CHOOSE THE RIGHT DISTRIBUTION PARTNER ON THE CONTINENT
Companies looking to choose a distribution partner in countries on the African continent face a number of notable challenges – but none of them are insurmountable, the ‘IMM Journal of Strategic Marketing’ reports in its latest issue (Issue 1 2018).
Quoting from a Boston Consulting Group study entitled ‘Drawing a Route to Market for Multinationals in Africa’, the magazine says that companies need to be clear on what they expect and must determine the type of partner and type of arrangement they want to pursue. Options that suppliers should consider include the following:
- Do you opt for end-to-end distribution or last-mile delivery only? Most multinationals and other big companies require partners for at least last-mile distribution, which is very costly. Some, however, want partners to handle the full distribution ch
- ain. Product and brand development efforts or pure trading? Some partners have the capability only to push products into retail distribution; they lack the relationships or resources to support retailers or engage in brand building or promotional efforts.
- Do you use the company’s own infrastructure or rely on the distributor’s existing assets? If a company wants its own infrastructure – such as warehousing and transportation – it will require significant investment and distributor support.
- Large distribution network with existing relationships? Typically, only large companies with their own capabilities on the ground can grow and develop smaller distributors.
- Do you opt for direct employment of a sales force? The size and exclusivity of the sales force, route planning and level of sales force training are all subjects for negotiation.
“In Africa, opportunity and complexity go hand in hand. Companies need to master the latter to take advantage of the former. Taking the time to understand the continent’s individual markets, choosing the right partners and establishing an effective structure and distribution setup can make the difference between a failed experiment and a successful long-term business,” concludes the study.