Distribution and the pricing strategy
"Distribution Sells": worst quote ever read in a distributor's boardroom.
That's the recipe for another dusty bottle on the shelf.
Pushing brands is not sustainable.
My 4 reflections:👇🏻
I've often got stuck in meeting rooms discussing if we should drive distribution or ROS (Rate of Sale or Velocity).
The two aspects go hand in hand.
Brands should drive profitability ahead of availability: it's all about the pricing strategy.
- It's easy to push distribution, but not at the right RRP (Recommended Retail Price).
- If you widen the distribution, your average ROS will go down.
- If your brand has a too wide distribution, you will end up discounting.
- It's easy to put the price down, it's tough to bring it up.
If you remember just one line: retain your premium price positioning while opening up distribution. The moment you need to discount, it means you have to slow down and secure the average ROS before going wide again.
A good pricing strategy, drives consumer demand, making bottles rotate.
1 case in 1 bar is better than 1 bottle in 6 bars.
Brands are built bottom up, with the end in mind.
