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Route to Market & Supply Chain Blog

Romania Route To Market : You can’t blame it all on Distributors

Posted by Dave Jordan on Wed, Apr 14, 2010

You have great brands, a fantastic internal Supply Chain, tight financial control, top class HR and a top notch sales force - surely a recipe for success in Romania? Must be? Sadly, not always.


 Photo by Bogdan Suditu posted on Flickr

Blue chip companies with internal operational excellence continue to flounder when attempting to serve the Traditional Trade in Romania. Admittedly, this trade channel has reduced in importance over the past 5 years but it still accounts for a sizable portion of a market which will return to growth sooner or later. The high class, shiny international chains will continue to take share in urban areas but in a country as vast as Romania they will not conquer the rural market in the medium term. Producers need knowledgeable and reliable Route To Market partners to reach the smaller outlets.

There is no shortage of operators willing to be Distributors for big name clients but how many of them are really equipped and ready to do the job properly? Producers are guilty of placing their reputations and ultimately profits in the hands of enthusiastic amateurs. In the sporting definition amateurs do not get paid for their work and Distributors often do not get paid by producers when they fail to meet targets. However, instead of doing something about the short-comings of Distributors the Producers proudly celebrate securing penalties or better terms through negotiating against poor performance. What is the point of doing that? Instead of carping on about how poor these "partners" are why not get out there and help them?

You cannot build houses on sand yet Producers expect Distributors to swiftly dove-tail into their in-house processes, IT, style, ethics etc. Is it any wonder why so many Distributors have gone or are close to going under when they are not considered partners and in some cases are believed to be a hindrance? Distributors do not deliberately make mistakes that lead to reduced bonuses. They too are in business to make a few RON to take home at the end of the month. Producers need to look closely at the capability matrix offered by their Distributors (or potential Distributors) and in most cases this will not match up to requirements. Do something about this; build capability where it lacks and you will reap the benefits in having proactive partners going that extra kilometre to make a sale for you.

Those Producers who are in tune with their Distributors strengths and weaknesses AND do something about the latter will be in pole position with a Ferrari while less wise competitors are on row 2 with a horse and cart. The Route To Market can be a lot easier than you expect.



Oscar Supply chain Blog

Tags: Route to Market, Dave Jordan, CEE, Distribution

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