Enlisting product support entails selecting and motivating partners who:
(1) Maintain adequate inventories
(2) Display the product in desirable locations (e.g. eye-level shelves, high traffic areas)
(3) Advertise and promote (special displays and signing, discounted sales prices, inclusion in flyers and ads)
(4) Sell the product (educating customers, demonstrating the product, 'closing the sale')
(5) Install and service the product.
The specific support (level and type) that a product requires hinges primarily on the product characteristics (simple or complex; high end or mass market; position along the product life cycle).
At the most basic intuitive level, the required support depends on whether a product is "bought" (well known and demanded), or needs to be "sold" (unrecognized product, brand or need).
At one extreme, products that are highly innovative (new technology or uses) and distinctive (from other products and brands) may require aggressive selling at store level to educate customers and close the sale. So, specialty stores with highly motivated, well-trained personnel salespeople may be required, especially during the product's introductory phases.
At the other extreme, for commodity-like products that are well known and understood, the distribution goal may be to establish very broad distribution coverage (i.e. a plethora of outlets, by type and in number). Since the products do not require much explaining or selling (i.e. they are bought not sold), the challenge is simply to provide convenience (availability and access), with occasional promotional emphasis. In these instances, mass merchants and discounters might be most appropriate.
Companies often find that their conceptualized ideal distribution pattern may be constrained by the willingness of retailers to carry and support the product. Securing distribution is often a formidable challenge, especially for small or unproven companies or brands.
In general, retailers make decisions on whether or not to carry a specific product based on the prospective retail profitability of the products. Among the factors commonly considered are:
(a) gaps (versus duplication) in the retailers product line assortment
(b) track record (credibility) of the supplier
(c) projected retail margins (initially and over time)
(d) anticipated promotion support (e.g. advertising, displays, "deals")
(e) compatibility of logistics infrastructures (location of facilities, information systems)
(f) the supplier's market position (clout)
Historically, manufacturers - especially big national brands - held the balance of power over most retailers and could, more or less, force them to carry products and provide support. In the past couple of decades, though, the balance of power has generally shifted to the retailers, largely due to retail consolidation (the big have gotten bigger) and the emergence of power retailers like Wal-mart and Home Depot.
Still, large prominent brands and companies (like P&G, Kellogg) that have proven track records, established customer relationships, and in-place infrastructures (e.g. regional DCs, real-time data links) have an advantage securing distribution quickly and broadly with target accounts, especially for new, high margin products. The potential financial returns for retailers are relatively high, risk is contained, and sometimes from a pragmatic perspective, the retailer has no real choice.
On the other hand, while small upstart companies may crave distribution through the power retailers, they often find that the high-volume retailers are reluctant to take on the cost burden and risk of reallocating valuable shelf space to unproven suppliers, brands, and products.
In part to defray initialization costs and mitigate risk (to the retailer), an increasing number of retailers have instituted slotting fees, payments made to the retailer whenever new products are adopted.
Many retailers set their slotting fees based on very liberal cost accounting that may overstate their incurred costs, and some even include an explicit profit mark-up that is over and above their set-up costs. The net effect of the escalating slotting fees is to raise the ante for securing distribution, sometimes to a level that erects de facto economic barriers, excluding all but the biggest, most deep-pocketed suppliers.