counterparties. Brokers do not own products like dealers or distributors, and do not manage products like distributors, commission agents, or agents. Unlike agents, brokers do not have a contractual relationship with any of the parties to the transaction and act only on the basis of individual instructions.

Each manufacturer, based on marketing research of the sales markets for its products, determines the structure of possible distribution channels, their connection with specific categories of consumers and with each other.

After selecting the types of intermediaries in the distribution channel, it is necessary to determine the number of these intermediaries. Marketing has developed three approaches to solving this problem: intensive distribution, exclusive distribution and selective distribution. Intensive distribution involves providing stocks of products in as many retail outlets as possible. Exclusive distribution involves a deliberately limited number of intermediaries selling these products within the sales territories. Selective allocation is a cross between intensive and exclusive allocation methods.

Although sales is the final stage of the economic activity of a commodity producer, in market conditions sales planning precedes the production stage and consists of studying market conditions and the enterprise’s ability to produce products in demand, as well as drawing up sales plans, on the basis of which supply and production plans should be formed. A well-constructed system of organization and sales control can ensure the competitiveness of the company. Considering the above, it is recommended to determine a sufficient amount of information for the company and its divisions so that they can make informed decisions in the field of sales management.

I am sharing a selection of tools for attracting clients. The structure is based on the material from the book “Traction” (by Gabriel Weinberg and Justin Mares).

The word “traction” does not have an exact translation into Russian. In relation to startups, this is traction, the dynamics with which key indicators change, plus the procedure for tracking these indicators. For example, a project may be unprofitable, but show good traction - abnormal growth of the audience or frequent repeat purchases (retention) of customers, etc. This is where terms like “traction rally”, “traction map”, etc. came from.

1. Word of mouth and viral marketing / Viral Marketing
2. Media and PR/Public Relations/PR
3. Scandalous PR. Events that attract attention / Unconventional PR
4. Contextual advertising / Search Enginge Marketing - SEM
5. Social networks and media advertising / Social and Dispay Ads, SMM
6. Outdoor advertising / Offline Ads
7. Search Engine Optimization / SEO
8. Content marketing/ Content Marketing
9. Email Marketing / Email Marketing
10. Development as marketing / Enegeneering as marketing
11. Promotion through blogs / Targeting blogs
12. Partnerships, business development/Business Development
13. Direct sales / Sales
14. Affiliate programs and CPA networks / Affiliated Marketing
15. Existing Platforms
16. Conferences and demo days/Trade Shows
17. Events / Offline events
18. Lectures, public speaking/Speaking Engagements
19. Community Building

Why is this cool? If you're starting X business, all you need to do is quickly test these 19 types of acquisition channels and choose the most effective one. If you fail to attract customers from any channel, you can quickly close the startup and not be tormented by the thought “what if somewhere out there there is a super marketer who can promote my product X.” You can also try to change the value proposition, target audience and project team. In any case, we are dealing with a finite set of options that can be sorted through in a reasonable amount of time and money.

By the way, if you find the 20th type of customer acquisition channel (different from these 19), write to me, I haven’t found it yet.

It is worth saying that there are different methodologies for launching startups/new businesses. All of them, in one way or another, revolve around 3 components that define the product “Target Audience (A) - Value Proposition (V) - Sales Channel (K) ". Arkady Moreinis aptly called this combination ACM (audience-channel-message).

In most approaches, 2 of the 3 terms are fixed and the 3rd is examined. So what are the possible launch methodologies?

1. We fix the target audience (A), for example, mothers of 11th grade schoolchildren and the sales channel (K), for example, we will use only manual, direct sales, live. We go through the value proposition (V) until we find a successful combination so that the economy converges, there is potential for scaling, etc. The second step is to sort out different sales channels (K), while fixing the target audience (A) and value proposition (V). This is the methodology that is used in most accelerators, for example, in IIDF.
2. Another approach is to fix the target audience (A), value proposition (V), and sort through sales channels (K). This approach is used for projects that already have stable, repeatable sales, but have not yet learned to scale. These are the most interesting projects in terms of investment - they are already making money, and if they find a way to replicate / a successful sales channel, a new venture story is possible.
3. Third approach: we fix a value proposition (V), for example, a service for translating audio into text, and a sales channel (K), for example, facebook. We are trying to find an audience (A) with maximum LTV (revenue per client during the time he uses the service) and minimum CAC (acquisition cost). For an ordinary business, this is the worst approach: make a product and then look for an audience for it. But, if it is some kind of cool technology, for example, speech recognition or teleportation of people, then you can put the technology or value proposition at the forefront. Most Israeli startups, for example, follow this path.

What to prioritize? Audience (A), sales channel (K) or value proposition/technology (T)? My answer is to prioritize what exclusivity is possible.

In this retelling, I will mainly use approach No. 2 - we fix the target audience and value proposition and go through the sales channels.

Basic ideas for testing sales channels

The main idea is that over time, in any sales channel and in any advertising, the CTR drops to 0% and the sales channel dies (the law of burning out sales channels). Therefore, you cannot stop - you must always look for new channels. When banners appeared, their CTR reached 75% (!) Now the norm is about 0.1-1%.

In a competitive environment, the cost of attracting customers increases, and margins tend to zero. The paradox is that if in ordinary business you are given discounts for volume (when buying a batch of 100 computers, each will cost less than when buying 1), then in advertising you have to pay a premium for volume (the cost of attracting 1000 customers in terms of one, much higher than the cost of attracting 10 clients).

Studies have shown that very few businesses die due to a lack of product; almost all die due to a lack of customers and lack of sales channels.And even for those who survive, a maximum of 1-2 channels work effectively (Pareto’s law in its strictest form). That is, the goal of testing sales channels is to try 19 types and 100 methods in order to find at least one (!) that is more effective than all existing ones or where the economy will converge and focus on it. Or make sure that nothing more effective exists yet. Worst of all, different channels may work at each stage of development. They usually start with “manual” or direct sales and then move on, for example, to display advertising, which quickly “burns out”, after which contextual advertising begins to work well, then affiliate networks, SEO, etc.

This brings up the “50/50” rule of thumb—a founder should spend 50% of his time creating a product and 50% on attracting customers and developing sales channels.

The main metrics by which channel efficiency is ranked:

• How much can you buy a client for (CAC - customer acquisition costs, the cost of attracting a buyer), for example, their context in Yandex is 5 thousand rubles, and from Facebook - 3 thousand rubles.
• How many clients are in the channel (capacity) - for example, from the context - 100 clients per month, and from facebook - a maximum of 10, despite the fact that from the context it is more expensive.
• How difficult is it to connect - for example, Facebook launches in 1 minute and without moderation, in Yandex you can go through moderation for 2 days, connecting an affiliate network will take more than a month, and SEO from 3 months.
• ROI is the return on investment over time. This is the most accurate and general indicator, but also the most difficult to calculate; it is usually calculated by cohort. Here's the problem:
  1. Week #1. They invested 1 thousand rubles each in Yandex and Google. We received 5 leads from Yandex (for example, email registrations), and 10 leads from Google. Let’s call the group of these leads “cohort No. 1”
  2. Week #2. From Yandex - out of 5 leads there were 2 buyers who bought in the amount of 1 thousand rubles. From Google - out of 10 leads, there were 5 buyers who bought for 500 rubles. What ROI will be in the 2nd week, which channel is more effective?
  3. Week #3. One of those 2 buyers from Yandex returned and bought another 1000 rubles. Two of those 5 Google buyers returned and bought another 2000 rubles. What is the ROI for the 3rd week? Which channel is more effective? Write your answers in the comments below.

Now a couple of phrases about each type of sales channel.

Let me take the example of a hostel for clarity. Let's say I have a hostel with 20 beds in Krasnodar and I need to “promote it from scratch” and achieve at least 50% occupancy of guests. Naturally, I will look at analogues and see that the main channels of attraction are, for example, booking, avito, sutochno and advertising on the asphalt near the nearest station. And of course, my attempts may fail if the product itself is not of high quality (inadequate prices, bad reviews, no features), or the market is oversaturated, or the team is inadequate - there can be many reasons. By the way, all these problems will quickly emerge during testing.

What is the purpose of all these tests? Find a combination of “target audience - value proposition - sales channel”, in which CAC and other costs are minimal, and LTV is maximum per 1st client, while ensuring load > 50%.

So, let's go through the list.

Channel #1 Word of mouth and viral marketing / Viral Marketing

The idea is simple - 1 attracted user brings at least 1 new one. The most natural and ancient way. But there are several nuances:

• The basis of viral spread and “word of mouth” at all times and in all niches is a quality product, which in a useful way stands out significantly among other products in the consumer’s perception. The product causes a “wow effect” or is at least remembered, so people start talking about it and recommending it to friends online or offline. You can stand out either by doing something 2-10 times better (in price, speed, level of service, etc.), or by being the first in a certain category (“the first unmanned car”), or by creating non-standard combinations (for example, "books in pharmacies"). See about the laws of marketing.
• To achieve virality, the product must initially be designed for this. For example, so that the value from the product appears only when other people are there. Viber, Messengers, etc.
• For virality/spread to occur, the product must reach an already existing community with good communications. Zinga grew up on Facebook, Skype and Groupon on email lists, Viber on friends' phone books, PayPal on eBay.
• Formulas and laws of virality can be viewed
• How to design products to go viral

I would like to add that virality is practically the only channel for cheap products with a check of up to $10 - this includes: music, books, most mobile phones. applications, etc. Where does this come from? Very simply, all viable businesses must satisfy two simple conditions:

1. C.A.C.< 1/3 LTV — стоимость привлечения покупателя должна быть не больше 1/3 выручки, генерируемой этим покупателем за время жизни (для упрощения можно взять за 1 год). Коэффициент 1/3 получен эмпирически, для России я бы брал 1/10.
2. ROI on CAC > 100% for 6 months. Investments in attracting buyers should be recouped in at least six months; for Russia I would take 1 month.

So, if our check is $10, then we can buy a buyer for no more than $3, and this immediately blocks us from most of the available sales channels with high capacity. All that remains is virality and media publications, which are ultimately aimed at creating an initial critical mass of users. And without virality, everything quickly fades away. The second option is to work locally. It makes no sense to sell cheap items online (see reasons above), but they sell quite well offline, in retail outlets with high traffic. Our hostel is just this case - with a check of about 500 rubles. per day. But no one is stopping us from raising the average bill, ARPPU and LTV, right?

A couple of ideas for promoting a hostel through word of mouth:

• We are making a hostel in the style of “a shelter for those whose wife kicked them out of the house.” It is interesting to talk about this, it usually happens regularly, most likely it will bring friends in misfortune.
• We are making a hostel in the “dorm” style with a dedication to students - for graduates of KubSU (where I started studying at the Physics and Technology Institute, before transferring to MEPhI) who want to experience nostalgia.
• Perhaps the best audience will be business travelers from companies who, in order to earn extra money, rent hostels and buy checks for expensive hotels. Those to whom the company reimburses expenses. For them, you can make a “business hostel” with photo wallpaper of New York City lights or a minimalist white office option.

Channel #2 Media and PR/ Public Relations/PR

infographics from IAB Russia for 2015

There is a fundamental difference between online and offline publications. There is no limit on the number of pages/space on a blog – so when you post there, you are doing the blog author a favor (new content adds traffic). In print media, the number of pages is limited, so when they write, they are doing you a favor.

How does the media work?

One of the sneaky tactics to get into the media is this:

1. We write the story ourselves on a free resource like Habr or Medium
2. Next, we search the story on social media. networks. We get maximum likes/shares, etc.
3. Then we add some paid advertising (promotional posts on Facebook) - for extra. promotion
4. After which we write to journalists and opinion leaders saying that the news is cool and has attracted so many people. They share it with their audience

The media is very useful, especially if you are going to raise investments. Press attention – extra. confirmation that the project is in demand. Although, if the project is actively written about in the media, for me this is a direct signal that the founders are running out of money and are actively looking for next investors. Profitable projects that are doing well are not often written about in the press.

A couple of ideas for promoting a hostel through the media:

• Start a blog in which you chronicle events: how they chose the premises, how they made the renovations, etc.
• Describe a scandal in the style of “how our hostel almost became a brothel” and lead to the idea that now everyone who wants to live undergoes mandatory registration with passports, etc.

Channel #3. Scandalous PR. Events that attract attention / Unconventional PR

This is a continuation of the previous paragraph, but separated into a separate category. Examples of such non-standard events:

• ice cream for all Uber customers.
• Elon Musk's speech with the presentation of the Tesla battery, when the entire building was powered by their own batteries.
• a piece of ice with the inscription “PayPal - freezing your money” at the entrance to the conference.
• something special for clients. Handwritten letters and gifts from the founders.
• subsidized Groupon shares for Strubucks. When they bought certificates for 300 rubles. and sold to subscribers for 50 rubles. (subsidized 250 rubles for each certificate). At the same time, we received both PR and buyers, and cheaper than through conventional channels.

A couple of ideas for promoting a hostel through non-standard events:

• Organize a free master class on washing sheets, assembling furniture and painting walls in a hostel. The method Tom Sawyer used to paint the fence.
• A room with a “demobilization train” like in the movie DMB or arrange a “student initiation”

Channel #4. Contextual advertising / Search Engine Marketing - SEM

What's good about context? People recognized the need and even formulated it. They made a huge effort to type this query into the search bar. Small businesses spend over $100M (!) on Google Adwords every day. Key points to keep in mind when creating contextual advertising:

1. In contextual advertising, you need to strictly separate campaigns from search and companies from affiliate networks. For Google it is KMC (contextual media network), for Yandex it is YAN (Yandex advertising network).
2. Contextual advertising from search (Google, Yandex) is generally more effective (has a higher ROI) than teaser and targeted advertising (Facebook, VK, Mail) or advertising in media networks KMS, YAN due to the fact that in search people have already realized the need for “warm and “hot traffic”, and in media and teaser advertising the needs are unconscious “cold traffic”
3. Competent targeting (accurately hitting the audience) is more important than the essence of the advertisement.
4. In advertising with a picture, 80% of the effect comes from the picture and 20% from the text of the message.
5. To get traffic a) a lot b) cheaply, the only way is to create a large number of advertisements for low-frequency queries. For example, you create a core of 10 thousand low-frequency queries, where each word is searched 1-2 times a month (!) with almost zero competition and a high CTR, you get 10 thousand relatively inexpensive target transitions. The most difficult thing is to form such a large core and create 10 thousand advertising companies. For this there are automation tools like k50.ru
6. An advertising classic, the AIDA model - which is still just as effective:
   • Attention - attention
   • Interest / Offer - a catchy value proposition
   • Deadline - time limit. Why is this needed today, urgently.
   • Action/Call to action - call to action “click”
7. Position = Bid*CTR*Quality Score (behavioral factors)
8. Budget = number of transitions * cost per click
9. The first 2 ads in the search results take 80% of the target traffic (!)
10. Syntax is important (!, "", +, negative words, )
11. The main rule. 1 request = 1 ad (unambiguous utm markup). Do not try to fit several requests into one ad. It will be impossible to understand the effect.
12. The main mistakes when creating search queries:
    • 1 ad – many search queries
    • No ODC, AIDA in the ad
    • There are no specifics - there must be numbers, addresses, prices, !
    • There is no division of ads into “Search” and Display Network
    • There is no division of ads by geography
    • Quick links, addresses, reviews are not used in the ad.

A couple of ideas for promoting a hostel through context:

• Obviously, with our low check, we won’t be able to use expensive high-frequency queries like “hostel in Krasnodar” (CPA will be too high), but we can focus on the “long tail” of low-frequency queries like “hostel in Krasnodar for business travelers with checks.” Naturally, if we want to get enough traffic, we will have to make a large number of low-frequency requests + narrow the geography.
• Perhaps it would be easiest for us to use only retargeting in YAN/KMS for those who came to us from other channels, for example from blog articles.

The continuation in the form of text has not yet been completed, but it is available in the form of a webinar.

How to test 19 types of sales channels in 21 days? Course announcement

I will send a description of the remaining sales channels (from 5 to 19) to blog subscribers by email a little later; you can subscribe in the blog on the right. Plus watch the webinar recording about 20 types of sales channels

For those who want to go through and try all sales channels in 21 days, join my

Sales - supply of goods for the purpose of sale, sale by a company of products manufactured (purchased) by them. Sales is the process of a product entering the sphere of use; sales of products; delivery for the purpose of purchase and sale. Sales, to a greater extent, is a logistics operation, meaning the delivery of products to the buyer directly, or through sales intermediaries (suppliers of the buyer).

The sales system is a complex of structures for the sale of goods, including a distribution and distribution channel, wholesale and retail trade.

The main functions of the sales system are:

· formation of a product sales strategy;

· collection and processing of data reflecting consumer requests and orders;

· selection of distribution and distribution channels;

· organization of external packaging of goods;

· formation of batch sizes corresponding to the orders of individual consumers;

· rework in warehouses;

· warehousing of goods;

· transportation of goods;

· collection and processing of information received from consumers who are already using (consuming) this product, reflecting complaints, wishes and requirements;

· monitoring the sale of goods;

· Preparation of reports on actual sales.

A distribution channel is the path through which goods move from producers to consumers, thereby eliminating long gaps in time, place and ownership that separate goods and services from those who would like to use them.

In relation to the choice of distribution channels (based on the number of channel participants), a company can focus on:

· two-tier sales channel (manufacturer - final consumer);

· multi-link sales channels (manufacturer - intermediate links - final consumer):

· multi-tier distribution channels, the intermediate levels of which incur their own costs (pay the supplier and trade at their own discretion, for example, wholesale and retail trading firms);

· multi-tier distribution channels, the intermediate levels of which, as a rule, operate at the expense of the manufacturer, supplier or consumer (for example, agents can study markets and applications, prepare and sign contracts on behalf of the supplier);

· multi-tier distribution channels, the intermediate levels of which (for example, sales assistants: transport and insurance companies, banks, marketing companies, independent warehouses) help in moving goods from the manufacturer to the supplier at the expense of the supplier

In the direct distribution channel, the manufacturer sells the product directly to the consumer through its distribution network. Indirectly - through intermediaries, of which there may be several along the sequential chain of movement of goods from the manufacturer to consumers.

With a single-level distribution channel, the chain looks like: manufacturer - retailer - consumer.

A two-level distribution channel is characterized by the presence of two intermediaries: manufacturer - wholesaler - retailer - consumer.

With a three-level channel, the chain looks like: manufacturer - large wholesaler - small wholesaler - retailer - consumer.

Theoretically, there can be four or more levels of channels, but in practice they are rare, since with each new link the price of the product increases accordingly.

In individual companies, mixed distribution channels can be used for various types of products, that is, selling goods directly (direct channel) and through intermediaries (indirect).

The sales system includes traditional distribution systems, vertical marketing systems, horizontal and multi-channel systems.

The traditional system of distribution of goods is characterized by the independence of its participants, each of whom sets his own goal, regardless of the goal of the manufacturing enterprise. Therefore, no one specifically coordinates the actions of these participants; everyone tries to get their maximum profit, even to the detriment of the entire system of distribution of goods.

In a vertical system, work is coordinated by one of the participants playing a leading role. The main participants in the channel are the manufacturer and intermediaries for the sale of goods united by a common goal.

Vertical distribution systems can be of three types:

1. Corporate systems operate within a single organizational structure, united by ownership status.

2. Contractual marketing systems operate within the framework of concluded contracts and are divided into the following groups:

a) voluntary associations of retailers headed by a wholesaler;

b) retailer cooperatives;

c) franchise systems - those who have received the rights to use the company’s trademark, subject to compliance with the technology and principles of production on a paid basis.

3. The system of indirect influence is formed under the influence of the financial power of one of the participants in the system, but operates on the principles of free market relations.

A horizontal sales system is the unification of the sales systems of two or more companies to organize all marketing work to increase sales or develop a new market. Such a merger occurs when each company does not have enough funds and strength to achieve its goals.

A multi-channel sales system involves the use of both direct and indirect sales methods, i.e. trade is organized through its own network and through independent intermediaries. It is built in the form of a combined system.

Marketing: lecture notes Loginova Elena Yurievna

4. Distribution channel methods

4. Distribution channel methods

Any enterprise independently chooses its sales system and methods.

There are three main marketing methods:

1) direct – the manufacturer works with the end consumer without the services of intermediaries;

2) indirect - in the process of product distribution, the manufacturer uses independent intermediaries;

3) combined - organizations with mixed capital are used as intermediaries, including the capital of the manufacturing company itself.

An important issue for a company when organizing product distribution is the question of choosing the most effective product distribution system. In this case, you need to decide whether to sell directly or through intermediaries.

As practice shows, direct sales are profitable if:

1) the volume of goods sold is large;

2) consumers are concentrated in a relatively small area;

3) high level of service;

4) the presence of a “transit norm of goods”, i.e. the volume of each produced batch of goods is equal to the volume of the wagon (container);

5) a developed warehouse network at points of sale;

6) the cost of production is much lower than the market price, which allows you to incur expenses for maintaining your own sales apparatus;

7) the financial position of the company is quite stable;

8) the goods are not perishable and not subject to obsolescence;

9) the company has studied the market well.

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Almost all modern companies use intermediary services in the process of promoting and selling goods. Depending on the chosen strategy and the size of the organization, these can be distributors, wholesale dealers of different sizes. Companies that transfer goods from producer to consumer form marketing distribution channels.

Unfortunately, today not all companies pay adequate attention to sales channel management. Often, management “the old fashioned way” focuses on managing internal processes, although management must monitor the efficiency of the entire economic chain. However, it must be taken into account that the involvement of intermediaries is beneficial from a cost point of view - their services will be cheaper than organizing, for example, your own delivery system, and besides, they perform such work with better quality, since they can focus on performing limited functions, which ensures higher level of service provision.

Sales channels in marketing have the following functions:

In terms of external logistics, goods are moved to a potential buyer in order to ensure their availability;

In terms of marketing and sales, the necessary information about customers is collected, as well as measures to offer goods to the market;

In terms of providing related services that support and increase the value of the product.

The characteristics of distribution channels include:

The quality and quantity of services provided by distribution channels, as well as their cost;

Coverage of the distribution network by the sales channel;

The ability of individual intermediaries to carry out transactions on favorable terms;

Channel length.

Let's look at the latter in more detail. Channel length is an important parameter of any sales, that is, how many intermediaries exist on the way to the client. Sales channels in marketing significantly influence the volume of sales of goods.

The longer the channel, the more expensive the product price for the consumer. Costs range from 50% of the final cost of the product. The use of long distribution channels leads to a decrease in profitability for the manufacturer to ensure a competitive price for the product. Therefore, monitoring the efficiency of the sales channel is a determining factor in the profitability and competitiveness of the manufacturer.

Although long channels are quite expensive, a consumer goods manufacturer often has no other options for gaining a place in the market. And the capabilities and motivation of partners who are part of the distribution channel determine the possibilities of winning a buyer.

The process of determining the optimal distribution channel consists of the following steps:

1. Determining requirements for channels, establishing criteria for their evaluation, based on the goals and capabilities of the company.

2. Determination of the list of distribution channel options.

4. Evaluation of each option according to established criteria.

5. Selecting the optimal option.

Due to the fact that sales channels in marketing are important, a thorough approach to choosing the optimal structure and methods of interaction is required. This is the fundamental decision that determines the long-term performance of the manufacturer.