Be customer oriented. Being with the client. Think of the customer. Put the customer at the center of our business. We have all heard phrases like these countless times. However, how do we reach the customer? What strategies do we follow to put our product in front of the customer and make sure that this place is the right one? The Route to market is in charge of answering this last question; that is, the set of decisions and strategies that we follow to bring our business and our products to the client: distribution channels, geographical areas, forms of commercialization, etc.
And, if it is about reaching the customer, it is to be expected that logistics play a fundamental role.
Why the Route to Market
The need to introduce the Route to Market as a strategic element has increased exponentially in recent times. The consultant Sintec highlights three aspects that are causing this increase:
New distribution channels
The further back we go in time, the simpler and fewer the channels were, a far cry from what companies experience today. Multichannel -and omnichannel- force companies to take several paths towards the customer simultaneously: traditional department stores, electronic stores, wholesalers, official distributors, own stores, discount clubs, purchasing associations, catalog sales, direct marketing… And all these options have to be addressed in a specific way.
Multiplication of categories and products
Statistics show that company catalogs are getting bigger every day. And, the more products, the more chances of having to use different channels for marketing. Even the same product, in its different presentations, can have very different channels. The small packaging for individuals that we sell from the retail trade will not share the Route to Market -or the logistics- with the larger packaging designed for companies or large consumers and that we sell only under direct order from our company.
Increase in specialized care
Customers increasingly have more information, which allows them to be more demanding with the products they are going to consume. This causes that the mere “location” of the product before the customer is often not enough. What specialized channels can we use? How can we ensure that this “positioning” of the product is accompanied by an explanation of it and its advantages? How can we receive the customer’s needs and suggestions and deliver a truly personalized response? How personalized should our product become? What logistical implications does all this have?
How to design your Route to Market
Before launching into creating your Route to Market, these are some of the questions you have to answer:
Understand the market and customers
There is no point in deciding how you want to reach the market if you don’t know what your customers are like. Where are they and, therefore, where are you going to find them? How do you like to shop? Do they buy in a single way, in different ways each of them or several at the same time? How is your competition reaching the market and how could it be done in a better way? What types of clients do we have and how can we divide them? Which Route to Market is suitable for each of them?
What do customers value in your product? How can we achieve, with our Route to Market, increase the perception of the value received? How do we improve your shopping experience? The Route to Market must have one of its critical points in the generation of value.
The role of logistics
To be able to play with all these elements, logistics will be essential. It is evident that we will not be able to have the same logistics if we have a single sales channel to attend to as if we operate with several. And the same can be applied to the types of clients: individuals, companies, urban, geographically dispersed, small or large volume deliveries, self-sale models -in which the salesperson also distributes the product-, direct marketing…
And the generation of value is also closely linked to the value proposition. Do we want to distribute in express terms as a fundamental part of our business or is it something of little relevance to us? Or the trend, for example, towards highly personalized products, which can increase the time it takes us to serve the customer -if we do not have the manufacturing finished- or increase the amount of stock that we need to have stored if we want to attend to those personalized orders in less time. time.
Reverse Logistics is among the great forgotten when it comes to drawing the Route to Market, since it is very easy to believe that the path ends with delivery to the customer. However, for your Route to Market to be complete you must include this section, especially in return management. Poor after-sales service can hinder the entire customer experience with us.
Once all this has been seen, it is easy to understand how, faced with the same product, two different Route to Maket strategies will lead to two very different supply chains.
Objectives of the Route to Market
Among the main objectives of the Path to the Market, these three stand out:
If we reach our customers more and better, it is very possible that our number of sales will increase (although sometimes a Route to Market can assume not reaching customers to whom it was very inefficient to sell the way it was being done). Checking that the designed strategies are successful –checking that customers are where we thought and that they buy as we thought- will help you to know that you are on the right track.
Sometimes the Route to Market does not focus on the quantity but on the quality of our sales. In making better use of our resources and, therefore, raising our margins. For example, we may decide to concentrate on a retail distribution channel the sales that we used to do door-to-door self-sales, which cost us too much for the sales obtained. Or we decide to create our own and nearby distribution centers that allow us to better supply large surfaces, avoiding stock breaks. Or start selling online… The options are almost endless and you must analyze why to use or discard each of the possibilities.
Once again, here the logistics returns to take center stage. If your distribution channels are well chosen, if you know what your customer values, where to find them and how to add value, your costs will decrease. However, a chaotic distribution, where the volume of the routes is not evaluated, nor is the possible optimization through the different channels studied (different channels can partially share their logistics to be more efficient), nor are the appropriate suppliers chosen for our needs and for our value proposition, it will end up incurring costs that will weigh down the entire chain.
The Route to Market is, in short, a strategy that allows you to sell better, optimize your logistics costs and improve the service you provide to the customer. That is, a path to success.