Trade marketing - Improving the accessibility of your products
Selling products via trade partners and distributor, BEAT planning, channel marketing, route planning, category expansion
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Off to this week post,
Dear Category Leaders,
By now, I believe that you took your promotions hat out, got your campaigns running, placed the ordered with suppliers and you nailed the pricing. You have demand forecasting numbers on your desk and you put the metrics in the place.
What could go wrong? Unfortunately many things (In my experience of working in FMCG space - You receive most of the products damaged in shipping, Product quality is not what you expected, suppliers delay, marketing ROI not good, yada yada). But one problem at a time.
While buying medicines from a pharmacy, I overheard a conversation between a customers and pharmacy owner. He asked for a specific medicine whose TV commercial he has seen but it was not available with the Pharmacy. He might have looked into at other pharmacies because he seemed perplexed and quizzed the owner “why I am seeing TV commercials while there is no product to buy?”
A justified perplexment.
This led me to today’s post about trade marketing and distribution. As a category manager, you need to ensure the accessibility of your category at distribution channels.
This is the case in a metro city - Residential area. Imagine, distribution scenario in rural India.
Imagine, you have spend so much on campaigns but customers who are engaging with your campaigns not able to buy the product, that’s double whammy. Loss of customer. Waste of marketing spend.
You don’t wanna do that :)
Let’s look at this problem from 4A’s point of view. (This is the framework that I have used for a health project in Rural India)
Trade Marketing is a discipline in business ensuring accessibility of the product at wholesaler, retailer, or distributor level. Trade marketer make sure that products are being displayed in the retailer shop / supermarket.
Consider it the thought of creating a demand for your products across the channel and before it reaches the consumer. (Wikipedia)
Trade-marketing is about managing relationship with your distributors / wholesaler / retail partners.
(Image credit : google image)
Aspects of Trade marketing
Shelf-positioning, Point of sales material, space planning
Trade discounting
Goals : Maximize distribution, win total share of store
As a category manager, you need to make sure that your trade-marketing team is aligned with your category goals. they are the contact point for retailer / distributors, hence you need to understand their challenges and how they work. You need to take updates from them about how your category is doing, how much shelf-space is given to your category by trade partners.
Now let’s talk about some of the aspects of trade-marketing. Depending on your business, a category managers might oversee sales territory plan. At least, you should be aware of overall outlook.
1). BEAT PLANNING
How would you make sure that all areas are covered in your distribution territory. Using BEAT plan.
Beat Plan (also referred as ‘Permanent Journey Plan’) is a day level route plan made for field sales/marketing personnel to make visits to a number of stores at a pre-defined frequency. A Beat Plan defines whom to visit, when to visit, based on company’s priorities on stores category/segment. These visits can be made for the purpose of sales order collection, visual merchandising, etc.
It includes defining territories and ensuring there is no overlap between field executives.
Beat Plans are planned in advance. This ensure that all stores are getting covered, and there is scheduled visits from the brand.
These visits are necessary not only to handle order collection but also for visual merchandising and most importantly from competitor analysis perspective. You would know the competitors products being displayed on Shelf and space allocation.
The goal of optimizing the sales beats is to have the right service levels at each retail outlet. Every outlet should be serviced/visited by the right person on the right day at the right time. 1
2) ROUTE PLANNING
Your territory plan is ready. Now you need to develop an effective route map for your field executive for the entire week. Consider it like a travel itinerary for sales executives.
At what time, day you (A field executive) will go to what store on what day? Location A, location B, Location C.
While creating the route map, you also need to consider unique skills of your field executives (Location familiarity, language skills, previous retail experience - existing relationship developed with retailers / distributors etc.)
3) POS material (BTL activity)
In RB working as a marketing assistant, Point of Sales used to be the frequent purchase for brand managers. These are the advertising material / brochures that gives product / brand information to the shoppers or used as a shelf itself to keep the products within. Generally they are kept at the point of sales. There are different kind of POSM available in the market : Danglers, Display signage, wood stand. You can be as creative as you want with POSM.
(Image credit : google image)
In the world of Digital, there are so many innovative concepts available. Watch this, just one of many.
4) Quantity purchase scheme (QPS) for the retail customers
Trade Marketing managers / Territory sales Managers needs to devise incentive programs for all the partners in the supply chains.
These trade-schemes or trade incentives can be designed in two ways:
a. Quantity based Schemes : For the specific number of SKUs (X) purchased, you can provide either one item free, or Y% discount to the retail partner.
b. Value Purchase Schemes (VPS) : For the X Rs. of order purchased, you can give Y% discount to your wholesaler / retailer / distributors.
These schemes will help to motivate partners to work with you rather than or despite your competition.
That’s about it. Hope it was informative for you. Do comment. Always love to hear from you.
If you are looking to read more on what we covered today:
4A’s of marketing : https://relivingmbadays.wordpress.com/2012/11/22/the-four-as/
Ansoff Matrix : https://en.wikipedia.org/wiki/Ansoff_Matrix
https://blog.locus.sh/optimizing-fmcg-sales-beats/
Write an article on consumer market research from FMCG perspective? Hiw does Nielsen work on it?