Outlet classification and channel definitions

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Outlet classification and channel definitions

  1. 1. Outlet Classification &Channel Definitions Distributor Wholesellers Retailers
  2. 2. Channel Groupings Ad Hoc Convenience Planned Shopping Channel Classifications Non Outlet BusinessSpecialty Food & Drinking Partners
  3. 3. Channel Groupings1. Planned Shopping 1.2 Large Groceries 1.2.1 Self Service 1.2.2 Counter Stores 1.1.1 Cash & Carry 1.1 Key Accounts 1.1.2 Hyper Market 1.1.3 Super Market
  4. 4. Planned Shopping Large Store Formats Wide Product Assortments Shopper Mission – Weekly / Monthly Stock Up Pre Planned Visits Large Store with Selling Area more than 1000 sq ft Must Have 2 or more cash counters Normally Self Service but mixed type is also there Wide Product Assortments
  5. 5. Key Accounts Self Service outlets or chain of outlets with high sales turnover, modern shopping concepts, large shopper base Wide Product Assortments Shopper Mission – Weekly / Monthly Stock Up Potential for growth & promotional activities1. Planned Shopping 1.1.1 Self Service 1.1 Large Groceries 1.1.2 Counter Stores 1.2.1 Cash & Carry 1.2 Key Accounts 1.2.2 Hyper Market 1.2.3 Super Market
  6. 6. Key Accounts Cash & Carry Hypermarkets Supermarkets
  7. 7. Sales & Trade Marketing StrategiesDedicated Human Resource (Dedicated Department incompanies, dedicated distributors or company directselling)Paid Contractual Agreements on Shelf Spaces & DisplaysPrioritized Service Levels (Service levels and reorder levelsdiscussed and locked in advance, for supermarketsprioritized services through distributions)Planned BTL activationsMajor Focus is Weighted Penetration
  8. 8. Large Groceries Stores with high Sales turnover & growth potential Combination of self service & counter stores Carry wide variety of FMCG products with selective imported items Self Service1. Planned Shopping 1.1.1 Self Service Counter Stores 1.1 Large Groceries 1.1.2 Counter Stores 1.2.1 Cash & Carry 1.2 Key Accounts 1.2.2 Hyper Market 1.2.3 Super Market
  9. 9. Sales & Trade Marketing StrategiesDedicated Human Resource (Dedicated Channel managerfrom Nestle, Dedicated Distributor Sales Force)Paid Contractual Agreements on Shelf Spaces & DisplaysPrioritized Service Levels (Twice to Thrice Weekly Serviceby the distributor)Planned BTL activationsMajor Focus is Weighted Penetration
  10. 10. Channel Groupings2. Ad Hoc Convenience 2.1 Small Stores 2.1.1 Small General Store 2.2 Petromarts 2.1.2 Small Karyana Store 2.3 Tobacco Kiosks 2.1.3 Rural Small Stores 2.2 Petromarts 2.3 Tobacco Kiosks
  11. 11. Ad Hoc Conveniance Smaller retail formats which offer convenience for shopping with limited or selective range of products Shopper mission is stock up, instant need or impulse Primarily unplanned shopping2. Ad Hoc Convenience 2.1 Small Stores 2.1.1 Small General Store 2.2 Petromarts 2.1.2 Small Karyana Store 2.3 Tobacco Kiosks 2.1.3 Rural Small Stores 2.2 Petromarts 2.3 Tobacco Kiosks
  12. 12. Small Stores Stores which cannot be walked into. Products mostly available in smaller formats. Largest number in Pakistan Serving the affordable consumer (BOP)Small General Stores Karyana Stores Rural
  13. 13. Sales & Trade Marketing StrategiesDedicated Human Resource (Dedicated Channel manager)Mostly weekly service levelsBTL activities very limited which mostly involves displayincentivesMajor focus is on Numeric Penetration as these shops arethe major chunk of trade universe
  14. 14. Petromarts & Tobacco Kiosks Petromart Pan Shop
  15. 15. Sales & Trade Marketing StrategiesExtremely important for Tobacco, beverages and otherimpulse / on the go categoriesMostly weekly service levels but for tobacco service levelsare highBTL activities very limited which mostly involves displayincentives and shelf locking
  16. 16. Channel Groupings3. Specialty Food & Drinks Bakeries Chain Fragmented Chain Pharmacies Fragmented
  17. 17. Bakeries & PharmaciesBakery Chains Pharmacy Chains
  18. 18. Sales & Trade Marketing StrategiesBakery channel is rapidly growing in urban with huge opportunityfor FMCG companiesThe service level varies from weekly to thrice weekly dependingupon the sales turnover.For Bakeries vast opportunities for BTL activities as customer trafficis high and includes higher SECs and all gender typesPharmacy is very important for pharma and nutrition relatedcompaniesMainly driven by prescription from doctorsVery low opportunities for BTL and branding as certain restrictionsby government and WHO codes
  19. 19. 4. Non Outlet Business Partner Wholesale Channel Groupings
  20. 20. WholesaleThese stores act as an intermediary in the distributionchainBuy product in large quantity and sells it into smallerquantities to small retailersThey operate as RTM where 80% of their sales are madeto retailersLimited counter sale to end shoppers
  21. 21. Wholesale Channel Playing Dominant Role in Untapped Trade Universe Distributor Wholesellers These wholesalers supplies product to rural Retailers retailers. Products supplied included branded & loose (unbranded items)Traditional Rural Distribution System
  22. 22. Sales & Trade Marketing StrategiesFocus is on increasing weighted penetration through targetedloyalty programsWholesale invests in items with high sales turnovers as the modelfocussed on absolute profit and not percentage profitMany companies are leveraging wholesale as an RTM e.g. localjuices and beverages model like Maza, Gourmet etc relies heavilyon wholesale for numeric penetrationIMTs has strong penetration in wholesale due to their competitivepricing and bundle offers
  23. 23. Managing Channels Strategically
  24. 24. Channel Prioritization – Why Do It? • Prioritise channels where we best can connect with target shoppers • Focus resources and time towards the biggest channel opportunities • Invest in channels with profit and growth potential • Maintain our business in channels where we are strong • Manage our resources in channels with no future
  25. 25. Prioritize Channel – Attractiveness & Ability to Win Channel size Attractiveness of channel Channel growthZone Suggested template – Channel profitability Premiumness (Backup)Europe ILLUSTRATIVE BACKUP Premiumness Dehydr. /pasty mix fix Premium Value (~60%) (~40%) 3.5 25 M units 3.0 Average price branded products Price per unit 2.5 Price spread branded 11.3 M products vs. PL (70%) 2.0 14 M 13 M 1.5 1.0 0.5 0.0 Knorr Nestlé PL 1 PL 2 Volume (in units) 36 Ability to win in the channel Relative Marketfor culinary products Relative market share Share Relative growth Relative profitability Relative profitability Capabilities Recipe mixes Mashed potatoes Flavour solutions Hot & cold sauces 0 1 2 3 4 Pasta Soups Others RMS 2006
  26. 26. Prioritize Channel – Attractiveness & Ability to Win (Example) Channel size Attractiveness of channel Channel growth Small StoresZone Suggested template – Channel profitability Premiumness (Backup)Europe ILLUSTRATIVE BACKUP Premiumness Dehydr. /pasty mix fix Premium Value (~60%) (~40%) 3.5 25 M units 3.0 Average price branded products Price per unit 2.5 Price spread branded 11.3 M products vs. PL (70%) 2.0 14 M 13 M 1.5 1.0 0.5 0.0 Knorr Nestlé PL 1 PL 2 Volume (in units) 36 Ability to win in the channel Relative Marketfor culinary products Relative market share Share Relative growth Relative profitability Relative profitability Capabilities Recipe mixes Mashed potatoes Flavour solutions Hot & cold sauces 0 1 2 3 4 Pasta Soups Others RMS 2006
  27. 27. Developing Channel In-Store Vision Define excellent in-store execution standards that will positively influence shopper behaviour Giving shoppers: o What they are looking for o In a way that is easy to shop o At a price that reflects value to them
  28. 28. Channel Planning Product Price Placement PromotionAssortment POP Communication
  29. 29. The Lever’s of Channel Planning (4P’s) Product Assortment Placement Promotion Price A range that meets Make the category Implement the Offer the range of the needs of most easy to shop right promotions products at a price of the shoppers through optimising that will positively that represents most of the time the availability and influence the “fair value” to the and gives choice visibility of targeted change in shopper products shopper behaviour Communication of key .... awareness, POS interaction and category (brand & Communication purchase of the segment ) messages to drive ….. category

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