distribution - entrepreneurship 101
DESCRIPTION
TRANSCRIPT
E101: Distribution Ryan Poissant - MaRS email: [email protected] twitter: @ryanpoissant
3
The Four “P”s
Product
Price
Place
Promotion 3
4
The Four “P”s Product
Price
Distribution
Promotion
5
3 Parts: Delivery, Sales, Service
6
2 Flavours: Direct, Indirect
6 It’s OK and often optimal to mix & match.
7
How to Choose?
8
Market type; Existing, Re-segmented, New
9
Market Stage
10
Complexity
11
Price
12
Customer Preference
12
13 “Default” Choices
New Existing Re-segmented
Market Type
Early Mature Midstage
Market Stage
Simple Complex
Product Complexity
Cheap Expensive
Price
Direct Indirect
Channel Type
14
Other Factors
14
• Size of market
• Diversity/complexity of market
• “Proximity” of market
• Completeness of offering
• Cost of channel
• Speed to market
15
Not just a tactic...
16
...for some a Strategy Amazon
Dell Apple
17
18
19
Background
1970 - Invented
1976 - Patented
1986 – Launched
Sold as a complete solution, machines & coffee for a per cup price to restaurants and offices.
20
Background
1970 - Invented
1976 - Patented
1986 - Launched
Sold as a complete solution, machines & coffee for a per cup price to restaurants and offices.
1988 - Acknowledged dud, Nestle considers shutdown.
21 21
Background
1989 - Jean Paul Gaillard named Commercial Director.
“Pivots”
22
Separate machine & coffee. Sell to consumers.
23
Machines
Made and serviced by 3rd parties.
Sold through independent retail stores.
Manufacturers handle delivery and stocking.
Nespresso handles sales training.
24 24
Coffee
Sold online and over the phone direct to members of the Nespresso Club.
Delivered direct to consumers in 24 hours or less.
25
Later
As market matured Nespresso added their own brand machines made by an OEM.
Added it’s own retail boutiques to further control the sales message.
Created Nespresso Pro channel to serve the office market.
26
Results
12 million machines
20 billion capsules
50 countries
30% CAGR
over 10 years
~$3 billion in annual revenue
