Marketing Principles

Intro-

“A good product idea and a strong technical team are not a guarantee of a sustainable business. One should not ignore the business process and issues of a company because it is not their job. It can eventually deprive them from any future in that company.”

http://www.forbes.com/sites/neilpatel/2015/01/16/90-of-startups-will-fail-heres-what-you-need-to-know-about-the-10/

That is a quote from a failed digital marketing company, Dijiwan’s, senior leadership, after they attempted to branch out nationally and ended up going under because of it.

Our company should utilize an indirect marketing channel to expand our business beyond the local customer base. Using an indirect marketing channel allows us to tap into established supply chains and use a nationally known brand to help promote our own. While we could attempt to build our own channels and customer base organically, utilizing a reseller would allow us to focus almost entirely on growing and refining the product. This will allow us to truly establish our brand in the growth stage, bridging the knowledge gaps, and refining our value proposition. Once we hit the maturity stage, we will have a firm advantage over all our competitors.

There are a few minor costs associated with this move, but overall our current company structure will easily support the increase in sales. The estimated costs per sale will run us around 25%. That may seem steep, but when compared against the costs and risks of developing and relying solely on our own marketing

Rebuttal-

Initially will utilize Amazon, CDW, Staples, OfficeMax, BestBuy, and Costco to take advantage of their existing brand and reach. Advertisement will be handled as part of our agreement with the distributors. Advertising on the internet would prove to be not only expensive, but put us in competition with the distributors we plan to utilize. Furthermore, we would have a greater handle on the customer relationship, since we plan to handle customer service via a dedicated, well trained, in house team that works directly with our development teams to help close the knowledge gaps. While there are services which offer decent levels of customer assistance at a high price, the fact is they profit off of us having a subpar product so communicating details about possible deficiencies our product is not always in their best interest. The basis of our model is a focus on a higher volume of sales at a lower profit per sale, and a lower upfront investment. As our brand grows, we will better be able to scale along with the needs.

Final-

Indirect marketing channels enable us to sell our product nationally with a relatively low level of effort. We can recognize increased profits through higher volume and lower upfront costs. By placing a focus on understanding the meaning of customer service and the specific needs of our consumers, we develop a relationship with the customer that allows us to stand above the competition. Using this we can develop a model of continuous growth and improvement with a focus on quality. By working with more mature distributors we can further stand out above competitors. Lastly, as the company grows and succeeds we will have a firm foothold with which we can later consider adopting a direct marketing strategy.