How Effective Is Your Distribution Network?

The Central and Eastern European (CEE) region as well as the CIS countries and Russia are growing markets that attract almost all world leading manufacturers. It is true in case of Asian manufacturers, who need more room for their products. The capacity of Asian plants and factories is more than enough to satisfy the local demand. The surplus should go beyond the country. The closest neighbors are the first to be contacted.

In the sphere of printing supplies CEE and CIS are good and tasty tidbits for Asian manufacturers, who deploy a lot of efforts to penetrate into the region. Their salesmen are hyper active, but there are still things that go beyond their power. Active sales and promotion of products are just a part of all the activities needed to get into the region. Let's see what factors should be considered:

CHOICE OF STRATEGY

From our observance and communication with various suppliers we can conclude that it is often considered normal to offer the market a product without its (the product's) clear positioning. In other words some of the companies have trouble explaining who will be the buyer of their product, how the product will be sold and who will be the end user of the product. These are all positioning aspects. Whatever! - may exclaim a manufacturer. "Our main goal is to find a distributor and sell to them". That's a good reply, but there are more subtle unpleasant things that it keeps in store for a manufacturer.

There are companies that wonder why there is no return from big distributors they work with. Everything is clear as day: the distributor does not reach the target consumers for the product. So they product is kept dusted on the shelves in a  warehouse. This cause a chain reaction: target is not reached, product is not sold, distributor stops ordering, manufacturer loses money.

CASE STUDY:

Manufacturer of compatible inkjet cartridges (M) from China supplies its product to a big Polish distributor (D1) and a small Hungarian distributor (D2). The results are different. The product sells well in Hungary and not quite well in Poland. M asks D1 why there are no more orders. D answers that the product does not sell well. M thinks it is so because there is no demand for the product in Poland. At the same time D2 makes regular orders. M presumes Hungarian market is better.