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Channel Matters Blog > September 2012 > High Growth Markets - The Right Spice for your Channel Sales

High Growth Markets - The Right Spice for your Channel Sales

by David Perrett
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Last year, Bill Johnson, the CEO of Heinz talked about the need to sell into emerging markets. Heinz have found growth here, 20% of their revenue comes from markets like China, India, Indonesia, Russia and Brazil compared to less than 5% a few years ago.  In his Harvard Business Review article he talks about the “Three A’s” of emerging market strategy; his observations may provide some lessons to other vendors seeking growth from new high opportunity market segments.

Bill Johnsons three A’s consist of:

  • “Applicability”, where you have to make sure the product suits the local culture. Choosing market segments must include consideration of the economic attractiveness of the segment and the customers need to buy.
  •  “Affordability”. According to Johnson, “you can’t price yourself out of the market. The product has to fit the market and Heinz tries to address this issue by offering different package sizes or recipes." What he is talking about here is the “whole-product solution". Vendors must recognize that different markets will require different whole-product solutions. If vendors can’t cost-effectively provide critical components of what customers in these markets want to buy, these will have to be contributed by someone else if the vendor wants to be competitive. And that brings us to Bill Johnsons third ‘A’
  •  “Availability”. Johnson went on to say “you have to make sure you sell through channels that are relevant to the local population. In the United States we’re used to modern grocery stores and supercenters; if a company gets shelf space in Safeway and Kroger and Wal-Mart, its products are available to virtually 100% of the population. But that’s not true in emerging markets. In Indonesia less than one-third of the people buy food in modern grocery stores—they still shop in tiny corner stores or open-air markets. In China chain grocers have a 50% share; in Russia they have around 40%; in India it’s less than 15%”. Choosing the right go-to-market channel to suit a target market segment, whether it is for ketchup or IT, is one of the most important decisions a company has to make. Get it wrong and failure is guaranteed, no matter how good the product is.

Many research studies have shown that indirect channel revenue now accounts for more than 50% of the total revenue in most industries; and is a much higher share in industries like high-tech.  An effectively operating channel model can be the “secret sauce” that takes your business to the next level, but only if you have the right spices.  Channel Enabler’s ChannelPRO™ framework is the best-practice step by step guide through the whole go-to-market planning process, from selection of suitable market segments, partner coverage mapping, whole product definition, partner selection, channel enablement, partner programs and incentives, channel processes and plans, and goal alignment. ChannelPRO™ can take your Channel Sales to the next level with a scalable and repeatable step by step process of what Channel Managers need to do, how to do it, and the tools and resources needed to execute.

For more information about how we can help your channel sales division increase your bottom line through our training and consulting services, call or email us today.

Reference

Johnson, B. (2011) The CEO of Heinz on Powering Growth in Emerging Markets. Retrieved from: hbr.org

Last modified on 6/30/2013 10:11:08 PM
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