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Distribution and Marketing Methods of Products In the beverage industry a new brand must be marketed to three distinct groups, (1) the distributors and their sales force, (2) the store’s manager or owner, (3) and last, but no less important, the consumers. Fernhill Beverage, Inc. has composed an approach that is specific to each group.In the incubation period of a new brand the initial launch with a distribution base is crucial. Fernhill Beverage, Inc. realizes that to insure the successful launch of a brand it must get the distributors and their sales force to push the desired product over another. This is best accomplished through incentives for the sales force. For example, a sales person might respond to a $10.00 bonus for every new retail account they open. They would also receive $1.00 per case for every case they sell in a 60-day launch period. Other sales people may respond to a contest where the sales representative that opens the most new accounts over a 60-day launch period would receive a vacation package for two. It is important to work with the distributor's general manager and/or owner to design an incentive program that best fits their needs and the needs of the brand. Some distributors are comfortable with financial incentives while others are not. Fernhill Beverage, Inc. is poised and ready to support the distributors with various sales and promotional programs for the marketing of its "flagship" brand Roadkill. Fernhill Beverage, Inc. has created sales sheets to be used as tools for the distributors to educate and present vital information about the product to the retail store manager or owner. Universally, retail establishments try to maximize profit potential per cooler location. To help retailers in their endeavor, Fernhill Beverage, Inc. will introduce the brand Roadkill with a "buy 3 cases get 1 case free" program when they purchase all flavors. The free case would be offered on a co-op basis with Fernhill Beverage, Inc. and the distributor. This will improve the store owner’s profit margin by 25%. There is limited retail shelf space available.To battle the dilemma of a lack of retail shelf space Fernhill Beverage, Inc. is prepared to offer proprietary suction cup racks where needed. Fernhill Beverage, Inc. intends to provide labels promoting the brand Roadkill on each of the suction cup racks.Fernhill Beverage, Inc. will also have static cling labels available to advertise Roadkill on the cooler glass doors. As volume grows, Fernhill Beverage, Inc. is prepared to offer proprietary coolers to select retail locations.Fernhill Beverage, Inc. will again take advantage of its relationship with distributors to utilize shelf space in coolers that the distributors currently own and operate in various retail locations. Marketing within a major grocery chain is vastly different than marketing within a convenience store or
Roadkill has a target retail price of $.99 to $ 1.19 depending on the market. Fernhill Beverage has found that the lower retail price will service as incentive to purchase the product. "mom and pop" retail location. In many instances strategic plans such as end caps, positioning of the product at eye level on the shelf and displaying the product near checkout stands can be coordinated with the grocery general manager.This relatively simple strategy can be extremely effective and accomplished without the outlay of massive capital.Fernhill Beverage, Inc. believes that the most successful strategy to market to the consumer starts with a grass roots campaign. Much like the phrase "all politics are local"Fernhill Beverage, Inc. feels "all marketing is local".Fernhill Beverage is capable of producing the product for roughly $.32 per unit in the early stages of production. That price will decrease to roughly $.26 to $.28 per unit with economies of scale. At this point, the full production cost of Roadkill is $.32 per unit or $7.68 per 24 pack case.Currently, Roadkill is sold to the distributor for $.50 per unit or $12.00 per 24 pack case. This allows the Company to retain a $.18 per unit or $4.32 profit per case not including shipping.The distributor then sells Roadkill to the retail location for $.75 per unit or $18.00 per case. This allows the distributor to retain $6.00 profit per case making it very attractive to them and allowing them to add it to their existing orders.Roadkill is shipped to the distributor in a palletized format. Each pallet contains 72 cases with a revenue amount of $864.00. A full trailer contains 20 pallets with a revenue figure of $17,280.00 .
