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Route to Market & Supply Chain Blog

FMCG Route To Market: Traditional Trade Distributor Signals

Posted by Dave Jordan on Tue, Dec 16, 2014

We have invested in a new waste bin for the kitchen. Even with our strict regime of recycling as much waste as possible that small flip-up bin inside a cupboard just was not big enough. Yes, the lid dutifully popped up when the cupboard door was opened but usually this simply confirmed there was no more room in the bin.

Our new bin is a highly polished stainless steel tube of almost 1 metre in height and can get us through a few days before capacity is reached and a trip to the wheelie bin in the garden is necessary. It is up market too with a system that automatically opens the top of the bin whenever you approach with kitchen rubbish; that’s a bin with a proactive customer service ethic.

In other news. Senior Management and I prefer a pitch black bedroom. This is all well and good until I have to get up early and stumble across the floor and fumble for the bedroom door handle. If this is after a few pints of the foaming ale then I often switch the dog off and let the intruder alarm outside into the garden. On reaching the kitchen I switch on the lights....and the posh new bin 3 metres away as the crow flies and around a corner opens its gaping mouth waiting for rubbish.

FMCG_TT_DISTRIBUTOR_SIGNALSWhy does it do that? This is not meant to happen. The lights are standard bulbs so there is not even an invisible spike from a fluorescent tube starter motor floating around the room. Why is our posh new state of the art waste bin getting a signal to open up and prepare to swallow our daily trash? Even in my slowly improving fuzzy headed state I have no rubbish I need to deposit in the shining tube. The bin is reacting to a signal of some sort but it is producing an action that is not helpful or appropriate.

Where have I seen that before so many times? Let me think about that for about half a millisecond, yes your FMCG Traditional Trade (TT) Route To Market (RTM). You the producer and your exclusive TT distributor partners are trying to achieve the same objective of selling more of your brands. The relationship should not be competitive or one largely based on negative, backward looking penalisation which will do anything but raise your sales.

Let us briefly look at five signals that TT distributors send out and how they are (mis)understood within FMCG producers.

Information Signal


Typical Response

A Better Response

Sales running rate unlikely to meet monthly target.

Draft the penalty debit note.

What is the problem, what else can we do together?

Key SKUs are approaching out of stock.

Tell the distributor to improve forecast accuracy.

Oh, an opportunity. Can we get more stock to the distributor?

The promotion is not going as well as expected.

What are they doing wrong?

What are we doing wrong?

There is a new competitor product launch.

Oh, really? Too late to do anything about that now.

Let’s activate a very rapid spoiler promotion.

I have some ideas how we can grow the business.

Yeah, right!

You are closer to the market so let’s hear those ideas.

There are many, many more examples where producers either misunderstand or misinterpret the data and information emanating from TT distributor networks.

A little more care in this area will help to ensure your sales are not a complete load of rubbish.

Image courtesy of Franky242 at freedigitalphotos.net


Tags: FMCG, Route to Market, Dave Jordan, CEO, Supply Chain, Traditional Trade, Distribution

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