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Distribution Channel Map

Run the Distribution Channel Map MicroSim Fullscreen

About This MicroSim

Every distribution channel trades channel cost (the money, time, or both it takes to use) against channel reach (how many target customers it can realistically expose your offer to). This scatter plot puts the eight channels from Chapter 13 on one map so you can compare them directly instead of reading a list:

  • The three broad shapes: Direct Sales, Online Distribution, and In-Person Distribution.
  • The five specific types: Word of Mouth, Referral, Partnership, Marketplace, and Social Media.

Cost runs left to right and reach runs bottom to top, each on a relative 1-10 scale. The shaded green zone in the lower left holds the channels that fit an early-stage, low-capital venture: a cost of 4 or less, with narrow to moderate reach. Six channels sit inside it. Online Distribution and Marketplace sit outside, because their wider reach comes with platform fees, ads, or build costs.

The ratings are relative judgments for a typical early-stage local venture like Jordan's mobile dog-grooming service, not measurements. Selecting a channel fills the detail panel with concrete facts:

  • Cost and Reach: the rating and the reason for it.
  • What it is: the chapter's one-sentence definition.
  • Best for: the kind of venture the channel suits.
  • Wider reach for the same or less cost: any channel that beats this one on both axes of the chart.
  • Example: Jordan's or Priya's version of the channel.

The Compare with menu adds a second channel as an amber diamond, draws a dashed line between the two, and switches the panel to a side-by-side table with a verdict on the tradeoff. Direct Sales and In-Person Distribution share the same rating (3, 2), so their points are nudged slightly apart to keep both clickable. The tooltip and the panel always show the true values.

How to Use

  1. Hover over any point to see the channel's definition and its cost and reach ratings.
  2. Click a point to select it. It turns fox orange and the detail panel shows its facts. On a phone, tap a point instead; the panel shows the same definition.
  3. Click Next and Previous (or press the arrow keys) to step through the channels from cheapest to most expensive.
  4. Choose a channel from Compare with to see the two side by side. Read the Tradeoff line: how much extra reach the costlier channel buys, or whether one channel beats the other on both cost and reach.
  5. Set Compare with back to (none) to return to the single-channel view.

On narrow screens the panel sits below the chart and drops the optional lines when space runs out. Wide screens show every line.

Iframe Embed Code

You can add this MicroSim to any web page by adding this to your HTML:

<iframe src="https://dmccreary.github.io/eight-hour-entrepreneur/sims/distribution-channel-map/main.html"
        height="602px"
        width="100%"
        scrolling="no"></iframe>

Lesson Plan

Audience

Adult early-stage entrepreneurs and aspiring founders in a live virtual cohort.

Learning Objective

Participants will compare distribution channels by their channel cost and channel reach, analyze the tradeoff between the two, and judge which channels best fit an early-stage venture with limited resources.

Bloom Level: Analyze (L4). Bloom Verb: compare.

Duration

15 minutes

Prerequisites

  • Chapter 13 reading on distribution channels, channel cost, channel reach, and channel fit
  • Chapter 4's definition of the target customer
  • Jordan's mobile dog-grooming example from earlier chapters

Activities

  1. Read the map (3 min): Each participant steps through all eight channels with Next and notes which ones sit inside the best-fit zone and why the other two do not.
  2. Find the channels nothing beats (4 min): Using the "Wider reach for the same or less cost" line or the Compare with menu, find the channels that no other channel beats on both cost and reach. (Word of Mouth, Social Media, Online, and Marketplace.) As a group, discuss why Direct Sales is still a smart way to win the first customers even though four channels beat it on this chart.
  3. Compare pairs (4 min): In pairs, compare Word of Mouth with Marketplace and Referral with Social Media. Read each tradeoff verdict, then decide which channel Jordan should test first with a small budget, and what would have to be true about Jordan's customers to choose the other one.
  4. Apply it to your idea (4 min): Each participant picks two channels from the zone, names where their own target customer already pays attention, and chooses one channel to test this week.

Assessment

  • Can the participant explain why Marketplace sits outside the best-fit zone even though it has the widest reach?
  • Given any two channels, can the participant state the difference in cost and reach and say which one suits a low-capital venture?
  • Can the participant describe a case where channel fit overrules the chart, such as a customer group that never uses the cheapest channel?

References

  1. Distribution (marketing) - Wikipedia - How products and services reach customers, including direct and indirect channels.
  2. Word-of-mouth marketing - Wikipedia - Why satisfied customers telling others is both the cheapest and one of the most trusted channels.
  3. Referral marketing - Wikipedia - Turning word of mouth into a deliberate, rewarded system, the step from Word of Mouth to the Referral Channel.
  4. Online marketplace - Wikipedia - How third-party platforms trade fees and competition for built-in customer traffic.
  5. Pareto efficiency - Wikipedia - The idea behind "wider reach for the same or less cost": an option is dominated when another one is at least as good on every dimension and better on one.