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Choosing the Right Retail Partners
With the high cost of entering the retail channel today, let’s put the emphasis on the word “partnership”. It is imperative to be on the same page as the retailer with regards to expectations on both sides. The retailer relies on the manufacturer’s commitment to advertise and promote the product, via traditional media venues, as well as through the retailer’s own channels – store fliers, on-shelf and off-shelf merchandising vehicles, temporary price reductions (TPR’s) – where the manufacturer pays for the cost of the price markdown – BOGO’s (“buy one get one free”).
The retailer needs to have a constant and steady supply of products in order to stay in business. However, if there is no demand for your product, the retailer stands to lose money, as your product will be taking up space that could be more profitable allocated to a product that is in demand. That’s why the sell-through strategy, advertising and support are so critical.
Without the advertising support, this inevitable creates a situation where the product does not meet sales expectations, and the retailer will either send the product back, or destroy it at great expense to the manufacturer.
- Create cost-efficient strategic marketing, advertising and sales programs
- Apply a phased approach to minimize risk and control the outlay of funds
- Get to market efficiently and effective
- Analyze your results throughout the different cycles of distribution
- Sustain distribution
- Don’t let up on the advertising if it’s working – not until your product is well established
- Drive Company growth and product sales
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Working with your Retail Partners
As a DR marketer, it’s your dream to see your product on the shelves of ten of thousands of retailers across the country! Unfortunately this dream can turn into the worst nightmare, and only after losing thousands of dollars paid to retailers for slotting and setup, and potentially millions of dollars of product sitting on the shelves and gathering dust.Take a step back and determine if you have the ability to make the leap before you venture out and lose a lot of money.Here’s a look at some of the things every manufacturer should know before embarking on the slippery slope of working with retail chains.The transition from Direct Response to Retail
- Have you created enough awareness through Direct Response advertising?
- Is there enough demand to ensure sufficient turns?
- Do you have the financial resources to pay for inventory, slotting and new item set-up?
- Each chain has a dizzying amount of different requirements – can you meet them
- Do you have sufficient human resources to deal with distribution logistics?
- Can your production capacity keep up with the retailer’s demands?
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Choosing the Right Time and the Correct Channel
Choosing the right time to roll out to Retail is not as simple as it may seem. Retailers today typically run on a “Planogram” schedule. What this means is that for every category in the store, there is an annual calendar that determines when the buyer reviews the category, adjusts the product selection, removes under-performing products and brings in new products.
Match your products to the needs of the shoppers in the specific channels. Understand the demographics and psychographics of each channels’ customers, as well as the costs associated with doing business in each channel.
Navigating the Retail minefield is not for the faint of heart. There are experts to help you evaluate and compile the right Retailers, launch strategies and resources. Construct the right foundation before embarking on building your Retail empire! |
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