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?

WSJ: NBC Super Bowl Ads to Cost $3 Million

By MATTHEW FUTTERMAN and SUZANNE VRANICA
May 6, 2008; Page B8

The Super Bowl has always been a tough ticket, but now NBC is telling advertisers it will cost them $3 million just to get into the game -- for 30 seconds.

COMMENTS

• Guess it is not to early to tell people how much $$$$$ they need to get to run ads
• Especially when we are talking $3 million for 30 seconds
  
• "It represents a price increase of more than 10%, roughly double the usual annual rise."
• How are they going to convince marketers that this is reasonable?
• Is there going to be some ads on the website [included in the price]?
• This would be helpful if it brings additional exposures and dwell time on viewers.
• Gonna be interesting to see how buyers react to this.
  
• Are they under the gun to buy time no mater the price?
  
• How is effectiveness per dollar spent going to be measured?
• The key for the marketer is a profitable response; profits generated must greater than the investment.

What are your thoughts?