Sales and Distribution — Right Channels, Right Chains

Your products need to be where your consumers usually go to buy them. Targeting the right retailers with the right products requires good understanding of channel and chain characteristics, and retail trends. The key considerations are sales density, shopper profile and store positioning.

Sales Density

Different classes of goods (e.g. FMCG, durables, clothing, petroleum, fast food etc.) sell in different types of outlets. Even within the same class of goods, channels can vary in importance for different categories, segments or brands. In FMCG for instance, cheeses, cakes, cigarettes, colas and cleansers sell in different types of stores.

In general the sales force should target those channels and chains with high sales density for their product segments and variants. Usually this is self-evident at the category level. However sales personnel need to keep track of trends and changes in shopping behaviour so that they know what segments, variants, and pack sizes to prioritize at which stores. A brand’s market share is severely affected if the distribution of variants, pack types and pack sizes is not aligned with shoppers’ preferences.

For instance the sales of a major sanitary napkin brand were constrained because it was not available at Watsons, at that time a fast growing personal care chain in parts of Asia. Once the importance of the chain was revealed, the manufacturer was prepared to accept the relatively high listing fees that the chain commanded. In addition to sales, the brand’s consumer profile also improved — young women tended to shop more at Watsons.

In another instance, a brand of batteries experienced low market share because shoppers prefer to purchase large pack sizes in supermarkets, and this brand was not available in large pack sizes.

In yet another instance, a breakfast cereals brand experienced sluggish sales because it was not available in small packs. In the Asian market that the brand had entered, people who are not accustomed to consuming breakfast cereals preferred to try small packs before they started buying the bigger packs.

Shopper Profile and Store Positioning

Brands target consumers, and retail banners target shoppers. Both from the viewpoint of the manufacturer and the retailer, it is important that brands are more visible in banners where the shopper profile is aligned with the brands’ target consumer profile. This forms an important basis for prioritizing distribution as well as in-store activities and in-store communication.

Manufacturers need to be mindful of the retailer’s role and positioning, because the mere presence of a brand in a chain colours consumers’ perception of the brand.

Take for instance high end department stores and mainstream personal care chains. While these are the two most important channels for facial care products, they differ in almost every aspect of their retailing mix, and target contrasting shopper segments.

Even within a channel such as department stores or supermarkets, positioning may differ greatly. There are department stores that primarily sell premium designer labels, while others focus on masstige and mid-range, and still others that specialize in low price popular products.

Mindful of the way the channels and chains are positioned, manufacturers target different brands for different outlets. For instance, L'Oreal’s Plenitude and Garnier ranges of facial care products are usually not seen in the same outlets. Plenitude is distributed in upmarket department stores, whereas Garnier sells in mainstream personal care chains.

Previous     Next

Note: To find content on MarketingMind type the acronym ‘MM’ followed by your query into the search bar. For example, if you enter ‘mm consumer analytics’ into Chrome’s search bar, relevant pages from MarketingMind will appear in Google’s result pages.

What they SHOULD TEACH at Business Schools

What they SHOULD TEACH at Business Schools

Is marketing education fluffy too?

Experiential Learning via Simulators | Best Way to Train Marketers

Experiential Learning via Simulators | Best Way to Train Marketers

Marketing simulators impart much needed combat experiences, equipping practitioners with the skills to succeed in the consumer market battleground. They combine theory with practice, linking the classroom with the consumer marketplace.

Online Apps to train Category Managers

Online Apps to train Category Managers

The Plannogrammer is an experiential learning facility for category managers, trade marketers, and retailers in consumer markets. Ideally suited for hybrid learning programmes, Plannogrammer imparts hands-on training in the planning and evaluation of promotions and merchandising.

It supports a collection of simulation and analysis platforms such as Promotions and Space Planner for optimizing space and promotions, Plannogram for populating shelves and merchandising, a Due To Analysis dashboard that decomposes brand sales into the factors driving sales, and a Promotion Evaluator to evaluate the volume, value and profit impact of promotion plans.