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Turn Your Distribution Channel Into A Big Brand

By Jacky Tai

Most Singapore companies that I have spoken to agree with me that distribution channels are critical to the success of their business and most of them think that they have distribution all figured out. That is one of the reasons why nobody wants to use IE Singapore’s distribution initiative that also happens to be my area of responsibility. The other reason could be that they see me more as a branding guy so I have little or no credibility when I talk about distribution.

What happened to me perfectly illustrates one of the important principles of branding. Rule No. 4: The Power Of Focus. You need to be focused if you want to have credibility. I will discuss this interesting matter of personal branding in another article but right now I want to get back to the subject of distribution but from a branding point of view.

I feel that many Singapore companies are missing on a huge opportunity to build powerful, world class brands around their distribution channels. I do believe that Singapore companies know distribution much better than they know branding but there is actually a way that they can turn their distribution expertise into successful brand building exercises.

Successful brands are usually built when entrepreneurs introduce new categories. Brands can also been built around a particular type of distribution channel. Here are some powerful brands whose primary driving force is the distribution channel.

Dell
What is so special about a Dell computer? Nothing actually. It is no more cutting edge in terms of technology, performance or styling compared to its competitors.

In fact, from personal experience, I can tell you that all the Dell PCs that my previous company bought were so infuriatingly slow. Friends of mine in systems integration field told me that they usually reformat Dell PCs and reinstall the operating system before they will run properly. So, why is Dell the No. 1 selling PC in the world?

Dell’s strength is in its distribution channel. Dell is the first computer company to sell PCs direct to end users – which in itself constitutes a new category. No middlemen so Dell can pass the savings on to its customers. It was a revolutionary concept back then. It still is today.

Amway
Multi-level marketing may have a negative connotation in a lot of Asian markets thanks to unscrupulous operators but it helped to build the Amway brand into a multi-billion dollar company. In 2004, Amway’s China arm alone generated over US$2 billion in sales. Founded in 1959 by Richard DeVos and Jay Van Andel, Amway (short for American Way Association), Amway was the first company to focus on this unique distribution channel for home products.

L’eggs
This is the leading pantyhose brand in the US. And what makes this brand so special? Like Dell, L’eggs was a brand created specifically around a distribution channel. L’eggs was the first pantyhose brand to be sold exclusively at supermarkets. It’s hard to believe that something like pantyhose sold through supermarkets can become so big but it happened.

Domino’s Pizza
Domino’s Pizza became a powerful brand thanks to its distribution channel. It is highly focused on home delivery and they were the first pizza company to guarantee delivery within 30 minutes or your pizza is free. Is their pizza any good? I don’t think so but their distribution channel is first class and that helped to build Domino’s into the dominant brand in the pizza delivery category.

Amazon.com
What Dell did for computers, Amazon.com did for books. The world’s first bookstore to deliver books directly to customers at 30% cheaper prices. Amazon.com became a strong brand. Unfortunately, it started losing sight of what made it successful in the first place – books – and started branching out into all kinds of stuff like home appliances, consumer electronics, videos, etc. But the concept is still a powerful one. Build a virtual bookstore brand around the direct sales channel.

Akira
Among Singapore companies, Akira is a consumer electronics brand that is built around its extensive distribution channel in over 60 countries (mainly in Africa and Central Asia). Akira may not be a well-known brand in Singapore but in their key export markets, it is seen as a leader. You know you have made it to the top when people try to imitate or counterfeit your brand. It’s a big headache according to Julia Tong, Akira’s executive director, but you know what they say about imitation. The sincerest form of flattery.

Having a strong distribution channel is great but Singapore companies have to remember that in order to maximize their distribution strength, they need to build a brand around that channel. Otherwise, what they have may become commoditized by price competition.

Intel used to make memory chips. Intel used to be the No. 1 in memory chips. They had a powerful distribution channel. But Intel never built a powerful brand around their memory chip. So, when the Japanese, Koreans and Taiwanese invaded their territory, the memory chip became commoditized. Competition was so brutal that Intel had to exit that market by 1985. They shifted their focus to a new category called microprocessors but this time, Intel made sure they built a strong brand around the microprocessor.

The above article is contributed by our trainer, Jacky Tai, who started his career heading the marketing department of a start-up in the United States. Upon returning to Singapore, he worked in start-up companies as he wanted to build brands, and felt that most big brands are built from start-ups. The hyper-competition of today’s business environment taught him that very often, what differentiates successful companies from the also-rans is applying the right branding strategy. When he joined IE Singapore as branding manager, he set out to develop brand education programs to train Singapore companies, and till date, over 2,000 companies have attended them. With 12 years of experience grappling with the art and the science of branding strategies in the real world, Jacky is able to incorporate his rich experience and knowledge into a practical yet easy-to-understand guide for everyone involved in branding.

Jacky will be conducting the following public learning course at the Marketing Institute:

• Transforming Your Business Into A Brand – 3 Sep and 12 Nov 2008

 

For more information on the course, please contact Angelina or Su at 6327 7586 or 6327 7588, or email seminars@mis.org.sg

 

The views expressed in the above article do not necessarily represent those of the Marketing Institute of Singapore. No responsibility is accepted by the Institute or its staff for the accuracy of any statement, opinion or advice contained in the article. All articles on our website are copyright and no part may be reproduced without prior written permission of the Marketing Institute of Singapore.

 

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