Supply Chain Blog

What are Trade Incentive Programmes (TIPs)? TIPs are the mechanisms that you put in place to incentivise and encourage your trade partners (e.g. retail, distributor, cash & carry, wholesale, Horeca) to engage with and deliver on your Trade Marketing & Distribution (TM&D) and/or Route to Market (RtM) objectives.

TIPs can include what may traditionally be associated with key account agreements, like sales volume discounts, or sales volume rebates. But they should also encompass so much more.

Whilst sales volume may be one of the most important KPIs, incentivising on it alone, or being too reliant upon it, may be counterproductive in the long term. For example, we may encourage certain customers to forward buy, thus bringing sales from next month or next period into this one, and therefore costing us more now, in terms of higher incentives, poor productivity and increased overall supply chain costs.

But focusing our TIPs on the individual trade marketing objectives (the building blocks of sales volume), can really help us to engage with and become partners of the FMCG trade, both with the owners, and in many cases more importantly, their staff.

A well thought out TIP can start to create real trade partnership with our company, encouraging and motivating those who want to work with us for mutual success, rather than customers who simply expect a discount.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 12 steps of my model. The focus of this post is Step 13 ‘Trade Incentive Programme (TIPs)’.

Here are some examples of questions you can ask under Step 13 ‘Trade Incentive Programme (TIPs)’:

1. Based on the RtM Review in Step 1, what are the current TIPs we have in place? What have their results been?
2. To what extent does our TIP accurately reflect and support our channel strategy?
3. Who are the current TIPs focused on? Who within the trade are they incentivising?
4. Are the current TIPs focused on, for example, the owners of a retail chain, on the managers or operators of the retail stores or do they focus on the staff?
5. Do we operate different TIPs based on whether the outlet is owner operated or managed by the owner’s staff?
6. Do we have a different TIP approach based on channel? If so, what is that approach and how do they differ?
7. What are the current TIPs trying to deliver? Are they based on volume, on achieving a target, on running promotions, on brand knowledge, on brand range, on product presentation, on pricing, on display, on exclusivity, on anything else?
8. What incentives do we offer in these TIPs? Have we had the same incentives in place for a long time? Have we asked the target audience if they have any views on our incentives?
9. What TIPs do our competition use? To what extent have they achieved success with them? Is there anything we can learn from their TIPs?
10. How are our TIPs measured? What does success look like? How do we measure their usage by the TM&D team, their implementation, their success? Do we use mystery shopper programmes?
11. Do we receive data from our trade partners on the implementation and results of TIPs? Is the receiving of data a condition of the current TIP?
12. Who coordinates TIPs? Is there a centralised approach? Do we have a policy and an agreed process for TIPs? Do we have a key accounts department? Do they have control or oversite of TIPs or do they keep focus to key account agreements and trading terms? Where do these cross over and how is this managed?
13. Who implements TIPs? Is it done centrally at HQ, is it done by channel, by key account, by region?
14. Can a trade marketing representative or territory manager implement and run TIPs in their own patch? If so, who coordinates that approach?
15. Are TIPs used to create and foster a culture of empowerment across our TM&D/RtM teams? Are we capturing the learning from TIP successes in one geography to allow us to roll this out to others?
16. Do we have the ability to test market our TIPs in specific geographies?
17. Who holds the budget for TIPs? How is it controlled and managed? Is it one central budget or, for example, split up by geography or by channel?
18. Can a TIP be run at a local level in a modern trade outlet where there is a central key account approach? If not, then why not? If yes, then how is this managed? What is the link to key accounts? Is there an agreed process and communication set up?
19. How does the above inform our approach to future TIPs? What is our overall approach to TIPs and their management?
20. What will our TIP training needs be and how will this be translated into our training programme?

I hope you find this useful, as always views and comments are welcome. Next, I will cover Step 14 ‘Technology’. 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.

Firstly, what are Trade Tool Kits? They are the specific commercial tools and materials that we provide to our Trade Marketing & Distribution/Route to Market (RtM) teams to help get their jobs done and to deliver on their targets. They are the trade incentive schemes, CRM systems, planograms, promotions, budgets, pricing initiatives, trade samples, etc. that they will implement, create, manage and report on.

They are shared across the Trade Marketing & Distribution Team (TM&D Team). The TM&D Team in this case can include the Trade Marketing, Distribution, Sales, Merchandising, Promotions, Horeca, Events, Key Account, Customer Service and Telemarketing Representatives.

Much of the focus of Trade Tool Kits will be around providing “stuff” that the TM&D Team can “put” in the field to increase sales. But Trade Tool Kits can be so much more. They can effectively harness the creative power of every member of the TM&D Team by empowering them to look at, and examine, what they believe might work for their customers in their geography. Trade Tool Kits can be used to foster a culture where we believe in our TM&D Team and want them to contribute. I have seen this first hand and it can be amazing. This does not take away from the ABCs of what a Sales Rep should and must do, but maybe they can do more?

In summary, Trade Tool Kits can be the difference between an average TM&D Team and a Great one.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. Over the past number of months, we have gone through the first 11 steps of my model. The focus of this post is Step 12, ‘Trade Tool Kit’.

Here are some examples of questions you can ask under Step 12, ‘Trade Tool Kit’:

1. Based on the RtM Review in Step 1, what are the current Trade Tool Kits we have in place?
2. Are the TM&D team empowered to conduct their own promotions & trade incentive programmes?
3. Does the TM&D team have a specific budget for in field promotions or events? How is the monitored and measured? Has training been given? How is success captured and replicated?
4. Can the TM&D team run local territory incentives with selected customers? Do they have guidelines or training for this?
5. Does the TM&D team launch, manage and/or implement pricing initiatives? If so, what controls are in place for this? Can they be done on a territory/area or regional basis or is this a national implementation? What materials are provided to the TM&D team for this and how are they managed and tracked?
6. Do we differentiate trade engagement with owners from trade engagement with staff or operators? Do we see any difference? Have we trained our TM&D team on trade engagement?
7. What Point of Sale (POS) material does the TM&D team have to place? Do they have guidelines on placement, duration, how to record placement, how to record effectiveness? Are we in regular contact with colleagues in Marketing to refresh and provide feedback on POS material?
8. Does the TM&D team have or use planograms? Have they been trained on these? How to they monitor or record instore display? How often are they updated?
9. What is the order capture method? Do they use an electronic method? What tools have the TM&D team been given to monitor their accounts? Are these tools well understood?
10. Does the TM&D team have a CRM solution? Is this common across all roles? Does management have real time access to the CRM tool, its data, and its ability to set and monitor tasks?
11. Does the TM&D team have laptops or tablets for use in the field? Does the TM&D team have access to customer data with the ability to conduct business and performance reviews? Have they been trained to do this? Is this a role requirement, is it encouraged, or does it fall out of scope?
12. Does more than one member of the TM&D team share responsibility for a customer or group of customers? If so, what are the rules or guidelines in place for this? How does this effect the use of trade tool kits?
13. Who in the TM&D team deals with customer complaints? How do we capture and monitor complaints? Can we report on resolution?
14. Who in the TM&D team opens new accounts? Is there a clear process and system for this?
15. How do credit limits get set for each customer? What tools are in place to monitor and inform the TM&D team?
16. Does the TM&D team get involved in invoicing or payment collection? Do we accept cash? If so, what is our process for this and how effective are controls? Do we provide tools for this?
17. Do we provide product samples to the TM&D team? Is this on a regular basis? How are they monitored or controlled? Are the TM&D team given additional samples at any time, e.g. around specific promotions or brand launches or events? If so, how are these monitored?
18. Does the TM&D team accept, manage or control product returns? If so, what is the system in place and what are the tools for doing this? What is its effectiveness?
19. Do the TM&D team place promotional assets and /or merchandising material in the field, e.g. display units, fridges, coolers, electronic displays, branded furniture or items, etc.? If so, how are they managed, tracked and recorded?
20. What is your overall approach to trade tool kit management?

I hope you find this useful, any views and comments are welcome. Next week I will cover Step 13 ‘Trade Incentive Programme (TIPs)’. 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.

When I say Sales Incentive Program (SIP) in the Fast-Moving Consumer Goods (FMCG) sector, I am referring to the internal company incentive program that is used to motivate and influence the behaviour of sales people and teams to deliver company specific results. This is not to be confused with a Trade Incentive Program, designed to motivate Retailers or Distributors or other Trade Partners.

SIPs in the FMCG sector are crucial in the delivery of Route to Market (RtM) goals. The old adage is true, what gets rewarded gets done. But is it that simple? Well, no. Putting a SIP together can be a minefield unless all the bases are covered. Let’s dig a little deeper.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model. I am writing this blog to offer guidance on the things that should be considered when putting a RtM strategy together. Over the past number of weeks, we have gone through the first 10 steps of my model. The focus of this post is Step 11, ‘Sales Incentive Programme’.

Here are some examples of questions you can ask under Step 11 - Sales Incentive Programme (SIP):

1. Based on the RtM Review in Step 1, is there a SIP in place? If yes, what is the current SIP? How is it performing? What were the key factors that led to any past successes?
2. What does the current SIP measure? How is the performance of the sales people measured and what are their targets?
3. To what extent are we targeting volume, revenue, profit, share, brand distribution, display, range, TM&D activities, point of sale material, promotions, new accounts, new brand introductions, out of stocks, cash in, etc.? What are the top 3 or 4 metrics that we currently measure? How would this be used in developing any new SIP?
4. How do we currently assign targets between the different Regions, Areas, Channels, Territories, Key Accounts, etc.? How will this be done in the future?
5. Is the current program complex and difficult to understand or administer? Or is it simple, easy to follow and understood by all?
6. How attainable are the rewards in the current SIP and how will this inform any new programme?
7. Is the current programme based on short terms incentives, e.g. monthly or quarterly, or is it based on longer term, annually or 3 yearly? How will this influence any revised programme?
8. How achievable is the current SIP? To what extent are targets achievable? Does it favour a small group within the sale force? How will this knowledge be used to develop any new programme?
9. Based on the new, revised or reviewed RtM approach, what measures will we use in future for our sales/RtM department?
10. How will we report the new SIP? What method of reporting will we use and what will the frequency be?
11. Will we operate a leader board system where every sales person knows where they rank? Will sales people have real time visibility of their and others performance?
12. What are the primary motivating factors within our organisation, country, culture, etc? Are they financial, recognition, skill acquisition, team based, career progression, etc.? Are they a mix of them all?
13. If we choose a financial route, will it be a percentage of the sale, their salary, the monthly revenue, a fixed amount? Have we considered using a physical item equal to the value of the financial reward as the incentive? Would a personal item that the sales person keeps in their home be more rewarding than cash?
14. Will any targets and rewards be individual, or team based and how does this reflect how the sales people actually work in the real world?
15. What will be the elapsed time between achievement of an incentive and the attainment of the reward? Could we lose motivated sales people through extended time lapses?
16. Have we ever asked our sales people for feedback on the current SIP? Have they ever been asked how they would change or structure a programme? Do we know what motivates them? Have we directly asked them what they want as an incentive?
17. Will managers have the ability to adjust sales targets or quotas based on specific factors? Will there be a need for a process for this? If so, what will the process look like?
18. How will any new or revised programme be ‘sold’ into the organisation? How will we achieve, and measure buy-in?
19. Has any new SIP been tested and modelled before rolling out?
20. Based on the above, what will the new SIP look like?

I hope you find this useful, any views and comments are welcome. Next week I will cover Step 12 ‘Trade Tool Kit’. 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.

For a successful Fast Moving Consumer Goods (FMCG) Route to Market Strategy, we must be able to measure our performance across the market, internally within the company and externally against the competition and wider benchmarks. For example, we must be able to measure our own sales performance, our brand/SKU distribution, our new product introductions, our volume, our revenue, our share, our displays, our in-store facings, our pricing and promotion performance, etc.

We 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.

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.

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.

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 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. Given the above, have we accurately defined the size, scope and geography of each of our territories?

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.

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.

For 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.

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.

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.

Welcome to my blog series on the 20 Steps to Route to Market Excellence model.  The purpose of this model is to assist and guide consumer goods professionals when they are putting together their strategic and operational plans to tackle their Route to Market (RtM). 

The 20 Steps are split into 4 phases, Assessment, Strategy, Design and Implementation.  Over the last number of weeks, we have gone through the first 4 steps which cover the Assessment phase on the model.  We now move to the next phase of the model, Strategy.  The focus of this post is Step 5, ‘RtM Strategy & the 4D Approach’.  Whilst it may be the only step in this phase of the model, it may well require more time than any previous step. 

This step is where we bring together all the information we have gathered and reviewed during the Assessment phase.  We have reviewed every element of our current approach looking across the 20 steps, we have mapped out the entire marketplace and the total number of points of purchase.  We now understand our consumer trends, and what the realities of our marketplace bring.  We have assessed our current and the potential distribution models and we have analysed the competition.  Now it is time to reflect on all of this and to make the big strategic decisions as to our approach to the 4D’s (Distribution, Display, Dialogue and Digital). 

It is in this step that we will define and decide upon our DIME Approach (Direct, Indirect, Mix & Everything in between).  Our DIME Approach details out our distribution model.  We may choose to distribute Direct to retailers (via our own owned distribution network or via a 3rd party), or we may use Indirect distribution through intermediaries like wholesalers, distributors or cash & carry's.  We may also have a Mix of Direct and Indirect distribution.  But our DIME Approach will be clearly defined in this step.

Below are some of the questions you should ask under Step 5 – ‘RtM Strategy & the 4D Approach’. 

1. What are the organisation’s goals? What is the Sales Function/Trade Marketing Function or Route to Market Function charged with delivering?
2. What are the specific distribution, display, dialogue and digital goals to be achieved?
3. What are the revenue, volume and share goals to be achieved?
4. Do the short term, 12 month goals and the longer 5 year goals support one another or do they suggest that a different approach to RtM is needed?
5. What is the budget available to deliver these targets?
6. What processes do we need to adapt or put in place to support our strategy?
7. What are our constraints? Do we have access to the required skilled people to fill roles?  What, if any, are the legal or regulatory constraints?  Are there other constraints particular to our market?
8. Will we have a national approach, a regional approach, a channel approach and/or a key account approach? Will we have a prioritised mix of these approaches?  If so, based on what criteria?
9. How do we measure success? What data and metrics do we require? 
10. What is our approach to order capture?
11. What will we equip the sales force with and what is our approach to training and internal incentives?
12. What is our overall approach to key account management, trade incentives and trade engagement?
13. Considering our current market position, that of the competition, what is our DIME Approach (Direct, Indirect, Mix & Everything in between) to deliver our goals?
14. Will we use direct methods of distribution and manage it ourselves or will we use distributors? Will we use a mix of direct and indirect?  What are the development needs of our distributors?
15. What are the different RtM options and combinations available?
16. Have we identified key individuals both internal (sales/trade function & cross functionally) and external to the organisation who we can bounce RtM ideas off? Have we then consulted with and sought advice from these key individuals on the available RtM options?
17. Using scenario planning, what are the best options available and how would these be ranked?
18. Based on the chosen DIME approach are there any other decisions that need to be made before we design this strategy?
19. How best can we present our strategy in a way that engages Stakeholders?

This step requires real clarity of thought and honesty.  You need to work closely with the members of your team, you need to include cross functional and interdepartmental teams, and together you can map out your own RtM Strategy and approach to deliver your goals.

I hope you find this helpful, and I appreciate your views and comments below. I will pick this up again next week, with Step 6 ‘Outlet Classification’. Please subscribe to the blog, you can do so on this page, to ensure you don’t miss out on the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps to RtM Excellence, please visit our website here.

Over the last number of weeks, I have been writing a blog series on my 20 Steps to Route to Market Excellence model. You can read more about the the steps I have already discussed here. My goal is to provoke business leaders in the Fast Moving Consumer Goods (FMCG) community to really think about every element of their RtM, and to question and analyse the decisions they will make (building) or have already made (reviewing). Is my RtM Strategy and Execution as good as it could be?

The 20 Steps are split into 4 phases, Assessment, Strategy, Design and Implementation. This blog focuses on Step 4, ‘Competitor Analysis’, which is the last step in the Assessment Phase, and is the last step to take before consideration of your approach to RtM strategy.

Business leaders today fully understand the need for competitor analysis. It is a cornerstone of any business strategy, but as with all elements of RtM strategy, it is all about the detail. Understanding what your competitors are doing, why they are doing it, how they are doing it, what their results are, and why you are different, is key to any effective sales and distribution or RtM strategy.

Below are some of the questions you should ask under Step 4 – Competitor Analysis. An important consideration is the availability of open source, legally available and reliable data and information – e.g. internal company data, field force knowledge, trade publications, industry reports, trade visits, etc.:

1. How are our direct competitors executing their RtM Strategy? What is their DIME approach to distribution (Direct, Indirect, Mix & Everything in between)?
2. What are the differences between their RtM and ours?
3. What are the differences in their performance and ours? What is their brand distribution, volume & share vs ours?
4. What are the factors that we believe are behind that?
5. How are other non-competing organisations, still in our sector, executing their RtM strategy?
6. How is that different to mine and why?
7. Are there elements from competitors’ operations that we should look to evaluate, either positive or negative?
8. Are there lessons to be learnt or mistakes to be avoided?
9. Looking across the 20 Steps, ask yourself, what is their approach to the 4D’s (Distribution, Display, Dialogue, Digital)
10. How does the competition classify their outlets, or their channels? Do they use the traditional norms, or do they target specific avenues?
11. How do they set up their territories and what is their trade structure and FTE’s?
12. Do they get sales data from the trade and what metrics do they measure? Do we know how they target their field force?
13. Do they have specific planograms and trade promotions? Are they active in POS placement?
14. Do they have a trade incentive and /or engagement programme?
15. What is their order capture method? How are they using technology in the field?
16. How are they leveraging Digital (with regards to sales channels, order capture, engagement, promotions, trade incentives, trade marketing, etc.)?
17. What do we know about competitor distributor activities? Who are they partnering with? Has this changed in the last 5 years? What is their distribution effectiveness?
18. Do we see evidence of their successful initiatives in one area being rolled out to other territories?
19. How do they manage key accounts? What is their overall relationship with the trade?

There are many questions you could ask here, and I would encourage you to think about which are the most relevant for your markets and industries. Give Competitor Analysis the importance it deserves to gain a well-rounded, in-depth knowledge of your competition and feed this into your RtM strategy.

I hope you find this helpful, and I appreciate your views and comments below. I will pick this up again next week, with Step 5 RtM Strategy & the 4D Approach. Please subscribe to the blog, you can do so on this page, to ensure you don’t miss out on the latest updates on RtM excellence in execution and the 20 Steps model. If you would like to know more about the 20 Steps to RtM Excellence, please visit our website here.