Many foreign companies operating in emerging markets lack basic knowledge to enable them to design efficient distribution channels for these very specific markets, which inhibits their commercial potential. Manufacturers are too often uncommitted in the way they approach the matter of distribution, whilst at the same time lacking understanding about how to design and implement effective distribution strategies. Instead they typically base their choice of channels on underlying factors, such as the company's business strategy or market conditions, with distribution commonly seen as little more than a utilitarian task.
Many companies entering new markets quickly learn that determining the best possible sales channels is a much harder task than first thought. Finding the right distribution partners and managing them successfully is key to delivering successful distribution that drives sales and increases a company's local success.
This research note from Ipsos Business Consulting includes a general model to help companies to overcome this problem. It draws on the common characteristics of emerging markets to create a "best fit" distribution strategy solution for companies, both new entries and established manufacturers.
"Achieving Successful Distribution in Emerging Markets" should be read in conjunction with the detailed case study "Distribution Channel Strategy Design".