How to Determine Your Distribution and Sales Channel for a Successful Product Launch

RECAP

In the previous blog, we learned about how to transition your product from a niche market to a leadership position in the majority market. We learned about each customer segment’s psychology with regard to purchasing our product as we cross the chasm.

In this blog, we learn about the final strategies of taking your product to the market and that is putting a price on the product and putting it into a sale channel.

CHAPTER 7

We know that pricing and distribution methods are essential when launching a product. That starts with understanding different kinds of technology users in order to model our pricing and distribution for them and cater to their needs.

There are five kinds of technology consumers

• Enterprise executives who purchase large systems to be used across their companies. Because they are spending a lot of money, they expect skilled sales reps who walk them through how their needs are going to be met. Relationship marketing works best with this group: inviting executives to learning sessions in which experts provide insights and the executives can network amongst each other.
• End users do not spend much money, and so they respond well to promotions and discounts. They do not require a huge amount of support; email or a website would suffice to provide answers to FAQs.
• Department heads solve problems of their organizations with technology. Products that integrate well into their existing systems are preferred. Sales are made online and considerable support is needed.
• Engineers are heavily involved in design decisions and will be one of the primary decision-makers for technology purchases. They refer to online resources to find information and will connect to a salesperson at the end. Creating a channel for communicating with the manufacturer’s representatives is a huge bonus for this group.
• Small business owners don’t want to spend a lot of money and make their purchases from retail outlets. They can provide their own services but need help with marketing and sales.

With each group having their own compelling reasons to buy, product managers have to choose a distribution channel that best serves their group of customers. Once the product is successful in its target market, other channels can be used to target other market segments. However, the first channel will remain the primary channel for time to come.

Pricing has to motivate the consumers and is an important part of the distribution as each customer group has a different price sensitivity. The visionaries would pay more for a technology that gives them an unfair advantage over their competitors, while the conservatives stick with tried and true technology for a low price. The pragmatists purchase from a market leader, and they to pay a premium for it.

Regardless, the price has to convey the message that your company is a leader in the market. Once the sales channel is up and running, the rest is all about margins. Ensure your sales team is rewarded with premium as you cross the chasm.

Photo by Nathália Rosa on Unsplash

Originally published at https://amidsedghi.com on February 21, 2020.