Supply Chain Blog

A Crystal-Clear Sales Incentive program is Fundamental to Route to Market Success

Posted by Ross Marie on Thu, Dec 06, 2018

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.

sales-incentive-program-fmcg-rtm-webWelcome 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.

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

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 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.

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

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

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

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

How to Build a Competition Slaying FMCG Route to Market Strategy

Posted by Ross Marie on Thu, Oct 25, 2018

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). 

route to market strategyThe 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.

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

Essential Competitor Analysis Tips to Improve Route to Market Strategy and Execution in FMCG

Posted by Ross Marie on Thu, Oct 18, 2018

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.

competitor_analysis_enchangeBusiness 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.

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

Distributor Assessment Essentials to Deliver Sales Growth and Improve RtM Strategy

Posted by Ross Marie on Fri, Oct 12, 2018

Welcome to Step 3 of the 20 Steps to Route to Market Excellence. You can read more about the overall model and the steps I have already discussed here.

fmcg-distributotor-assessmentThe third step is ‘Distributor Assessment’. Whether you are looking to build a RtM strategy from scratch or review your existing sales and trade marketing execution, assessing the current and/or available methods of distribution is crucial. Distribution in FMCG is typically complex, with many layers, levels and combinations. There may also be local geographic nuances, and/or historical challenges to deal with. You may own and control every element of the distribution network, known as Direct Distribution. You might contract out the distribution to 3rd parties who then distribute on your behalf, also falling into the Direct Distribution category. You may sell to distributors who then distribute on to retailers themselves (or via other intermediary wholesalers or cash & carry’s), known as Indirect Distribution. You may have a mix of any of these methods which effects both the level of control, and the complexity involved.

No matter what is in place now, you must evaluate every step in the current method of distribution, from an independent point of view, and consider the possible alternative methods for getting your products to retail.

Here are just some examples of questions you can ask under Step 3 – Distributor Assessment:

  1. What is my current method of distribution?
  2. Is my distribution all ‘direct’ to my customers via my own owned or contracted distribution network?
  3. Is my distribution all ‘indirect’ to my customers through distributors that work either exclusively or non-exclusively for me? What are the layers of distributors, sub-distributors, wholesalers, cash & carry's, etc.?
  4. Is my distribution a mix of the above?
  5. Is this the way it has always been for us or did we change and if so why?
  6. Is my current point of sale coverage a function of my distribution model, or of my route to market strategy?
  7. What are the total number of distributors in my market?
  8. What is their coverage map? How many, if any, am I using? Why is this?
  9. How are my direct and indirect competitors servicing the marketplace? What is their distribution model? How do we feel is it performing for them? Is there anything we can learn from them?
  10. How regularly am I assessing the distribution network or the distributors?
  11. Do I have a distributor assessment tool to conduct the assessment? Feel free to gain inspiration from our Distributor Assessment Guide and Distributor Assessment Tool available for download.
  12. After conducting visits, and using my distributor assessment tool, what is the current performance of my distribution network and /or each one of my distributors?
  13. Where are the gaps in performance vs my ideal distribution network?
  14. What are the current levels of brand and SKU availability at the distributors retail level? What are the levels of out of stock?
  15. Is POS material available and visible at retail level? Are planograms being adhered to? What are the overall levels of display in retail?
  16. Is there an awareness of my brands at a retail level? Are trade engagement programs being run at retail level?
  17. What are the current service levels of my distributors? How does this compare to our contract and our KPIs?

Regardless of which method we choose to assess our distributors by, one fact will not change. We must get out into the field, see the distributor and retail environments first hand, and assess effectiveness of what is really happening, not what we believe is happening. Information, reports, and monitoring tools are essential in RtM execution, but nothing replaces actual field work.

I hope you find this helpful, and I appreciate your views and comments below. I will be continuing my series on the 20 Steps to Route to Market Excellence, with Step 4 Competitor Analysis in my next post.

Please subscribe to the blog, on this page, to ensure you don’t miss out on the latest updates on RtM excellence in execution. If you would like to know more about the 20 Steps to RtM Excellence, please visit our website here.

Tags: 20 Steps to RtM Excellence, RtM Strategy, Ross Marie, Retail, Logistics Service Provider, RTM Assessment Tool, Distribution, Performance Improvement, Traditional Trade, Route to Market, FMCG, SKU

Your Guide to Consumer & Market Mapping to Improve RtM Strategy for Sales Growth

Posted by Ross Marie on Thu, Oct 04, 2018

Welcome to Step 2 of the 20 Steps to Route to Market Excellence. You can read more about the overall model and the steps I have already discussed here:.

The second step is ‘Consumer & Market Mapping’.  This is where you will review how you are currently reaching all the potential places from which your consumers are buying, to maximise sales growth.

consumer-market-mapping-rtmIn the consumer goods business, buying trends, brand distribution, product availability for consumers, and reach, are things managers live and die by. The measurement of these are also critical as they can be a key factor in understanding poor performance or in delivering success. For example, you may have a first-class Route to Market model for retail right across your market, but what if your consumers are moving to digital channels? Or your internal availability/brand distribution measure may show 95%+ on your system, but what if your RtM doesn’t cover all available points of sale?

This is where Step 2 of the 20 Steps model comes in. Here are some examples of questions you can ask under Step 2 – Consumer & Market Mapping:

  1. What are the current buying trends of my consumers?
  2. How have these trends shifted in recent years and do we expect them to change soon?
  3. What are the market specific geographic challenges and realities that we need to be aware of?
  4. What are the current number of available points of sale in my market?
  5. Do we have this data available? If so, at what level of detail and how is it maintained?
  6. Do we need to conduct an ‘Every Dealer Survey’ to map all the points of sale? What are the constraints involved? Could we do this internally or do we need to look externally?
  7. What is the split between direct vs indirect points of sale?
  8. How many points of sale are we reaching?
  9. What are the gaps and why has this happened? Was this a strategic decision or natural development?
  10. To what extent are there any specific ‘cost to serve’ issues?
  11. To what extent is the picture similar for our direct competitors and can we learn from them?
  12. What about the picture for other companies who do not compete with us in our sector?
  13. What is the population spread of consumers in relation to our coverage of points of sale?
  14. What percentage (best estimate) of the target consumers are we reaching?
  15. What are the key battlegrounds and must win areas for the market?
  16. Where are our gaps in relation to this and how are we going to bridge them?
As with each of the 20 Steps, the key is getting into the detail, getting behind the data and understanding the actual reality of your company’s marketplace and not just your own historical view of it.

Getting these foundation steps right in the Assessment phase of the 20 Steps to RtM Excellence can be the difference between beating or missing those sales targets.

I hope you find this helpful, and I appreciate your views and comments below. I will be continuing my series on the 20 Steps to Route to Market Excellence, with Step 3 Distributor Assessment in my next post.

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.

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

Practical Questions FMCG Leaders Should Ask When Reviewing Route to Market Performance?

Posted by Ross Marie on Wed, Sep 26, 2018

Recently I shared my methodology for the 20 Steps to Route to Market Excellence at the beginning of this blog series.  You can read more about it here: The FMCG Leaders Guide to Route to Market Strategy & Execution in 20 Steps.  The first step, ‘Review Route to Market Performance’ sits in the ‘Assessment’ phase of this model.  This is where we will begin our journey, and I would like to start with sharing a lesson I learnt from my own career.

20 steps to route to market excellence

In March 1999 I started work as a Trade Marketing & Distribution Rep (aka Sales Rep) for P.J. Carroll & Co. Ltd., an Irish tobacco company owned by Rothmans International.  I had a territory in the south of the country.  The market at the time was Direct Store Delivery (DSD), meaning we delivered product from our warehouse to the individual stores.  Order capture was by Rep’s stock & order card or by telesales, with the main determining factors being volume and call frequency.  I had about 300 customers in my territory, we operated a 5 week cycle and my customers were divided into call frequencies of weekly, 2 weekly, 5 weekly and 10 weekly calls.  The target number of calls per day was 15.  All very logical and all very professionally managed.   

When I joined I was 21 years of age and I was very keen to please my boss and look to get promoted.  Once I figured out the geography of my territory, where each customer was located, I found out that I was finishing my 15 calls earlier and earlier each day.  In terms of numbers, I was overachieving on my sales volume, my brand distribution and on my new product introduction targets.  But by the end of month 3, I could do my required calls by lunchtime, most days, and still overachieve on my targets.  Nice if you want an easy life, or great if you want to use the extra time to impress the boss, but overall, not a very well set up RtM.  From the outside, everything looked like a well-oiled machine, but the devil was in the detail.  This is where the 20 Step model comes in.

rtm-performance-review-questionsThe first phase is Assessment, and Step 1 is Review RtM Performance.  In reviewing your current RtM performance, you need to look at all the 20 steps that are currently present within your RtM and get into the details to understand your current performance. Here are some examples of questions you can ask under Step 1 – Review RtM Performance:

  1. What does a detailed analysis of my ERP & RtM data reveal?
  2. Does available market data allow us to understand market realities & consumer buying trends, and what does this mean for our RtM?
  3. What is really going on in the marketplace & when did we last conduct systematic trade visits?
  4. What are the current levels of brand distribution and product display in retail? How do our internal reports compare to the actual reality in retail outlets when we visit? 
  5. Do we use planograms for our displays? Are they evident and being adhered to?  Do our competitors us them?
  6. What are the current levels of product understanding and brand dialogue within the trade?
  7. Are we leveraging digital effectively?
  8. How are the territories set up & how have they performed over the last number of years?
  9. What are the current call frequencies? What are the current outlet & channel classifications?  How have they been determined, and do they need to be reviewed?
  10. What is the current RtM structure and the trade tool kits? Are they fit for purpose?
  11. What is the current sales incentive program and what has it delivered?
  12. What data is available on your RtM performance? What’s being measured?  Is it enough?
  13. What are the levels of training now? Do we train on the ‘steps of the call’?
  14. How are we capturing and learning from success?
  15. How are the key accounts being managed? How are we generally engaging with the trade?
  16. What are the links to other functions across the organisation? How well are they working?

This step is detailed, it requires extensive experience and the right tools to ensure all the current performance is laid bare.  The more you do this, the more experience you have in FMCG operational execution, the more you will be able to interpret the details to reveal the true picture.  This will also uncover if there are underutilised resources allowing people to finish by lunchtime!

I hope you find this helpful, and I appreciate your views and comments below.   I will be continuing my series on the 20 Steps to Route to Market Excellence, I will be discussing step 2 in my next post.  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.

Tags: RtM Strategy, 20 Steps to RtM Excellence, Ross Marie, RTM, RTM Assessment Tool, Route to Market, Distribution