Frequently, clients ask HAF to review, select and manage these firms to maximize their performance for our clients.
HAF Consulting has lead the development of two award winning brands; Flash (Ukraine GSM operator) and Alas (Spain GSM “bid” brand). HAF has provided fully integrated business case teams (marketing, technical and financial) to clients on successful billion plus dollar transactions and TMT start-ups.
We excel at packaging and presenting our demand and revenue projections to the investment community; including private equity groups, investment bankers, hedge funds and regulators. HAF provides various levels of due diligence on potential acquisition targets, license opportunities and distressed assets.
We are able to quickly synthesize information memorandums, annual reports, investor presentations and a wide variety of other data to identify the critical questions any discerning investor would likely have. Our approach to marketing due diligence includes conducting a full range of the usual methodologies (interviews with key executives inside and outside the target company, competitive analysis, analysis of distribution channels, pricing comparisons, etc) and capitalizing on our experience in working throughout diverse markets worldwide. HAF Consulting has extensive experience helping represent telecommunication and CATV players to the financial community regarding their business strategy and related business cases. For over a decade, HAF has prepared numerous information memorandums and investor presentations for telecommunications, media and technology players resulting in successful financing. HAF has provided fully integrated license application teams (marketing, technical and financial) to many clients (over 40 GSM license applications, tenders, etc).
Finally, we have successfully managed simultaneous license applications for one client; the point being that we are willing to tackle almost any assignment, almost anywhere.
Given that HAF only provides consultants with extensive operational experience at the Director level and above, we are frequently asked by clients to provide interim Chief Marketing Officers and Directors of Marketing.
HAF has conducted extensive analysis regarding clients’ existing product lines, compared with their competitors, and recommended strategies that better maximize revenues and customer retention for fixed telecom, wireless telecommunications, CATV and various triple play product portfolios.
We believe the marketing consultants we utilize on these product strategy and pricing design assignments are the best in the business; given their demonstrated record of success and breadth of experience. HAF Consulting provides world class strategists that combine their operational experience across many markets to help clients solve problems. The first part of this session will look again at the concept of branding discussed in Week 5 through a review of the Fairtrade brand. Fairtrade is an approach to international trade which seeks to improve the lives of farmers and producers living in poor and developing countries. In the 1960s the concept of Fairtrade had been used in international trade and in 1988 the Dutch introduced a labelling scheme. In 2008 the Fairtrade Labelling organisation released sales figures worth 4 billion US dollars (USD) an increase of 22% on the previous year.
The MORI poll conducted in April 2005 showed the highest recognition of the FAIRTRADE Mark in the UK is among the 25-34 age group. UK sales of products with the FAIRTRADE Mark reached £140m in 2004, and have been growing rapidly for the past five years by around 40% year-on-year. Without the Fairtrade infrastructure and support producers in developing countries find it hard to capture the true value of their crops. Today the Fairtrade movement has become an internationally recognised labelling organisation which endorses brands in 22 markets around the world.
The FLO unites labelling initiatives around the world including the UK Fairtrade Foundation which was established by five charities, including Oxfam and Traidcraft in 1992.
In the UK, the retailer will pay a licence fee to the UK Fairtrade Foundation for the use of the FAIRTRADE mark on certified products. Starbucks - in 2009 Starbucks committed to purchase Fairtrade certified coffee for all espresso-coffee drinks in the UK and Ireland. What are the implications for other brands who carry the Fairtrade mark, now that a Nestlé product has also been awarded the Fairtrade mark? Producing and supplying products to customers on time in the right place is key to channel management. Indeed a few years ago Sainsbury’s had big problems with getting their stores well stocked with fresh produce such as vegetables. Place is the element of the marketing mix which can be overlooked as not so exciting as promotion and product development or not profit generating as price but done well is an opportunity to develop an advantage over competitors.
We have got a little lazy about shopping around and supermarkets have virtually all we might need under one roof……why go anywhere else? Place looks at getting the product to the customer in the right quantities at the right time to the right place but there are number of different channels to use.
The route used by producers to reach their consumers will vary according to the product and the needs of the consumer.
Simply put producers or manufacturers produce a large quantity of goods yet the individual consumer might need only one! To facilitate - dealing with customer service, delivery and installation - think of Comet or Curry’s as retailers for TVs and other electrical goods. Many organisations thrive on this type of distribution and depending on the product type will only deal with their own consumers. Things get a little trickier if say for example the selected wholesaler also ‘handles’ the products supplied by competitors! Cutting out the middle man as stated above also cuts out the distributors cut of the profit margins and is an attractive strategy for many businesses.
Internationally recognised companies such as Avon Cosmetics and Dell Computers also sell direct to end consumers. The selling of music on the internet as another example has allowed bands to sell directly to their fans through downloads to I-pods and the like. Rather than use a wholesaler a producer can sell direct to an organised chain of retailers.
As discussed above wholesalers can buy in bulk from a manufacturer and will sell on to the retailers. This longer channel of distribution is sometimes used by companies wanting to move into foreign markets. In the 1980s travel agents handled all packaged holidays for the likes of Horizon Holidays and Thomson and flights for all of the big carriers; little could be booked direct by the consumer.
In many respects the distribution of business to business goods operates in much the same way as for consumer goods but instead of wholesalers, distributors are utilised instead.
A company such as JCB can sell their products direct to the industrial consumer in say the UK yet in other parts of the world might use an agent or distributor or both! For less expensive, more frequently bought business to business products, distributors are used. Outside staff will meet with existing customers and seek new customers as well as inform of new product changes. Strategies exist at several levels in any organisation - ranging from the overall business (or group of businesses) through to individuals working in it. Is concerned with the overall purpose and scope of the business to meet stakeholder expectations.
Is concerned with how each part of the business is organised to deliver the corporate and business-unit level strategic direction. This is concerned with analysing the strength of businesses' position and understanding the important external factors that may influence that position. Channel strategies can be made at corporate, business and operational levels and can and do affect business operations.
Producer factors - often a lack of producer resources can retrain the use of all channel options.
Competitive factors - if the competition has got many of the distribution options well established and it is hard to break into the market, it might be easier and more innovative to try a different approach to distribution.
Read the article below written for the Guardian in 2007, this reviews some of the 10 top UK dotcoms to watch in 2007! As well as the factors detailed above which influence channel choice internal decisions such as the choice of distribution intensity will affect the business greatly. Exclusive distribution - giving the right to distribute the company’s products to a limited number of dealers. When deciding on which channel strategy to use organisations might follow a number of steps as shown below in the diagram adapted from Solomon and Stuart (2003).
You have spent time analysing internal capabilities and production capacity and reviewed consumer and market factors the next stage is to select a distribution strategy, so intensive, selective or exclusive. Administered VMS achieve co-ordination and control through the power of one of the channel members. Companies such as Hilti sell power tools direct to the tradesman but also have established a different brand to sell to the consumer in a variety of different countries. For some business though it is not about choosing channels to distribute goods it might be the other way round and the retailers and wholesalers chose to take on products! Read the article through the link below and discover what happens when the big guys want big profits!
As An Aside - Having worked in the travel industry for a few years as a travel assistant, I was always motivated by the chance to get free flights and holidays!
Retailers who have face to face contact with the end consumer need to have good product knowledge. It is important to ensure that channel members achieve what they set out to achieve, for example are they selling enough product or do they chose to sell your competitors’ products?
In almost every business-to-business industry, companies are facing increasingly powerful intermediaries in their distribution channel. Traditional channel-management approaches rightly call for a manufacturer to identify strategies to maintain market position as value migrates down the channel. In this article, we provide a strategic primer on wholesale distributor consolidation for manufacturers.

We begin our discussion by describing consolidation and its drivers, which indicate when consolidation is impending. The authors thank Stu Mechlin for his comments on an earlier version of this article and Brian Toll for research assistance and gratefully acknowledge the financial support of the Institute for the Study of Business Markets. Tech Savvy: A Lesson in Managing Digital Disruption from FintechWhat’s happening this week at the intersection of management and technology.
Remapping the Last Mile of the Urban Supply ChainA new wave of data innovation offers unprecedented promise to crack the black box of effective urban deliveries. Leveraging Smart Data and Internet of Things to Realize Mass CustomizationIn an on-demand webinar, Wolfgang Gruel and Frank Piller detail new experiments in personal transportation.
Five conversations — often avoided — are essential to the success of any high stakes project. Airline Cathay Pacific incorporates data into all its operations to make decision making more efficient. A new corporate structure requires companies to weigh their effect on the environment and community. The United States relied on net imports (imports minus exports) for about 45% of the petroleum (crude oil and petroleum products) that we consumed in 2011. Incorporating sustainability initiatives into warehouse and distribution center (DC) design is proving to be a win-win proposition. Today’s global supply chains are increasingly complex and disruptions are a common occurrence. Comprehensive connectivity – from 802.11 wireless LAN technologies, cellular networks, Bluetooth. The results of the study clearly show that multi-channel distribution is now mainstream within our industry. Supply chain executives in the apparel retail industry have been debating strategies for managing and integrating disparate order taking and fulfillment processes and operations. Operations managers are divided on whether a multi-channel distribution platform or a single distribution channel for handling order requests, regardless of how the order is placed, is the most operationally efficient and cost-effective answer. This white paper details the results of a survey of multi-channel distribution within the apparel industry.
It perhaps is of little comfort, but clearly our industry professionals are facing a common challenge of how to manage multi-channel distribution within a complex and rapidly evolving multi-sales channel environment. To complement the results of the survey, we would like to briefly offer a perspective of multi-channel distribution. Only just a few years ago, the term multi-channel distribution was rarely used among our clientele. In reaction to this growth, information systems have developed and are now capable of handling multiple channels within the same system often using the same inventory. A common inventory can help reduce shipping costs and traditional shipping methods can be leveraged to facilitate, for-example, in-store pick-ups of merchandise ordered on-line at a very minimal marginal cost of freight. With a single facility and single information system, many physical flows can be combined into common flows regardless of channel. Similarly, with the growth of non-traditional flows, there is greater volume to justify automation of specific tasks related to that channel, for example, automated packing for e-commerce orders.
By using a single facility, a single material handling system can be designed for all distribution channels and still meet service levels.
The combined peak flow rate –which is a significant driver of material handling system investment–of multiple channels is also usually lower than the sum of the individual peaks of each channel.
A single facility also arguably lowers an aspect of risk; if there are large shifts of volumes between sales channels, most of the systems and investment associated with a single multi-channel distribution solution can still be utilized. In sharing this perspective, we recognize that there are exceptions to the trends, and have seen very valid reasons associated with these exceptions. A snapshot of these manufacturers’ and retailers’ operations shows that organizations are using a range of sortation systems at their facilities. Roughly one out of three use pop-up wheel and tilt tray sorters while at least one out of every four use cross belt, garment-on-hanger, push-off diverts and slat shoe sorters. While a few companies sit on the ‘bleeding edge’ and lead the way for adopting new technology, the majority are inclined to take a wait-and-see position and only embrace new solutions once applications have proven successful.
To better understand the issues those in the apparel distribution industry face and how they are addressing these challenges, Peerless Research Group conducted a study on behalf of SDI Industries, a leading provider of materials handling services and solutions across a range of industries, to examine current and future distribution strategies and how these organizations are developing and handling order and fulfillment processes. For this study, we interviewed 55 top-level supply chain executives at major apparel retailers and distributors. Additionally, our extensive brand experience to both start-ups (selecting bid and launch brands) and existing operators (repositioning brands) has resulted in strong relationships with brand specialization and advertising firms which provide us with unique insight into executing effective campaigns.
Based upon our extensive operational experience including hiring staff, budgeting and targeting we can help improve a client’s ability to maximize their advertising spend.
Given our 10 year plus track record in emerging markets throughout the world, we can help TMT operators ensure such challenges to not interfere with marketing plan requirements. Additionally, we are happy to provide marketing assistance to compliment the capabilities of clients. Given the strong operational experience of our marketing consultants, we provide data-driven, reasonable and attainable market projections. We feel that any set of marketing projections must support the central value creation proposition of any particular opportunity.
Given our recent and comprehensive portfolio work for a variety of hedge funds, private equity and investment banks, we believe HAF Consulting has an industry leading reservoir of benchmarks and competitive analysis regarding telecommunications and CATV players which allows us to quickly answer key investor questions. In this respect, we help clients strengthen their business plan, develop a compelling value creation proposition, package the opportunity and effectively introduce it to potential sources of financing. Our relationships with investment banks large and small provides us with valuable insight regarding how opportunities should be presented to the financial community. Our strong preference is to be involved in the formation of the business case so that the information memorandum (IM) is structured to reflect the value creation proposition. Additionally, we have assisted clients with questionnaire design to conducting focus groups and quantitative field work.
We draw from our pool of proven consultants that have demonstrated success and a minimum of 15 years experience in the TMT industry worldwide. A strategy is only good as its ability to be implemented quickly, within budget and produce measurable results. Getting the facts involves HAF Consulting rolling up our sleeves, working with an operator’s existing organization gathering data, coaching their staff when requested, interviewing key decision-makers and customers, implementing management reports that will drive behavior, securing external data from the operator’s market and finally drawing upon our extensive bench-marketing library. Consumers in developed countries are charged more than the market price for goods in order that additional money can be used to raise the living standards of the farmers, their families and their communities.
Worldwide suppliers must adhere to the standards set by the organisation to use the trade mark.
The Fairtrade Labelling Organisation was established a decade later in Germany to unite other schemes and to established worldwide standards and certification. Although this sounds a huge amount of money, it is small in comparison to world trade, yet in 2008 the organisation estimated that some 7.5 million farmers and producers were benefiting from the Fairtrade support. The UK Fairtrade Foundation is an independent non-profit making organisation and is registered as a UK charity. These fees represent 85% of income for the UK Fairtrade Foundation and more than cover the cost of monitoring the scheme. It can also save business cost which in today’s climate could be the difference between profit and not! The supermarkets are quick to highlight this point as they offer convenience and good value, but is it good value? For a producer to sell large quantities of goods to individual consumer (depending on the product) can be costly and time consuming, so the manufacturer might decide to use intermediaries such as wholesalers who then sell to retailers.
They also deal with packaging and contractual and warranty arrangements for the manufacturer. The diagram below shows the producer selling direct to the consumer setting up individual consumer transactions for a number of products. This is direct distribution and the internet has enabled a huge growth of direct distribution to the end consumer with companies such as Amazon and ASOS leading the way.
The wholesalers of course want some reward for handling the product and depending on product and market type will negotiate an agreed percentage of the final selling price. It can be a bit of a battle-ground and selection of wholesalers and subsequently retailers must be based on contract, trust and excellent relationships. This case study reviews the inward supply of raw materials needed for manufacture in addition to looking at how Kelloggs manages a global supply chain to get their ‘snap, crackle and pop’ to our breakfast tables each morning! Direct Line as stated in the business name (!) deals only directly with the consumer and clearly states this in their advertising too. One day music shops could be a thing of the past!  Long gone the days of singles and albums, are CDs to be soon a thing of the past too?
They have cut out the agent as ‘intermediary’ and now sell direct to the consumer, which is fine until perhaps something goes wrong and it is nice to have a little more added protection!
Supermarket chains hold considerable influence over manufacturers due to their buying capacity. There is a danger that larger retailers such as supermarkets buy direct from manufacturers and cut out the need for wholesalers. They might employ an agent to sell goods on their behalf to wholesalers and retailers in a different country.
Yet in a couple of decades things have changed beyond recognition and the number of consumers booking holidays on the internet is now huge.
This is a crucial level since it is heavily influenced by investors in the business and acts to guide strategic decision-making throughout the business. It concerns strategic decisions about choice of products, meeting needs of customers, gaining advantage over competitors, exploiting or creating new opportunities etc.

When a strategy has been analysed and selected, the task is then to translate it into organisational action.
These products are expensive and need a high level of personal contact between the buyer and the seller.
Increasingly direct marketing through the internet and telephone are used to reach the customer and are effective as traditional routes.
These decisions will link of course to some of the factors we have already looked at such as product features and the buying behaviour and expectations of consumers. You might have number of distribution objectives for varying product ranges in different countries. Control and power is in the hands of the channel members rather than with the manufacturer. Through reading trade magazines and other identified trade sources and knowing the market place and consumer needs before jumping in with a product. Funny how easy it is to persuade a customer to buy a holiday when you know that the travel company you are promoting are offering special discounts and holiday offers to sales staff! The likes of Nike and Adidas send out regular correspondence to their retailers as well as organise conferences and sales meetings. Yet by building fair relationships based on trust and commitment most things can be sorted! Industry consolidation is replacing a multitude of small “mom and pop” distributors with a handful of national, professionally managed, publicly traded corporations. Consolidation complicates this effort, however, by creating uncertainty about the investments required to gain position if the channel structure changes. Our goal is to help man agers understand the dynamics of consolidation and the strategic options available to them. We contend that the dynamics of consolidating distribution channels call for manufacturers to rethink their approach to the trade.
For a description of this shift as a growing competitive disadvantage for direct sales by manufacturers, see:A. The results clearly show that multi-channel distribution is now mainstream within our industry.
Our perspective has formed through witnessing the challenges our clients face and succeeding in developing cost effective solutions to meet the demands of the multi-channel environment.
Certainly many of our clients were shipping through multiple channels, but often a channel, especially e-commerce, was either handled through a 3rd party or as a purely manual process tucked in a corner of the facility. Arguably the catalyst is that volumes shipped through non-traditional channels have grown significantly; it is now a matter of urgency that this flow is handled effectively and efficiently. Having a common inventory provides great flexibility and responsiveness to sales demands from any channel, while lowering inventory carrying costs. With common flows there is now greater movement to justify higher levels of automation, which in turn can dramatically reduce labor costs; this is particularly important for the very labor intensive e-commerce distribution channel. Investment costs can be much lower as the systems are shared, and often there are no cost increases, especially if equipment capacity thresholds have not been exceeded as a result of combining channels. If distribution systems are exclusive to a single sales channel, if there is a shift in volumes between sales channels, one system could easily become under-utilized, whereas the other system would need further investment to handle the increased volumes. On average, these companies are using more than two different types of sortation and conveying systems at their facilities. With the so-called ‘majority’ delaying acceptance, are those who are early adopters gaining a competitive edge over those who hang back? Many companies in this industry are grappling with the complexities of multi-channel distribution structures yet a variety of options to successfully approach order fulfillment and distribution tasks exist. We excel at assisting clients requiring investments in the $50 Million to $1 Billion range.
Given our extensive experience with a wide variety of tender and license application formats, we are able customize boilerplate content where we can and develop new content that meets the desired positioning of the client. On of the advantages we offer clients is the ability to tie such research to directly to key business case and operational plan assumptions; thereby improving the overall quality of marketing strategies. The point is to help put in place a system that will help monitor and understand implementation of the particular plan. The main aim of Fairtrade is to help poor farmers to achieve greater economic stability and sufficiency, to enable the farmers to become valued stakeholders in the organisation and to increase their share of international trade. Companies that sell only Fairtrade goods (of goods covered by the Fairtrade standards) qualify for a 50% reduction.
There is nothing worse than popping into buy a new CD or magazine to find that stocks have gone.
Are small independent butchers, bakers and ‘fruit and veg’ shops making a comeback because shoppers are prepared to shop around more? Illustrated below the wholesaler can purchase from a supplier on a regular basis to forward products to their contacts in retail.
Some smaller companies would find it hard to operate in this way and still supply to wholesale.
The article below is very American biased yet gives an idea of how booking holidays have changed! Mostly, a commitment to work together and develop a good relationship is equally important to the manufacturer and the channel member. Seeking to eliminate channel costs, these distributors make new demands on manufacturers and multiply service requirements. Drawing on more than a decade of research, interviews, industry case studies, and our own consulting experiences, we examine four strategic options available for a manufacturer facing the prospect of consolidation. Fein, “Understanding Evolutionary Processes in Non-Manufacturing Industries: Empirical Insights from the Shakeout in Pharmaceutical Wholesaling,” Journal of Evolutionary Economics, volume 8, Fall 1998, pp. Fein, “Consolidation Prospects for MRO Distribution,” Progressive MRO Distributor, volume 3, March–April 1998, pp.
Jap, “‘Pie-Expansion’ in Buyer-Supplier Relationships: The Strategic Payoffs of Dyadic Process,” Journal of Marketing Research, forthcoming. However, the net effects of this perceived power shift on profitability in the grocery industry have been harder to detect. Fein, Developing Strategic Responses to Changing Channels (Alexandria, Virginia: Laboratory Products Association, 1998).
Clients frequently engage HAF to capitalize on the opportunities and challenges presented by churn dynamics. We structure our demand models to reflect the primary drivers of value creation that can be benchmarked verses the experience of other operators or tested by some type of quantitative research. Consequently, we are able to meet aggressive regulatory timelines with a high quality application. Best of all, they can form and lead teams; from hiring marketing employee #1 to managing the largest of marketing organizations. And, that the rigorous methodology utilized to develop a plan needs to become part of the method of operation for those investing money in planning. Is the consumer more interested in taste and how far food has travelled rather than convenience?
This is a marketing strategy selected by the organisation namely to only sell to the end consumer.
Manufacturers wish to maintain full control over the retail of their goods and set up their own retail outlets rather than relying on others.
As distributors prune their supply base, market access for manufacturers is no longer guaranteed.
Next we look at postconsolidation conditions, focusing on two critical challenges associated with the emergence of larger, more sophisticated distributors — supplier consolidation and increased service requirements.
Weitz, “Make-or-Buy Decisions: Vertical Integration and Marketing Productivity,” Sloan Management Review, volume 27, Spring 1986, pp.
Given that HAF has demonstrated operational success for both incumbents and start-ups, we are able to assist clients with effective channel management strategies that capitalize on strengths and weaknesses of the respective players in any given market. MORI figures for Fairtrade suggest that younger consumers are becoming more and more concerned about environmental issues. How should manufacturers manage relationships and investments during the transition period?
Or a manufacturer might find itself in a channel environment that is gradually moving from fragmentation to a few large players. We conclude with some strategic questions for manufacturers and use an industry example to illustrate how companies make use of the strategic options.
Coughlan, Marketing Channels, fifth edition (Englewood Cliffs, New Jersey: Prentice-Hall, 1996). So maybe in a decade or two the huge supermarkets could be a thing of the past……not if the supermarkets have their way though! How can these companies ensure that they will continue to be major players in the competitive landscape? Since much is known about channel relationships when there is a dominant intermediary, we focus our attention on the implications for manufacturers of the fragmentation-to-consolidation transition in the distribution channel. Narasimhan, “Has Power Shifted in the Grocery Channel?” Marketing Science, volume 14, Spring 1995, pp.

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