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See also:
Costs of Distribution Channels
Distribution Allocation Screen
Analyzing the bike market has revealed that the three main distribution channels are: Bike Shops, Sports Stores and Department Stores. (Note - the Single-Player does not use the Sports Store channel).
Deciding Which Distribution Channels to Use
To decide which distribution channel to use, you will need to consider where your target market segments go shopping for bikes. In general, the Adventurer segment favors the specialty Bike Shops and Sports Stores while Leisure favors the familiar Department Stores. For more detail see Customer Shopping Habits.
Increasing Coverage in Selected Channels
Each store is looking for margin earned by selling your bikes. Earned margin is made up of the number of units sold, the retail price, and the % retail margin. So increasing your retail prices, number of units sold and the % retail margin you offer will eventually result in increased distribution coverage. (Offering extra support will usually make only a small difference.) You could try increasing the margin you offer your target distribution channel by up to 5%.
Finally, remember that you are also competing against the other bike manufacturer for space in each store!
Shopping Around
Because the Commuters, Kids and Leisure and Racer segments are willing to visit several different shops when wanting to buy a bike, it is not necessary to have bikes in every store. Adventurers on the other hand tend to be in a hurry to get out there, so better sales to them (all other things being equal) will be achieved by having a strong distribution presence.
Distribution Costs
An analysis of the costs of supporting retail stores in the three channels has revealed that the Bike Shops are the most expensive to support per store, but this is balanced by the fact that there are more Sports and Department Stores. Overall, though, distribution costs are usually quite small compared to other costs. See Costs of Distribution Channels for further details.
