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Utilising third-party intermediaries as
innovative way to drive your Brand in
Emerging Markets
InnoCos Conference, Véroniq...
Why I am talking to you today
• Efficient go-to-market model is required
to succeed in new markets
• Third Party Sales Int...
The background
• In today’s economic context, generation of revenues is a priority
• Revenues to be created by geographica...
Key requirements for a successful launch
4
What do we need to understand?
5
What are the local
commercial
policies?
What are
the sales channel/
retailers?
What are
t...
Enablers of sales executional capabilities
6
Adequate
sales structure
Passionate and
skilled sales force
Negotiation power...
We need a Mr. “Right” organization
for efficient go-to-market
7
Muscle Mr. “Right”
executional skills
Brain
commercial kno...
We need to make a decision: own or rent?
8
Shall we rent the
services of Mr. Right
organization at a
third-party?
Shall we...
Different solution to outsource the selling
function
Involvement level + services
Cost $
Sub-distributor /
Non exclusive
E...
Key benefits of outsourcing Mr. “Right”
organization vs. full-fledged own organization
10
Speed
Financial
Limited HR chall...
Saving time and accelerating launch
.No need to establish legal entity
.Limited recruitment
.4 months to launch with a dis...
Various compensation models
Conventional model
12
Innovative model
Revenues based on
market share company profit
Mixed mod...
Financial benefits
.Lower cost
.No upfront spending, “pay as you go concept”
.Less financial risks
.Easier to secure money...
Third-party need to be managed properly
14
1. Market evaluation,
distributor selection
2. Appointment
.Legal,
Training
3. ...
Changes in the retail environment impacting
the profile of the distributor
15
Yesterday
• Unstable economy
• Fragmented tr...
5 key success factors to work with TPI
16
Relationship based on
partnership and trust
1.
• Understand the role
of your bra...
Misconceptions towards distributors
• They are an “intermediate step” until we reach critical mass
• They do not “own the ...
Conclusion
• Key to have a “Mr. Right” organization to ensure commercial
execution
• Often more beneficial to outsource
• ...
GRAZIE
19
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Veronique Stephan, Sales & Business Development Director, Johnson & JohnsonInno cos conference may 23-2014-veronique stephan

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UTILISING INNOVATION & DRIVING YOUR BRAND IN EMERGING MARKETS
• Full fledge organization vs.outsourcing
• The paradigm of third party sales intermediaries
• Understanding the need for transparency when you are collaborating on a project

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  • What are the dfferent channels?
    What are the the sales contribution and growth rate of the different channels/retailers
    What are the price positioning and profit contribution of the different sales channels?

    Is it a “front-margin” or “back-margin” country? What are the usual price list building blocks?
    What are the usual trade terms?
    What are the logistical?
    How are the discount policies and retailer margin on consumer activation?

    Which retailers are the brand-builders?
    Does the channel/retailer play a prescriptive role?
    Which retailers are the innovators?
    Is it worth doing an exclusive launch in a retailer?
  • A strategy not followed by execution is a waste
  • To fullfil sales requirements we need Mr. Right
  • * Exclusivity may relate to:
    Channel,
    Geographic area
    Product range
  • Focus: allow more time for brand building activities
    Flexibility: Adaptable business model with various services:
    Media buying,
    POSM production of POSM,
    Co-packing
    Regulatory
    Less rigid than affiliate of a multi-national
    HR: in some EM difficult to find capable employees. Some local distributors are big and offers great career perspective so can recruit good people as well
  • Can make sense for new launches/brands
  • Less cost as shared cost of sales director, GM, etc
    State usual margin?
    Less risks as more difficult to cut SG&A
  • Distributor can be an effective model but proper management.
    Different sales channel
    Distributor selection: thorough due diligence, see company value, go store checking, ask customer feedback
    Appointment: contract important
  • R&R: otherwise issue later with costing, amount of time required to manage the business
    Add more than turnover to the distributor: add value rather than just margin provider
    Do not see distributor as a second class solution due to lack of budget
    Transparency in the financials
    Value chain
    Comercial trade terms
    Promotional budget, strategy, execution
    Sales not sell-in but sell-out otherwise wrong assumptions and decision
    Distributor model
    is slower than an affiliate
    you might need more effort to influcene a third-party
    Your brand will not be the only brand (usually)
    Provide ready to use material
    Has some logistical requirements specific to this trade channel
    Solid contract
  • I hope that for your next launch while designing GTM you will consider TPSI as you know how beneficial they are and how you can best leverage on them
  • Transcript of "Veronique Stephan, Sales & Business Development Director, Johnson & JohnsonInno cos conference may 23-2014-veronique stephan"

    1. 1. Utilising third-party intermediaries as innovative way to drive your Brand in Emerging Markets InnoCos Conference, Véronique STEPHAN Rome, May 23rd, 2014
    2. 2. Why I am talking to you today • Efficient go-to-market model is required to succeed in new markets • Third Party Sales Intermediaries are often underestimated • Sales Intermediaries can provide innovative solution 2
    3. 3. The background • In today’s economic context, generation of revenues is a priority • Revenues to be created by geographical expansion • Emerging markets identified as a great opportunity • More risk averse culture to protect current profit • Essential to strive for cost efficient and low risk market entry 3
    4. 4. Key requirements for a successful launch 4
    5. 5. What do we need to understand? 5 What are the local commercial policies? What are the sales channel/ retailers? What are the local commercial policies? What is the strategic role of the channel/ retailer?
    6. 6. Enablers of sales executional capabilities 6 Adequate sales structure Passionate and skilled sales force Negotiation power with the trade Relationship to the trade internal external
    7. 7. We need a Mr. “Right” organization for efficient go-to-market 7 Muscle Mr. “Right” executional skills Brain commercial knowledge
    8. 8. We need to make a decision: own or rent? 8 Shall we rent the services of Mr. Right organization at a third-party? Shall we build our own Mr. Right organization? In-house Outsourcing
    9. 9. Different solution to outsource the selling function Involvement level + services Cost $ Sub-distributor / Non exclusive Exclusive distributor Exclusive distributor with marketing budget Full Market Management Access outsourced Trading Relationship providing Access Wholesaler Agent model
    10. 10. Key benefits of outsourcing Mr. “Right” organization vs. full-fledged own organization 10 Speed Financial Limited HR challenge Focus on brand-building Flexibility Quality
    11. 11. Saving time and accelerating launch .No need to establish legal entity .Limited recruitment .4 months to launch with a distributor 11
    12. 12. Various compensation models Conventional model 12 Innovative model Revenues based on market share company profit Mixed model Flat fee for services Mark-up/ Margin
    13. 13. Financial benefits .Lower cost .No upfront spending, “pay as you go concept” .Less financial risks .Easier to secure money collection 13
    14. 14. Third-party need to be managed properly 14 1. Market evaluation, distributor selection 2. Appointment .Legal, Training 3. Management .Goal setting, Motivation, On-going training 4. Termination
    15. 15. Changes in the retail environment impacting the profile of the distributor 15 Yesterday • Unstable economy • Fragmented trade • Few local KAs • Focus on distribution, not display • Technical distributor capabilities Today • Maturing free market economy • Rapidly increasing trade concentration (top 10>50%) • First international KAs • Competition among retailers • Focus on display and distribution • KAM required from distributor Tomorrow • Growing economy • High trade concentration (top 5>50%) • More international KAs • Free cross-border trade • Focus on display, not distribution • KAM skills as key success factor
    16. 16. 5 key success factors to work with TPI 16 Relationship based on partnership and trust 1. • Understand the role of your brand for the distributor 2. • Clarify roles and responsibilities 3. • Share and align on brand potential and plan 4. • Strive for transparency 5. • Educate your own organization on specificities of the go-to-market model • Clarify roles and responsibilities • Share and align on brand potential and plan • Strive for transparency • Educate your own organization on specificities of the go-to-market model • Understand the role of your brand for the distributor
    17. 17. Misconceptions towards distributors • They are an “intermediate step” until we reach critical mass • They do not “own the business, they do not feel it” • Their staff are not as competent or well trained as us • Distributor margins are too high, these costs reduce our top line 17
    18. 18. Conclusion • Key to have a “Mr. Right” organization to ensure commercial execution • Often more beneficial to outsource • Innovative and tailor-made • Specific distributor management approach 18
    19. 19. GRAZIE 19
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