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Marketing local products:
Short and long distribution channels

[ Summary ]

Section I
Marketing local products via short distribution channels

 

Chapter 4
The different forms of marketing

 


 


4.4 Distance selling

 

The easiest products to sell using distance selling methods are those that keep well without any need for continuous refrigeration. Examples include marketing cheese by mail order - especially by Vino Selección in Spain - but this form of selling requires highly professional logistics, and success stories are few and far between. The products chiefly sold by this method are wines (which represent 70% of the turnover of Vino Selección) and canned food for which the high price per kilo warrants the transport cost.

A distinction needs to be made between mail order selling and distance selling to loyal customers:

 

4.4.1 Mail order selling


Mail order selling consists of sending to potential customers - who know neither the company nor the product - a catalogue from which they are able to purchase goods. It is a form of marketing that calls for very heavy investment (costs of setting up and publishing a catalogue, a customer file, mailshots, professional logistics and maintaining a complete range of products). Moreover, as it entails a high risk, considerable start-up capital is vital. For small companies that nevertheless wish to sell by this means, the most efficient solution is to join forces with existing mail order firms, rather than trying to start up their own system with an official catalogue. However, it is always possible to maintain a customer file on the basis of a simple leaflet: this resembles distance selling to loyal customers.

 

4.4.2 Distance selling


Distance selling consists of catalogue selling to customers who already know the company and/or product. It is a natural extension of direct selling. Once they have returned home, consumers like to buy products that they have tasted during their holidays, at a festive occasion or as a gift. By using the customer file, [1] companies can target potential buyers who already know the company and the product. The catalogue is easy to create using simple equipment (a photocopier, for example) and the farm itself can send out mailshot advertising, provided that it offers a wide enough range of products.

The success of a system of distance or mail order selling relies on two closely related requirements: continually updating the customer file and developing customer loyalty. However, the profit margins on products - up to 40% - can quickly be swallowed up by promotion costs. Rigorous management of the customer file is vital to maintaining a high percentage of return orders.


Installation requirements

  • Products which keep well.
  • Festive products or ones that are stored (e.g. wine).
  • A file of loyal customers.


Implementation

  • Management of the customer file.
  • Stock and cash flow management.


Customer requirements

  • Maintaining the human relations aspect of selling.
  • Quality/price ratio because of competition.
  • Maintaining links with the area.

 


[1] Loyalty cards, tombolas (customers
participating in the tombola have to indicate
their address on a coupon) and collecting
addresses from customer cheques are some
ways to set up a customer file.



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