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Marketing local products:
Short and long distribution channels

[ Summary ]

Section II
Collectively marketing local
products via long distribution channels

 

Chapter 4
Marketing channels

 


There are many different forms of marketing via long distribution channels that present progressive degrees of difficulty, leaving producers free to choose which niche (or niches) suit them best and to progress gradually from traditional distribution to export, passing through the potential minefield of mass retailing.

 


4.1 Traditional distribution

 

As a reaction to the spectacular growth in the number of hypermarkets, traditional distribution has had to reorganise to respond to rapid developments throughout the entire distribution system. However, in spite of a decline in terms of market share (number of shops, number of staff, etc.), traditional distribution, both through wholesalers/distributors and individual points of sale and/or restaurants, is still an interesting distribution channel for small food businesses in many countries.

One of the strategies adopted by traditional grocery shops in order to compete with hypermarkets has been to characterise their selection with the aim of increasing their specialisation still further. In this perspective, quality local products are often used as “tactical specialisation products” that are included in the product range to underscore the trader’s specialisation.

In order to play this role to the full, products have to be “processed” in some way at the point of sale. This means that:

  • they are displayed very prominently using clever presentation tricks (e.g. special display stands);

  • emphasis will be placed on their distinctiveness (e.g. the merchandising must refer to their origin, to the way they are eaten, to their characteristics, etc.) and sometimes a tasting session is organised.

The initiatives set up by producers to encourage and support this image policy naturally play a very important role.

Whether one is dealing with the wholesalers who supply the shops, or directly with the traders and/or restaurateurs, developing and maintaining sales in the traditional distribution sector always requires a lot of effort. The product quantities sold in each shop are generally small and competition is fierce. Consequently the problems associated with, for example, logistics, promotional and business costs and, in certain geographical areas, financial management, are compounded.

Saveurs des Pyrenées works in traditional distribution, selling to both retailers (a type of customer whose orders are worth only an average of 380 euros per month) as well as wholesalers. The association devotes part of its activities to a specific policy for motivating the wholesaler’s sales team. To do this, it organises special presentations and the director of “Saveurs” plans sales missions during which he accompanies each salesperson when they visit wholesalers.

In the case of Bia Na Ri, the segment of shops specialising in typical gastronomy and luxury catering items provides fertile ground for marketing its range of products (almost 45 different types of farmhouse cheese, together with other specialities). In order to stay in touch with this market niche, the company has devised a wide range of activities (from logistics to promotion) to tailor the service offered to each customer. This precise and meticulous work relies entirely on contacts with customers and on interpreting their specific needs. Since it must also market products made by very small businesses, Bia Na Ri has had to organise a “customised” service for its suppliers. It is probably this “intimate” knowledge of its customers and suppliers and its ability to act as a communication/information channel between the two that has established itself as the firm’s chief asset.

The promotional activities of Bia Na Ri provide an example of this working style. Bia Na Ri organises thematic evenings on the subject of cheese, to which it invites chefs and distributors. Such initiatives, which allow it to present a range, are also real forums on cheese, which provide a mass of information about how the various products are perceived, current trends, etc.


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European
Commission

Agriculture
Directorate-General