The forgotten P

Most B2B marketers spend far too little time thinking about product distribution.

This is an extract from IMTW № 90.

Read on to learn why:

① Place is often given little more than a cursory mention in B2B strategies.

② In B2B, the thinking about ‘place’ is predominantly about partners.

③ Finance continues to mistreat women and is losing talent as a result.

④ The future of asset management will be tokenised.

⑤ Merely catching up isn’t product differentiation.

⑥ Poor managers have fewer and fewer places to hide.

⑦ Senior leaders continue to be guided by the Stoics.

Whats new

Coffee snobs recoiled this week at the news that Nespresso was to challenge Pret and Starbucks with a cafe near Liverpool Street station.

In short:

• “Nespresso has opened its first cafe near Liverpool Street station, joining the likes of Pret A Manger, Starbucks and Costa in the coffee-to-go market.The coffee capsule brand opened its first ‘Nespresso Bar’ [Thursday] on Old Broad Street near the busy London transport hub.”
• “Coffee is a ￡19bn industry in the UK, and the on-the-go market is highly competitive. Nespresso said some 80 per cent of coffee drinkers visit a coffee shop at least once a week in the UK and over 12.8 billion cups of coffee were consumed outside the home last year. A hot latte at its new Liverpool Street will cost around ￡4.15, a similar price to Pret and Starbucks.”??
• “Anna Lundstrom, chief executive at Nespresso UK and ROI, said: ‘The Nespresso Bar represents an exciting opportunity to reach new customers in a new way; with an elevated customer experience combined with the joy of coffee discovery’.”?

Why it matters

① Every business school student has the marketing mix’s four Ps drilled into them early: product, price, promotion, place. But, if we’re honest, after graduation that last P is often forgotten or given little more than a cursory mention in our B2B strategies. Nespresso’s move matters because it demonstrates how rethinking ‘place’ (or, more accurately, distribution channel) can reap rewards, even for the most commoditised of products.

One thinks of Nespresso as an ‘at home’ product. Indeed, that was its very selling point when it first came to market: its product innovation delivered ‘barista quality’ coffee in the comfort of your kitchen, at a fraction of the price of a coffee shop, and without the hassle of grinding then cleaning up coffee beans. What is the brand now doing selling coffee in the very way its initial positioning argued so compellingly against?

The answer is growth. Having saturated the ‘at home’ market its positioning could be stretched without risk and Nestle saw an opportunity to take a page out of Chris Zook’s ‘Beyond the Core’ to generate new revenue. This strategy has the added benefit of raising brand awareness, as customers and passers by are reminded to order Nespresso capsules for use at home - the mirror opposite of Starbucks, which has long been selling its branded capsules in supermarkets.

What to do about it

Take action

② How can this be applied to your business? The consideration of how your brand and product should reach its customers applies to us all. Whether you’re offering financial services or technology, in the B2B world, the thinking about ‘place’ is predominantly about whether you sell direct or via partners.

So, in this short week before the Easter break, why not take stock of your partner strategy? Some considerations:

1. The right partners: Do you understand what makes a good partner for your business? Size, approach, culture all have a bearing on how the relationship will work.
2. A clear programme: For each of the different types of partners you want to attract, have you developed a clear structure? Is it easy for them to understand who to work with you?
3. Incentives: Partners need benefits and incentive plans; are yours compelling?
4. Sales enablement: Partners won’t be able to sell your product without help. Have you produced the right collateral for them?
5. Evaluation: Partners represent your brand and your endorsement of them creates repuational risk. Are you regularly assessing their suitability and researching their reputation amongst your customers?

And while we’re thinking about Ps, it’s worth considering the extra ones - people, process, and physical evidence - but maybe that’s a post for another Sunday…

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For the rest of this issue, including points ③, ④, ⑤, ⑥ and ⑦, visit my Substack >

About

Written for leaders in finance and tech,?InMarketing This Week?is a showcase for news likely to impact them - delivered with insight on why it matters and ideas on what to do about it. It’s published every Sunday to give you a head start on the week. Read an extract?here, or subscribe to?have the full issue delivered straight to your inbox at six, before it's available anywhere else.