Day 5: Where should we be located? Or distribution channels – Party Marketing

Day 5:
Where should we be located?
Or distribution channels

Gus was standing outside the front doors waiting for Nick. It was a week before midsummer, a wonderfully mild June morning smelling of lilac blossom.

“Today we're going to get out into reality. Get to the heart of the pulse to see what we can discover.”

“Sounds great to me,” said Nick who was having a day off from work and was therefore casually dressed in a cap and with a backpack. He felt completely underdressed next to Gus, who was correctly attired in dark suit, white shirt, Armani tie, shiny shoes and briefcase. They jumped on a bus that took them to Oxford Street in central London.

“Let's sit over there in the café on the corner and study what is happening.” People were walking or half-running in all conceivable directions and crossing the road against red lights. Cars were queuing at the traffic lights and a lot of them were honking their horns in irritation at moving so slowly. Stress, stress, stress!

“So is this the subject of the day then,” said Nick, “looking at people and cars? I must have missed that in your model.”

“Today's subject, are you with it Nick?” Gus was being serious and pretended not to hear Nick's attempt at a joke.

“OK,” said Gus, “we have already gone through the theme or the business concept. What we should provide and offer, target groups and their needs. We have talked about the competitor situation and now we have arrived at…”

He allowed the sentence to hang in the air, opened his case and produced a miniature picture of his Party Marketing Model.

“…where we should meet the customer or the guest.”

“What was it like at your party? You succeeded in getting hold of a venue that suited your requirements. The proximity to the underground and buses increased the likelihood that the guests would say yes, as it was easy to get to and from the party, exactly like the bus over there taking people to the IKEA store and back again.

“Back to the party. The food was supplied by the restaurant and the fact was that you already knew that it was good. And then there was the fantastic option of creating different rooms. It is so important that the premises and the atmosphere really harmonize with the theme. Perfect. But back to the business world. Where should the product or the service meet the customers?” continued Gus.

“But is it really so difficult?” replied Nick. “Where the customers are!”

“It might sound simple,” said Gus, “but there are lots of choices depending on which product or service you are offering, and whether you are targeting consumers or businesses. A famous marketeer once said that there are three success factors when it comes to finding customers. What do you think they are?”

“Find where the customers are located,” repeated Nick quickly and confidently. He thought that Gus's question sounded like an answer.

“Good try, so what are the other two success factors then?” Gus smiled and Nick realized that he hadn't given the answer that Gus wanted.

“OK,” said Nick curtly. “I give up!”

“Here are the three factors,” said Gus raising his voice. “LOCATION, LOCATION, and above all, LOCATION!” Gus emphasized every syllable.

“Do you mean that the location is of such importance, perhaps the most important thing of all?”

“Yes. In principle, everything can be discussed, but it probably is always important. It's a bit like when you were going to have your party. What was it that made you choose Restaurant Surprise?”

“The fact that it was easy to get there by underground and bus. And home afterwards,” Nick pointed out.

“So?” Gus looked Nick straight in the eye. “Come on!”

“THE LOCATION!” Nick felt relieved.

“The location meant that it was easy for you to generate an influx of your target group due to proximity to bus and underground. But can you imagine having more flows or channels where you could meet everyone who was invited?” Gus wondered.

“Yes, when I think about it, the office is one. Then there's the pub where we go after work, and Facebook if we were to meet virtually. And Lucy's Café perhaps.

“Always encountering the same flow of people and friends!”

“Quite. When it comes to Lucy's Café, which we both love, all the guests are enthusiastically looked after. But in terms of flows it's the same with businesses as with the party. There are flows of people that can and must be captured. Window shoppers in the city centre or people who travel to and from the railway station on a daily basis. You might, for example, choose to locate yourself there in mid-current with your own shop. Or you can cooperate with other shops and companies and sell through them…”

“Can you see the woman in red on the other side of the street? She's walking past the shops selling clothes, jewelry, watches, computers and other stuff. All she needs to do is change direction and take a few steps to the right and she will enter one of the shops. She is in the major flow, i.e. the flow of potential customers. Right now she isn't interested in entering any of the shops. But perhaps tomorrow. Or the day after tomorrow. And then she'll make a purchase. Because then a need will have emerged. And as all the shops here in the centre of town are located in a flow with a lot of people in motion every day, there is every chance that sufficient numbers will enter one of the shops and buy something. And generate good business.”

“If in fact she does walk here every day, which, of course, we don't know,” said Nick.

“No, she might just be in town to meet someone. But she is nevertheless in today's flow and so what counts is getting her into the shop by means of a tempting product, an offer or an interesting message that reminds her of a need that she has. This is what enterprise is all about. Either you are in the middle of the flow of customers, or you are in smaller flows and then other measures are required to pull in the customers.”

Gus went to fetch a napkin and produced the felt-tip pen from his inside pocket.

“The majority of companies want to be in mid-stream with the customers. Look at my little illustration here.”

“The farther away you are from the main flow, the greater is the energy required to pull in the customers. All businesses would probably prefer to have their customers in the locality, able to pop in and try the products out, and to simultaneously build up a good relationship between themselves and the customers. There are two types of flows that we are going to look at in more detail. Permanent and temporary. Look here…”

New napkin. The pen moved quickly:

Permanent/Fixed flows:

– internet

– shopping streets

– shopping centers

– retail parks

Temporary flows:

– markets

– trade fairs

– mobile meeting places

– events

– pop up shops

– exhibitions

“Permanent, or fixed flows, are basically where businesses operate every day throughout the year. This is where the customers can satisfy several needs in the same place and at the same time. They are, for example, enclosed shopping malls where the customers can pick and choose among different companies and products, without getting wet when it rains and cold in the winter. You can sit ‘outside’ at cafés and bars, look at people and take your time.”

“What are retail parks then?” Nick wondered.

“Retail parks have developed around popular businesses such as IKEA. Other companies have then followed and established themselves adjacent to them in order to benefit from the flows they have produced.”

“And then we have the internet,” said Nick, “which is home ground for me. I'm out there ‘flowing’ every day.”

“It has to be said, the internet is fantastic. But Nick, as a salesperson you have to stand out from the vast number of websites. And how do you do that?”

“Probably by having such a good website that the customers become interested in entering it,” said Nick.

“Very true, but it also requires being high up in the search engines’ rankings.” Gus picked up yet another napkin.

“A while ago I did a search for these words and look how many hits I received. Now, if I was a computer salesman scraping together customers on the web it wouldn't be very nice to be at number 100,000 in a search, would it?”

“There are an incredible number of websites,” Nick sighed.

“Yes, if you're going to sell on the internet, it's important to find unique search words and names, and to push your web address hard in all advertising and communication, and not least the website has to be professionally designed, easy to find and use and have an interesting content.”

“Shall we move onto the temporary flows then,” said Nick who wanted to get on with the napkin map.

“The temporary flows only arise for a limited time, a few days or weeks. Festivals and markets, trade fairs or sporting events where the event itself attracts people, and businesses take the opportunity to encounter customers in that particular flow.”

Gus paused briefly and contemplated the city life laid out in front of him.

“OK, this concerns flows where we can operate, but we can also hire somebody else who already has a distribution channel in the flow in which we want to locate ourselves with our products.”

“Gus,” Nick was thinking, “we usually order pizza from Pizza Express. They deliver right to the door.”

“A good example of how you can get your goods out to the customer. But it takes a lot to get customers to remember precisely that particular pizza restaurant when they get hungry. In this context it is the telephone or internet orders that are the flow. More examples?”

“The buffet cars on trains. Talk about being well placed in midstream. They are actually traveling as a part of the flow themselves, if you get what I mean.”

“I understand,” said Gus. “Good example. They have a dream location as long as there are a lot of people on the train. There are a few more examples. One is Kogi Korean BBQ in Los Angeles, which uses mobile units to drive round to different places in the city and meet its customers, and allows the flow to emerge from the surrounding houses. They serve delicious Korean Mexican Tacos day and night. On its own that might not be particularly new, but they have linked their route up to Twitter so that the customers can follow where the vehicles are and find out when and where they are available. Easily accessible and simple!

“Or the hotel that works in partnership with a bed and pillow company. The customers can test them at the hotel during the night and then make a purchase if they feel that the bed was really comfortable. And the furniture company that instituted a collaboration with a restaurant to display its furniture and textiles. The guests can fall in love with the furniture during the meal and then receive help in making a purchase. You can have as many examples of these sorts of collaborative combinations as you like…”

“On the subject of the shops’ need for flows,” said Nick. “I've always wondered about all the shops that are located on side streets far away from all the shopping centers. How can they even survive?”

“Unless it's a corner shop or a kiosk or something like that, it is often shops with specialty goods or services that people don't need every day, but when the customers do need what the shops have to offer, they go there.”

“Yes, that's what I thought. That there must be firms and shops with a local connection or uniquely strong products that the customers deliberately seek out if they are offering something unique.”

“Yes, I've got a good example of a company that succeeded in generating good flows of its own despite a not very good location, far away from the major flows of customers, the El Bulli restaurant, which is situated 100 kilometers north of Barcelona. The restaurant is considered to be among the most booked in the world. They only have 50 covers but they are booked at least a year in advance, and every year tens of thousands of people try to reserve tables. However, it doesn't just satisfy the stomach, it is an incomparable gastronomic experience for all the senses.”

“The point is to have something really interesting to offer the customers or the guests if you haven't got the hottest location in the flow,” observed Nick. “You should have something unique, a real USP.” Nick nodded proudly towards Gus and said it felt nice.

“But there are more exciting ways to reach the customers. One is to find collaborative possibilities with other companies in the flow of customers, which to some extent we have already dealt with. Entirely different businesses that can complement and strengthen each other. Another collaboration involves bookshops that operate in traditional shop premises. They get a café to move in. The customer can relax with a cup of coffee while browsing interesting literature. The café exploits the flow through the bookshop to sell a few extra cups of coffee, and at the same time the bookshop gets the customers to stay for longer over their coffee, and hopefully buy more books. A real jackpot.”

“Cooperation is the future. Utilizing each other's flows and powers of attraction can produce a lot of synergy effects,” said Gus.

“Synergy what?”

“When you put two different activities together that derive benefit from each other the result is often better than if they were on their own. You could say that one plus one is more than two. Superb maths.”

“OK, the sun has gone in and the lunchtime rush has started. That means today's meeting is over.”

“And so I guess you're going to sum up and give me some really tough homework?” Nick ventured to say, relying on the fact that Gus had a sense of humor.

“Absolutely right,” he said and started to search among all the notes and napkins for an empty one. He found one and wrote:

Where should we be located?

– start out from customers and their needs

– note which flows they move in

– get as close to the flow as possible

– cooperate with someone who is already in the flow

Nick read and understood the importance of what he had not been able to articulate a couple of hours ago, namely location, location, location.

“And for tomorrow then?” He meant the homework.

“Have a look in a few random shops and ask if you can buy any of their goods online. Note down their web address and when you get home look for the product. See whether the site is among the first ten hits. If they aren't there, check their website and see how they present themselves and what else can be purchased. OK? The same time at the office tomorrow morning.”

“Thanks for today,” said Nick. He didn't really know if he should collect up all the napkins and take them home. He left them where they were so that the next guest would be able to ponder what he and Gus had actually been up to during the morning.

On the way home he visited a few small shops and one big chain store. In most of the shops the staff were nice and accommodating and he obtained the web addresses he needed. A young girl gave him detailed information on how to buy their products from home on the web.

When he got home he was able to note that none of the companies he was looking for was in the top ten in the search engines. The last thing he did before going to bed was to quickly note down what he imagined was a metaphor that he thought he had heard in some context. What he remembered was that an ancient prophet had once said:

“If I can't come to the mountain then the mountain will have to come to me.”

He would deliver a decent report tomorrow.