Supply Chain Blog

The Right Data and Metrics are Vital for FMCG Route to Market Success

Posted by Ross Marie on Thu, Nov 29, 2018

For a successful Fast Moving Consumer Goods (FMCG) Route to Market (RtM) Strategy, we must be able to measure our performance across the market, internally within the company and externally against the competition and wider benchmarks. We must be able to measure the full spectrum of our RtM Targets, for example, our own sales performance, brand/SKU distribution, new product introductions, volume, revenue, mix, share, displays, in-store facings, pricing, promotion performance, payment terms, merchandising equipment & Point of Sale (POS) placement, visits, etc.

essential data and metrics for rtm strategy successWe must be able to do this by territory, by area/region, nationally, by channel, by sub-channel, by key account, by distributor, by retail group, etc. We then need the ability to easily compare these measured results against our targets, our competition and any other benchmarks. We must have the functionality to do this historically, against the current performance and against future targets.

The goal here from a RtM standpoint is to get as detailed, reliable and up to the minute information as possible, to allow us to take corrective action against problems or to recognise success as early as possible to spread it far and wide.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Some of you reading this may have gone to ‘Mr Google’ for some help. What I am trying to do here is to point you in the right direction to create an amazing RtM strategy.

Over the past number of weeks, we have gone through the first 9 steps of my model. The focus of this post is Step 10, ‘Data & Metrics’.

Here are some examples of questions you can ask under Step 10 – Data & Metrics:

  1. Based on the RtM Review in Step 1, what is the data that is currently available to us?
  2. What are the performance measures that we are currently measuring against?
  3. What are our current data requirements, in absolute terms and in terms of data capture and maintenance?
  4. Based on the RtM strategy we have chosen what are the likely future data requirements?
  5. To what extent are there any specific areas we need to measure based on external factors (e.g. wider organisation requirements, legislation, regulations, brand launches, restructures, etc.)
  6. Do we currently receive data from our distributors, our retailers, our key accounts, any other customers or partners? What is the data – e.g. sales, stock, etc. If we do, what are we doing with it? If not, is this possible in the future? Have we tried to get it in the past?
  7. Is the data that we will look to measure currently available in the marketplace? Do we need to pay for it? Do we have it internally within our own systems?
  8. If we do not have the data available, will we be able to use a third party to provide it?
  9. Do we currently measure our levels of display, facings or adherence to planograms in the market? How do we do this? How effective it the measurement and our adherence?
  10. Do we have an existing Revenue Management Model? If so, what does it measure? Does our model capture the difference between pricing, mix and volume changes?
  11. Do you have volume that is moving from the traditional trade to the organised trade and eroding margins? Does our Revenue Management Model capture this?
  12. Are our Trade Discounts out-pacing our sales growth? To what extent are we capturing this?
  13. Do we have a cross functional approach to revenue management? Are sales, supply chain, marketing, trade marketing all involved in the process? Are we feeding this information into the correct departments for action?
  14. Which department controls pricing and promotions in our organisation? Is it part of the RtM function and how will it be measured, and the information captured?
  15. Is the current Revenue Management Model fit for purpose? If not, what might a new model look like?
  16. What systems are we using to measure all of this and keep track of performance? Do we have an infield CRM or hand held linked to a back-office system? Can we generate reports with ease or do we have information on spreadsheets? Do we have a system to consolidate this data and information? To what extent are we reliant on spreadsheets for this?
  17. What are the actions that need to take place to have these KPIs measured?
  18. Do we have access to external KPIs, either from the wider organisation or from our marketplace, so that we can benchmark our local activities?
  19. What are the agreed data requirements and set of KPIs that we will capture to measure the success of the RtM strategy going forward?
  20. What is our agreed Revenue Management Model?

I hope you find this useful, any views and comments are welcome. Next week I will cover Step 11 ‘Sales Incentive Program’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: SKU, FMCG, Route to Market, ERP/SAP, Traditional Trade, Sales, Distribution, RTM Assessment Tool, Information, Retail, RTM, Promotions, ERP, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Get the Sales Cutting Edge With These Essential Tips on Route to Market Structure

Posted by Ross Marie on Thu, Nov 22, 2018

When discussing Route to Market Structure, I am referring to the physical roles and people that will be needed to carry out, back up and deliver on the RtM Strategy, and goals that are proposed or have been put in place.

rtm-structure-tips-final

The types of roles that I am referring cut right through the entire sales/RtM function. From the Sales Director/VP or Head of Trade Marketing level, down through different management levels to the individual executional roles. For example, the country or end market positions in Territories (e.g. Distribution Representative), Areas/Regions (e.g. Area or Regional Sales Manager), Trade Development, Promotions, Revenue, Merchandising, Channels, Key Accounts, Horeca (Hotels, Restaurants & Cafe's/Catering), Telesales, Telemarketing, Customer Service, Modern Trade, General Trade, and so the list goes on. The point here is that my focus is the specific RtM structure and roles you will need, not the support functions (Finance, IT, HR, Supply Chain, Marketing, etc.).

When looking at RtM Structure, the starting point will always be the Strategy that we are trying to deliver on. Strategy first, then the required Structure and then the Systems necessary to support them.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. The purpose of this model and blog series is to get RtM leaders to really look at what they are doing, to ask the right questions and to look at their function in a step by step manner. 

Over the past number of weeks, we have gone through the first 8 steps of the model. The focus of this post is Step 9, ‘RtM Structure’.

Here are some examples of questions you can ask under Step 9 – RtM Structure:

  1. Based on the RtM Review in Step 1, what is the current RtM structure and how does it perform? How does this compare to the competition’s RtM structure?
  2. What is the DIME Approach (Direct, Indirect, Mix & Everything in between) in your Market?  What does that mean for RtM Structure?
  3. Based on our RtM approach, what type of roles could we need? 
  4. Will we have a field force in the areas of distribution, trade marketing, specific channels (e.g. Convenience, Grocery, Modern Trade, etc.), sales promotions, events, Horeca, etc.?
  5. Will we require any brand, product, category specific RtM personnel?  If so, will the personnel be exclusive to one brand, product, category?  Who manages them?  How does this impact on our RtM structure?
  6. How will we manage and service the marketplace, by regions, areas, channels, cities, etc? Will it be a combination of many of these?
  7. Are there any external factors that could influence our RtM Structure?  Do we have specific guidance or rules to follow from our wider organisation?
  8. Is there a global RtM structure in our organisation?   How does that effect our local RtM potential structure?
  9. How will you link into and capture RtM learnings form other countries/markets in our organisation? 
  10. How does integrating the RtM or Sales function with other company departments effect any potential RtM structure?
  11. How will the RtM structure foster two-way teamwork and support across the RtM function and the wider organisation?
  12. Do we have any resource constraints, either internally in the organisation (e.g. financial) or externally in the marketplace (e.g. talent)?
  13. If there is a skill deficiency in the local marketplace how will we address this?  Can we bring in individuals from other parts of the organisation either short terms or long term?  What is our plan then to move to a more locally resourced organisation?
  14. What is the required field force to meet out RtM goals?  What back office is necessary to support this?
  15. What is the required management structure to meet our RtM goals?
  16. What is the available field force in the indirect channels and what influence do we have on Indirect resource requirements?  How will this impact on RtM Structure? How will we measure performance?  How will we support training and development needs in this channel?
  17. To what extent have we clearly defined the responsibilities and the accountability between the different Regions, Areas, Channels, Territories, Key Accounts, etc.? Have we identified any potential areas of crossover or concern?  What is the plan to address these?
  18. Does corporate governance or industry regulation affect our RtM structure?
  19. What are our rules on span of control, how many individuals can report to one manager?
  20. What is the overall RtM structure that will facilitate the delivery on the company RtM goals?

I hope you find this useful, and I welcome any views and comments below. Next week I will cover Step 10 ‘Data & Metrics’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: FMCG, Route to Market, Traditional Trade, Sales, Distribution, RTM Assessment Tool, Retail, RTM, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

First-Class FMCG Territory Planning is Crucial in RtM Strategy for Sales Growth

Posted by Ross Marie on Thu, Nov 15, 2018

Territory Planning for Fast Moving Consumer Goods (FMCG) companies is about dividing up a piece of geography into different subsets, based on certain criteria, usually geographic proximity. It allows FMCG companies to effectively and efficiently service their customers, whilst allowing the organisation to target specific resources at each individual territory.

territory-planning-4 (002)Territory planning saves time and money by avoiding overlaps where more than one resource from the same company tries to service or sell to the same client. It also helps to ensure that all outlets within a specific geography get covered, by assigning management of a territory to one resource. It facilitates local knowledge capture, new outlet openings, closures, understanding competitor activity, capturing consumer and other trends, to name a few. Territory Planning also allows the assignment, measurement and management of Route to Market targets (volume, share, brand distribution, display, range, POS material placement, etc.).

One of the key elements of Territory Planning is simplicity. For example, pick a piece of geography, maybe a city in a state, a district in a country, or one small island out of many, and then assign one TM&D rep to manage and be responsible for that Territory and all the outlets in it. If you need to also assign additional resources like Telesales Reps, Merchandisers, Sales Promoters, Channel Managers, Key Account Managers, and Telemarketing Reps, etc., be careful who carries the overall responsibility. Any territory needs overall management.

Here are some examples of questions you can ask under Step 8 – Territory Planning:

  1. What is the DIME Approach (Direct, Indirect, Mix & Everything in between) in your Market? What does that mean for territory planning? Which outlets do we cover, and which outlets are covered by indirect channels?
  2. Do you have an influence on the territories of your indirect channel? Can you increase your influence? Are these distributors fully cooperative partners? Are they exclusive?
  3. Based on the RtM approach that we are taking, are we looking to take on new distributors or replace existing ones, and what impact will that have on our territory planning?
  4. Are there any existing sales territories in place? Have they been reviewed as part of Step 1 in the 20 Steps to RtM Excellence? If so, what are the results?
  5. Based on the review of the current territory map, what are the key areas for improvement? How would these improvement areas translate into new or revamped territories?
  6. Are there any specific issues that we need to be aware of when reviewing the territories, whether internal (regional, resources, launches, etc.) or external (competitive actions, distributors, government/political, etc)?
  7. How does the local geography impact on forming territories?
  8. Are there specific infrastructure constraints that we need to be aware of?
  9. Are there any existing external geographical factors that would potentially shape any territory formation? Is the geography split into islands, into counties, into districts, into regions, via postcodes, etc?
  10. Are we reviewing or designing territories for field force members who will call to retail outlets (sales reps, TM&D reps, merchandisers, sales promotion, etc.) and/or will there also be territories for back office support and remote activities (telemarketing, telesales, customer service, etc.) or for a combination of both?
  11. Which resource will be assigned to overall territory management? Who will be accountable? Will Key Account or Channel Managers have some or a joint responsibility for certain outlets across territories?
  12. Are we looking to cover the entire geography or are we looking to target specific cities or population concentrations, or volume levels, or other criteria, or a combination of these?
  13. Based on the results of the outlet and channel classification, what impact is there on my current territory map?
  14. How would a potential new territory map look with the required resources to service the outlets?
  15. What would the call frequencies for each outlet look like across the territories and what are the target calls per day?
  16. Are there different activities that need to be assigned to different call frequencies? If so, what are they?
  17. How are we going to win in each of the new territories?  What are the individual territory battle plans?  How do these link in with the overall regional and national approach?
  18. Given the above, have we accurately defined the size, scope and geography of each of our territories?  What will the new territory map look like?

My goal here is to get leaders in the Route to Market environment thinking about all the elements involved in RtM strategy, one of my key messages is to keep it simple, but we still need the detail.

This post is part of my blog series on the 20 Steps to Route to Market Excellence model. This post focuses on Step 8 ‘Territory Planning’. You can read about the previous steps here. I hope you find this useful, and I welcome any views and comments below.

Next week I will cover Step 9 ‘RtM Structure’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Brewing & Beverages, FMCG, Route to Market, Sales, Distribution, Information, Retail, RTM, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Take Ownership of Channel Classification for a Killer Route to Market Strategy

Posted by Ross Marie on Fri, Nov 09, 2018

Let’s start at the beginning. When we talk about Channels, we are referring to channels of distribution to get products from a manufacturer to a consumer or customer. There are many ways to achieve distribution, e.g. direct to consumers (e.g. online, mail order), through retailers, through wholesalers then retailers, through wholesalers then cash & carry’s and then retailers, through other types of intermediaries/agents, and the list goes on and on.

channel-classificationFor consumer goods, when we discuss Channel Classification, we are talking about identifying all potential and possible routes to the consumer, and dividing them up into homogeneous groupings, often based on physical format. The main benefit of doing this is so that we can effectively manage, resource and measure performance of these channels to achieve our RtM goals.

For example, an FMCG company may service the retail outlets across a country through 3 main channels, Grocery, Convenience and Horeca (Hotels, Restaurants & Cafe's/Catering). The channels may be further split into sub-channels – e.g. Grocery could be split into Discounter, Hypermarket, Supermarket, etc. This is mainly based on the format of the stores and who owns them. Channel Classification does not generally take into account outlet specific criteria such as volume, location, consumer profile, footfall, opening hours, engagement opportunity etc., for this we need to look at Outlet Classification.

Channels of distribution can vary significantly depending on sector. For the soft drinks, confectionery or tobacco industries, the “Vending Channel” could be a significant source of revenue and focus but may not even be on the radar for other sectors.

Here are some examples of questions you can ask when looking at Channel Classification:

  1. What are all the potential and possible channels of distribution that you can use to get product to your consumers or customers?
  2. How do you currently segment your universe and classify channels and sub-channels?
  3. Which channels do you currently focus on?
  4. Which channels and sub-channels do you not focus on or are you not present in? What is the reason for this?
  5. Are you measuring the performance of your current channels and sub-channels?
  6. What is the current channel performance based on volume, share, brand distribution, display, range, TM&D opportunities, etc.?
  7. Which channels have the most growth potential?
  8. How does the previously reviewed Consumer Behaviour & Trends impact on future channels?
  9. To what extent are you using or focusing on the more ‘traditional’ channels in your industry? For Example: Modern Trade, Traditional Trade, General Trade, Online, Digital, Direct Sales, Key Accounts, Wholesale, Cash & Carry, Warehouse, Grocery, Discounter, Convenience, Mom & Pop, Pharmacy, Organised, Independent, Horeca, Nightlife, Hypermarket, Supermarket, Petrol, Kiosks, Open Windows, Street Vendor, Self Service, Counter Stores, Vending, On Trade, Off Trade, etc.
  10. Are there any potential niche or alternative channels you could be targeting?
  11. Are you looking at direct to consumer options, e.g. mail order, telesales, online? Are these relevant in your field?
  12. What approach are you taking to digital and e-Channels?
  13. Will you look to target specific activities or resources at the different potential channels?
  14. How will you resource each channel in future with people and money vs how you currently operate?
  15. Will you have channel managers and how will responsibility be shared if channels cut across regional geography splits?
  16. Which channels offer the best growth potential?
  17. Which channels offer the best access to current and/or potential customers or consumers?
  18. Which channels offer the best TM&D opportunities?
  19. Based on your Competitor Analysis (Step 4 of the 20 Steps Model), how does your current and potential future set up compare?
  20. What are the agreed target channels, resource requirements and training needs?

This post is part of my blog series on the 20 Steps to Route to Market Excellence model. The model is designed to give FMCG managers a step by step guide to building or reviewing their RtM strategy to maximise growth opportunities. This post focuses on Step 7 ‘Channel Classification’. You can read about the previous steps here.

I hope you find this useful, and I welcome any views and comments below. Next week I will cover Step 8 ‘Territory Planning’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: Customer service, Brewing & Beverages, FMCG, Route to Market, Traditional Trade, Sales, Distribution, RTM Assessment Tool, Retail, RTM, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence

Retail Outlet Classification in RtM Strategy, an Essential Element or a Complete Waste of Time?

Posted by Ross Marie on Thu, Nov 01, 2018

Firstly, what is Outlet Classification? It is a process of segmenting every individual outlet, meaning every point of purchase, based on a set of company specific agreed criteria that you will design, e.g. volume, location, consumer profile, footfall, opening hours, engagement opportunity etc. This will then allow you to target specific activities, resources, brands, SKU’s, promotions, metrics, etc., at a specific outlet groupings level. The main benefit of Outlet Classification is the ability to target your product offerings at specific outlet groupings, regardless of who own them or what their retail format is.

fmcg-rtm-outlet-classification

Outlet Classification must not be confused with Channel Classification. Channel Classification, which will be covered in my next post, tends to group outlets together based on format. For example, an FMCG company may service the retail outlets across a country through 4 main channels, Grocery, Convenience, Horeca and Wholesale. These 4 channels may be further split into sub channels, Convenience could be further split into Organised, Mom & Pop, etc. This is mainly based on the format of the stores and who owns them. Outlet classification focuses on specific factors pertinent to your industry and company. It allows you to become much more targeted with your service model. A specific Outlet Classification grouping could contain retail outlets from all channel classifications, but grouped together based on specific consumer profile or location criteria set by you.

Here are some examples of questions you can ask under Step 6 – Outlet Classification:

  1. Do we know all of the outlets in our geography – including name, address, etc? If not, do we have plans to reach the total target universe?
  2. Will we call on the points of sale ourselves?
  3. Will our distributors call on them or will the outlets collect the product?
  4. What percentage of outlets will we cover either directly or indirectly?
  5. What are the criteria that we could classify our outlets under?
  6. On which criteria can we classify using existing data we or our distributors have, and what criteria requires an outlet visit?
  7. Should we classify and visit all outlets, or should we focus on a subset based on a certain criteria?
  8. Do we have the skill set, coverage and resource to do this ourselves?
  9. If not, then is the service available in my market and what are the resource requirements?
  10. Are there options to do a phased on the job classification or is a specific focus and resource required?
  11. Will we have a different approach to dealing with the outlets based on size, total volume, our volume, category volume, share, display, location, accessibility, consumer profile, footfall, opening hours, engagement opportunity, owner vs staff operated, shopper entry, time spent in outlet, potential growth, TM&D opportunities, credit risk, etc?
  12. What will those different approaches be?
  13. Do current key account agreements effect how we may classify/treat/service specific outlets?
  14. What is the timing required to finish the classification?
  15. What are the criteria for assigning call frequencies and resources (people, money, time) based on the classifications?
  16. What are the training needs arising out of outlet classification?

Arguments can be made against Outlet Classification. If you are in a market entry scenario, with limited resources, with established distribution channels, you may decide that Outlet Classification at this stage would be a drain on resources. But if you are a national player looking for country wide distribution, effective Outlet Classification as part of an overall Route to Market strategy could be the difference between winning and losing in that market.

This post is part of my blog series on the 20 Steps to Route to Market Excellence model. One of the main goals of this blog series is to demystify RtM strategy and to provide FMCG leaders with a step by step guide to follow when reviewing or building their RtM plans.

The overall 20 Steps are split into 4 phases, Assessment, Strategy, Design and Implementation. This post focuses on Step 6 ‘Outlet Classification’. This is the first step in the Design phase and would be undertaken after a full review of your current RtM (Assessment phase), and the development of your new RtM Strategy (Strategy phase). You can read about the steps under the previous phases here.

I hope you find this useful, and I welcome any views and comments below. Next week I will cover Step 7 ‘Channel Classification’. Please subscribe to the blog on this page, to ensure you don’t miss the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps click here.

Tags: SKU, Brewing & Beverages, FMCG, Route to Market, Traditional Trade, RTM Assessment Tool, Retail, RTM, Promotions, Ross Marie, RtM Strategy, 20 Steps to RtM Excellence