Route to Market

Route-to-market strategy.

The primary objective of a route to market strategy is to ensure that the products reach the clients/customers in an efficient and effective manner, thereby ensuring satisfied customers and increased sales growth. Developing a high performing route to market strategy involves focusing on the right markets, with alignment to the behaviours and needs of the customers in those markets. To ensure success, it is vital to choose the right sales channels, products, and value propositions, which would consequently result in a company that delivers high revenues, profitability, and customer loyalty.

Start with the customers

Route to market intelligence involves identifying the depth of understanding that a company has to its customers, their expectations, behaviours, and needs. All route to market decisions largely depends on this kind of detailed information. To gain a better idea of what their customers want, businesses must interact directly with the customers through focused interviews, customer surveys, or prototype testing. Then, understand what makes the company’s products or services add value to the customers. It is also critical to evaluate the best channels to reach out to the target customers.

Low-cost channels for improved profitability

Sales is an area of business that can have the greatest impact on profitability, especially if it includes selling some of the products through lower-cost channels. The challenge here is to understand which channels can be used for different customers. While some products and sales transactions require more complex and expensive channels, others can be maintained by lower- cost channels such as telesales. Therefore, utilizing the correct channels can significantly affect profitability.

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Balance between market penetration and control

Using a global market coverage route to market strategy with a mix of channels can result in channel conflict, margin erosion, and even dissatisfied customers. This is especially true when channels are not tightly controlled. To stay in control, it is crucial to identify these potential risks. For instance, several luxury brands maintain quality, stability, exclusiveness and, ultimately, high margins on a defined segment of the population. At the same time, they forgo the fact that they could probably sell ten times as many products as they manufacture, but at a cost to brand image and market position.

Products sold and channel should match

Businesses must ensure that the products that they sell and the channels that they choose are suited to each other. They must try to sell products through the channels that customers use to buy the product that is being sold. It is also necessary to resort to channels that give economic sense to the point of sale.

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