Maximizing the value of your distribution channels and securing the channels you need is one of the most difficult and least understood element of the marketing mix. For mature products in mature markets the distribution channel is often where battles are fought for market share. Innovation in distribution is rare, but when it occurs, it often yields high returns for the innovating firm. When entering new markets, the challenge faced is to develop the appropriate distribution channel.

NewEdge has a unique approach to creating distribution channel strategies. NewEdge gains innovative insights through a proprietary method of interacting with distribution channel members to identify opportunities overlooked by the competition. NewEdge brings opportunities to clients that allow them to increase their market penetration by strengthening their channel relationships or building partnerships with other channels.

A unique approach to identifying distributors that will bring success: Matching distribution with your markets

Companies often seek to increase their market reach by identifying distributors within specific markets. Often they seek out companies with similar products with established distribution channels. While this is sometimes successful, it can also be very challenging as there are often time consuming efforts to define markets that will not overlap and to ensure that intellectual property, territories, or licenses are not infringed upon. NewEdge seeks creative distribution channels that overcome many of these problems. For example, NewEdge conducted a study for a tracking device. The client was initially pursuing distributorships with companies that provided similar location and tracking devices. Research revealed that an attractive market was using these tracking devices for firefighters to locate them in smoky buildings in the event of an accident. NewEdge identified companies with strong positions in the firefighting market - namely companies selling equipment such as cameras for use in smoke. These companies were attractive for carrying the tracking device because of their ongoing contact with the target market, a lack of competing products, and a strong reputation. Other distributors were identified for other markets.

Creating innovative distribution channels
One of the most challenging aspects of entering a new market is to develop the appropriate distribution channels. NewEdge faced this problem for an IT support product. Rather than explore how to enter current channels, NewEdge conducted a study to learn where the target customer was most likely to consume the services. The research showed that business travelers needed access to certain types of IT services which they often lacked on off hours while on the road. Interviews with hotel owners confirmed this need. They stated that business travelers often sought help from hotel staff and business centers at odd hours. These findings led to developing relationships with hotels to distribute and promote the product.

Strengthening Distribution Channels
Companies with mature products in mature markets often find that the distribution channel is where the real battle for market share is won. It requires astute insights in order to identify ways to improve channel relationships. NewEdge found opportunities for strengthening channel relationships in the chemical industry. Through interactions with channel members along the entire channel, NewEdge learned of unmet needs in packaging convenience, joint R&D efforts, and communication efforts with others in the value chain or distribution channel. These discoveries resulted in competitive actions that improved the position of the client firm.