DISTRIBUTION CHANNEL; RIGHT OR WRONG?

Premium products should be available through a channel that has an upscale or premium image. Brands spend a considerable amount of time and money creating an image [a story] for consumers.

When a firm gets the items below to align, there will be synergies for lack of a better word.

• Right product
• Right place
• Right promotion
  
• Right price
  
• Right image
• Right positioning
• Right consumers

When a firm gets these right they are hitting on all cylinders. Sales can reach their potential and perhaps even surpass them. How is that possible you ask. People outside the target market will see what a remarkable [Purple Cow] thing you have and they will be drawn to it.

The reason for this post is what arrived in the mail today [See picture nearby]. You get them too, sales promotion fliers and coupons. The one that jumped off the page was for Sanders Desert Topping. Here in Michigan, Sanders has been around almost forever. It is positioning to be a premium product and brand.

The problem comes from the retail channel. The ad [see page 4] was for ACO Hardware. ACO has super deals on food products in their ads. Regular price is $5.99 and the sale price is $3.99, a $2 savings. ACO and Sanders will probably move a lot of product with this coupon. The inclusion of an expiration date also adds to the consumers sense of urgency for fear of missing out on a good deal.

Upscale says limited availability, unique, quality, [fill in the blank]. There can be wide distribution and upscale. A good example is Burt's Bees products. They have [or have had] solo displays in CVS, Borders and other stores.

It appears that Sanders is purposely pursuing this channel. To get in the ad the manufacturer generally has to pay in some way. Price discounts for bulk buying for example [discounts devalue brands]. This reduces margins while at the same time increases the velocity of product movement. Short run profit may increase but adversely affect brand strength. Sanders would be better off not distributing in this channel.

What are your thoughts on branding and distribution channels?