Page 76 - Drinks Industry - 14 Jan 2016
P. 76
CONTENTS
STAGE 1
e) Route to Market
Continued
Understanding the inancial relationship with your distribution partner
When looking for your distribution partner, you must irst understand your product pricing
and proit margin requirements. A full analysis of your product pricing should relect your
requirements, as well as those of your distributor and the bar or retail store. This is done most
efectively through the use of a template known as a pricing tree.
Pricing Tree Analysis provides a clear understanding of all pricing and margin requirements. It
needs to include the following-
• Your margin requirements to make & sell a product proitably
• Distributor’s margin for investment in advertising & promotions
• Retailer and publican’s margin for selling & serving your products to consumers
76
STAGE 1
e) Route to Market
Continued
Understanding the inancial relationship with your distribution partner
When looking for your distribution partner, you must irst understand your product pricing
and proit margin requirements. A full analysis of your product pricing should relect your
requirements, as well as those of your distributor and the bar or retail store. This is done most
efectively through the use of a template known as a pricing tree.
Pricing Tree Analysis provides a clear understanding of all pricing and margin requirements. It
needs to include the following-
• Your margin requirements to make & sell a product proitably
• Distributor’s margin for investment in advertising & promotions
• Retailer and publican’s margin for selling & serving your products to consumers
76
