Distribution Channels: Understanding and Managing Channels to Market
by Dent, JulianFormat: Hardcover
Pub. Date: 2008-09-01
Publisher(s): Kogan Page Ltd
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Summary
Distribution Channels explains how to get your products and services to market through the best routes or distribution channels. It covers the whole process, including accessing and servicing markets and customers, controlling brands, creating differentiation, and improving the business distribution model. This book explores the way in which a business can make money from its distribution activities through a thorough understanding of all the different business models - and explains why business models are so important. It also provides key information about all of the partners involved in the distribution chains, including distributors, wholesalers, final tier channel players and retailers
Author Biography
Julian Dent is Chairman of VIA International, a specialist routes-to-market consulting firm. He has over 25 years of experience in distribution throughout the world, specializing in channel strategy and implementation. His clients have included Barclays Bank, BP, Esso, IBM, Microsoft, Nokia, Subway and Zerox.
Table of Contents
| Preface | p. x |
| Acknowledgements | p. xii |
| Introduction and why business models matter | p. 1 |
| Introduction | p. 3 |
| Who this book is for | p. 3 |
| What do we mean by business model? | p. 5 |
| How this book is set out | p. 6 |
| Why business models matter | p. 9 |
| Distribution matters | p. 9 |
| Challenging business dynamics | p. 11 |
| Business models are key to value propositions | p. 16 |
| A structured approach to positioning your value proposition | p. 18 |
| Be careful with comparisons | p. 20 |
| Distributors and wholesalers | p. 23 |
| The role of the distributor | p. 25 |
| Distributors/wholesalers | p. 25 |
| Customer role - core functions | p. 25 |
| Supplier role - core functions | p. 32 |
| How the distributor business model works | p. 35 |
| Role defines business model | p. 35 |
| Profit is a very small number between two very big numbers | p. 36 |
| Managing working capital is a balancing act | p. 37 |
| The measures that matter and how to manage with them | p. 39 |
| Margins and profitability | p. 41 |
| Multiple margins | p. 41 |
| Gross margin and value add | p. 41 |
| Margin mix or blended margin | p. 44 |
| Contribution margin | p. 48 |
| Net margin and operating margin | p. 53 |
| Working capital | p. 57 |
| Working capital management | p. 57 |
| Supplier credit | p. 58 |
| Inventory | p. 60 |
| Customer credit | p. 63 |
| Working capital cycle | p. 65 |
| Productivity | p. 69 |
| Earn and turn | p. 69 |
| Contribution margin return on inventory investment | p. 71 |
| Returns on working capital | p. 74 |
| Sustainability | p. 81 |
| Sustainability - longer-term business health | p. 81 |
| Return on net assets and return on capital employed | p. 81 |
| Return on invested capital | p. 83 |
| Value creation | p. 84 |
| Managing value creation on an operational basis | p. 90 |
| Managing growth | p. 93 |
| Growth dynamics | p. 93 |
| Internally financed growth rate formula | p. 94 |
| Economies of scale - profitability | p. 95 |
| Economies of scale - working capital management | p. 99 |
| Risks of growth - diseconomies of scale | p. 100 |
| How to sell to distributors | p. 101 |
| What we mean by selling to distributors | p. 101 |
| The sales process | p. 102 |
| Managing the account relationship | p. 107 |
| Some rules of thumb for making compelling business cases | p. 111 |
| Summary | p. 114 |
| Final-tier trade channel players | p. 117 |
| The roles of the final-tier trade channel players | p. 119 |
| The final-tier trade channel players | p. 119 |
| The possible roles of final-tier trade channel players | p. 122 |
| Matching channel roles to channel players | p. 127 |
| Different roles command different compensation models | p. 130 |
| Customer advocates and sell-with players | p. 136 |
| Sell-with players and strategic alliances | p. 139 |
| Applying this framework to your industry sector or channel | p. 140 |
| How the business model of the final-tier trade channel players works | p. 141 |
| Role defines business model | p. 141 |
| Services come from people, either directly or indirectly (eg web-delivered) | p. 142 |
| Managing a service business | p. 143 |
| Service-based business model | p. 159 |
| Overview of service business model measures | p. 160 |
| Sales and utilization | p. 163 |
| Sales | p. 163 |
| Utilization | p. 171 |
| Gross margin and recoverability | p. 177 |
| Gross margin | p. 177 |
| Recoverability | p. 182 |
| Working capital management | p. 185 |
| The cash-to-cash cycle | p. 185 |
| Improving working capital | p. 188 |
| Value creation and growth | p. 193 |
| Value creation and improving the numbers | p. 193 |
| Managing growth - the integrated product and service business model | p. 199 |
| How to sell to final-tier trade channel players | p. 203 |
| What we mean by selling to final-tier trade channel players | p. 203 |
| Segmenting the final-tier trade channel | p. 204 |
| What the final tier looks for in a vendor | p. 206 |
| What the final tier looks for in a distributor | p. 215 |
| Managing the account relationship | p. 219 |
| Some rules of thumb for making compelling business cases | p. 221 |
| Selling 'with' the final tier in an advocacy role | p. 224 |
| Conclusion | p. 226 |
| Retailers | p. 227 |
| The role of retailers | p. 229 |
| Retailers and retailing | p. 229 |
| Catalogue and online retailing | p. 233 |
| How the retail business model works | p. 237 |
| Role defines business model | p. 237 |
| Earn and turn | p. 243 |
| Layout and planogramming | p. 245 |
| Ranging and merchandising | p. 248 |
| The measures that matter and how to manage with them | p. 251 |
| Sales (or takings or revenues) | p. 251 |
| Margins | p. 255 |
| Direct product cost (DPC) and direct product profitability (DPP) | p. 260 |
| Turns and productivity | p. 263 |
| How to sell to retailers | p. 267 |
| What we mean by selling to retailers | p. 267 |
| The sales process | p. 268 |
| Retailer challenges and their implications for suppliers | p. 268 |
| Impact of the internet | p. 272 |
| Managing retail relationships at a strategic level | p. 276 |
| Managing retail relationships at a tactical level | p. 283 |
| Selling in to the retailer's buying cycle and open-to-buy | p. 288 |
| Should you deal with retailers direct or through a wholesaler? | p. 291 |
| Summary | p. 291 |
| Key ratios | p. 295 |
| Glossary of technical terms | p. 301 |
| Index | p. 313 |
| Table of Contents provided by Ingram. All Rights Reserved. |
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