2. A BIT ABOUT THE DEVELOPERS
Catherine Chudinova Artem Kozhemyakin
The motivator and analyst Macro, tech, design
E-mail: ekaterinachude@gmail.com E-mail: xenus.t@gmail.com
Ivan Lashin Maria Zhalova
The analyst of creative tasks The translator and corrector
E-mail: myerto@mail.ru E-mail: zhalovamaria@rambler.ru
Special thanks to National Research University Higher Scholl of Economics.
3. STRUCTURE
1. Geographical interpretation
2. Some macro values and prime analyses
3. Problem of functional doubling and marketing
analysis
4. Concerning the structure it looks
5. Management economy and chain updates
6. Influence on market
7. Project team and it plans
4. RUSSIA - KEY IN THE EXPANSION
OF THE EASTERN MARKET
• Priority status: 5 year growth plan
• Increased capabilities in Moscow
• Step-up in marketing investment
• Reorganize to efficiency
• Maximize local marketing
5. STRUCTURE OF SALES REGIONS IN
RUSSIA AND CIS FOOD & HPС, 2009
West:
• the most sales volume
• the biggest number of retail outlets
• the place for retail and key accounts
clients management
43% • enterprises – international importers
• the ruling top
Moscow
27%
29% East:
• big length of the region
• the key region in the Uniliver‟s
Samara strategy of expansion to the
South:
• low competition on the market eastern countries
• high percent ofcompany‟s sales • remoteness from the
• consist of two parts: season market
and permanent market management centre
• low transports costs
• high percent of year growth
Novosibirsk
6. DEPENDENCY BETWEEN RUSSIAN GDP AND
FMCG MARKET VOLUME
14000,00
12000,00
10000,00
Billons of rubles
8000,00
6000,00
4000,00
2000,00
0,00
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year
FMCG market volume GDP
7. DEPENDENCY BETWEEN RUSSIAN GDP AND
FMCG MARKET VOLUME
FMCG GDP
Average 2671,758345 Average 9094,9625
Dispersion 1900105,464 Dispersion 2110155,237
Covariance 1997620,818
FMCG
GDP r=0,997*
market
volume
* Pearson's product-moment coefficient between Russian GDP and FMCG market
volume. Data: 2000-2007 in the prices of 2000.
8. RUSSIAN FMCG MARKET GROWTH FORECAST
14000,00
12000,00
10000,00
Billons of rubles
8000,00
6000,00
4000,00
2000,00
0,00
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year
FMCG market volume GDP
Average growth: 16% per year
10. IN THE ENEMY CAMP
2008 – restructuring Russian production
companies- start of east export politics
2008 - restructuring businesses in Russia,
buying minority stakes in companies - sales
growth of 4-5%
2009 – restructuring sales – local
management improvement – market
share growth 2-3%
12. UNILEVER RUSSIA
REFORMS OR REBIRTH?
Reforms Rebirth
+ Smooth vector change guarantees + The most efficient structure can be
stable work formed initially
+ No need in sharp staff reduction + Automatic clearance of inefficient
or useless units
- May not give a necessary incentive - Some delivery interruptions may
for the fast development occur in case of reorganization
- It is hard to modernize the - Need of mass discharges by
outdated system disbandment of the old units
13. UNILEVER RUSSIA
REFORMS OR REBIRTH?
Reforms Rebirth
+ Smooth vector change guarantees + The most efficient structure can be
stable work formed initially
+ No need in sharp staff reduction + Automatic clearance of inefficient
or useless units
- May not give a necessary incentive - Some delivery interruptions may
for the fast development occur in case of reorganization
- It is hard to modernize the - Need of mass discharges by
outdated system disbandment of the old units
Compromise: Rebirth through Reforms
14. REBIRTH THROUGH REFORMS
HOW IS IT POSSIBLE?
1. The new structure is formed without taking the old one
into account
Aspiration to maximal efficiency
Lack of affection for the old schemes
2. Analysis of current structure. Clearance of inefficient and
useless units
Current structure is optimized as if there is a process of
smooth reforming
Structure becomes facile and flexible
3. Determination of necessary steps for the full transition
from the old structure to the new one
15. THE CHAIN OF COMMAND
Top level
National sales Regional Sales
director (Field manager West
Food
Regional level
Manager)
Regional center Territory level
16. THE CHAIN OF COMMAND
Top level
National sales Regional Sales
director (Field manager West
Food
Regional level
Manager)
Problem of
functional
doubling and
centralization of Why is it dangerous?
marketing
decisions Regional center Territory level
17. PROBLEM OF FUNCTIONAL
DOUBLING IS:
About 10 “different functional” sales managers at the
Congestion of managerial staff
regional level ( Food and HPC)
Increasing costs on personnel wages
Lim {utility} -> 0 per each new person
Degradation of documents circulation
and data exchange Congestion with unnecessary instances
Redundancy of regional problems solved at
Inefficient use of highly productive
the territory level prevents from
human resources concentrating on real local problems
Difficulties with localization of marketing
Lack of system‟s dynamics and programs under conditions of severe
flexibility competition between different regions
Barriers to company‟s expansion on Growth of doubling in case of market‟s
the market expansion
18. About 10 “different functional” sales managers at the
Congestion of managerial staff
regional level ( Food and HPC)
Increasing costs on personnel wages
Lim {utility} -> 0 per each new person
Degradation of documents circulation
and data exchange Congestion with unnecessary instances
Redundancy of regional problems solved at
Inefficient use of highly productive
the territory level prevents from
human resources concentrating on real local problems
Difficulties with localization of marketing
Lack of system‟s dynamics and programs under conditions of severe
flexibility competition between different regions
Barriers to company‟s expansion on Growth of doubling in case of market‟s
the market expansion
19. PROBLEM OF MARKETING
CENTRALIZATION IS:
Weak power of territory and Inefficient distribution of marketing budget, poor local
regional promotion managers strategic planning, MACRO view at regional marketing
Lack of direct relations between Poor data exchange, data loss, needs of lower levels
marketing departments of different are not taken into account
levels
Inflexible marketing system and poor data exchange
Inflexible system of good‟s conflict with:
localization A) Promotion of Russia (Moscow) as a key point in east
market expansion *
B) Uniliver „s international policy of good‟s localization
Geographic distraction of key The lack of real representation in some of the managers
managers in the regions about local problems entrusted to them in the region
* International program “Uniliver Local Roots”
20. CONCERNING THE STRUCTURE IT
LOOKS : Reorganization at the Field Sales level
Territory level
From 80 000 From 78 000 to
to120 000 rub. 112 000 rub.
from 50 000 to
89 000 rub. Base units
Marketing cosulting
Volgograd Reports to: Territory Sales Manager
Department / unit: Territory Sales Manager, Territory N
From 90 000 Responsibilities and tasks: control and adaptation of sales programs and conceptions,
to 15 000 rub.
relations with local retailers, registration of the market conditions at the territory level
Interrelation: Regional Marketing Department, Channel Development and Modern
Local Trade Account
Adaptation Manager
( LAM)
Why is this replacement necessary?
1. There is a small effort at the territory level but multifunctionality is necessary
2. Flexibility of decentralization programs is guaranteed
Economy 3. Does the work of 3 units
4. Controls the situation, has advantages of “close relation with the market”
from 118 000 5. Replacement is justified by the successful experience of such international companies as
Nestle, P&G, KraftFood , etc.
to 206 000 rub.
Information about wages - http://www.headhunter.com/
21. CONCERNING THE STRUCTURE IT
LOOKS : Reorganization at the Field Sales level
Regional level
Uniliver usually works with
Regional Sales
the major retailers and retail
manager
chains, that is why
Direct relation transactions are mostly
Сustomer Marketing Directors ( Food& HRC) closed in the Moscow head
office – KEY ACCOUNTS
– Customer Marketing Executive ( Regional) – CLIENTS
Local Adaptation Managers
Information about the
major retailers
working with Unilever
look up at the
1. Flexible promotion Attachment
2. Corresponds with the
international Unilever‟s
program of local From 111 000
market‟s adaptation to130 000 rub. From 108 000
Trade connections to 127 000 rub.
specialist Economy
From 143 000
to 168 500 rub. from 76 000
Why is this replacement necessary? to 88 000 rub.
1. Peculiarities of development of Russian FMCG market
requires not only traditional European modern trade
Reports to: Regional Sales Manager
relationships but also work with traditional markets – Department / unit : Regional Sales Department, Territory N
striking example is the east region Responsibilities and tasks : manages the development of the key clients:
international, local (including chains), outlets in the all cities of current region
2. Positioning of Uniliver Russian as a junction of cluster for Interrelation : Territory Sales Managers, Regional Sales Managers, Key
company‟s expansion to the east market needs the Account Department
consolidation of sales on both directions
Information about wages - http://www.headhunter.com/
22. Before 50% 50%
Food HPC Food
&
HPC
manager manager manager
After
60 %
23. CONCERNING THE STRUCTURE IT
LOOKS :
At the top level management reorganization
Top level of Field Sales means integration of Food &
HPC departments. However, marketing
departments should be left divided.
Customer
Development
Regional Council
Vice-President
Customer
Development
Moscow
South Sales
West Sales Director East Sales Director CIS Sales Director
Director
Saint-Petersburg Novosibirsk Minsk/Kiev
Novosibirsk
Same Same Same
Regional Sales
Regional Sales
Manager
Manager (HPC)
(Food)
24. Concerning economy it looks:
Counsel of 15 TSM
6 RSM territorial +
+ managers 5 TCS
30 TSM substitute regional +
+ managers 27 MTE
5 MTAE +
+ 3 DS
59 MTE Merger of food and
hpc management +
+ 52 SCSS
departments
6 DS +
+ 63 CSS
82 SCSS New post of tcs +
+ manager, who 16 CDAE
100 CSS perform the =
+ functions of MTAE 11318333
32 CDAE and MTE
rub./month
=
20928333
rub./month
25. THE CHAIN OF COMMAND - MANAGMENT
Top level
UPDATE
Customer Development
Regional Council
Vice-President
Customer
Development
Moscow
South Sales
West Sales Director East Sales Director CIS Sales Director
Director
Saint-Petersburg Novosibirsk Minsk/Kiev
Novosibirsk
Same Same Same
Regional Sales
RegionalSales
Regional Sales
Regional level Manager (HPC)
manager
Manager
(Food)
Trade connections
specialist
Territory level Local
Adaptation
Manager ( LAM)
26. More active marketing policy
more consumers want to buy a
brand
sales growth
Faster distribution
consumer always can find the
good in the store
brand become more popular
sales growth
The effect of known changes
people can see, how company
deal with workers, notice the
company brand in the mass
media
sales growth
27. More complicated stuff
no posts, where people doing the
same work
costs degree
prime cost decrease
sales growth
Geographical position
regional centres located in same
regions
logistic costs degree
prime cost decrease
sales growth
More powerful medium management
local management make local decisions
company need less top managers
costs degree
prime cost decrease
sales growth
28. PROJECT
REALIZATION TEAM
Representatives of all the company’s departments
• Customer Development Department
• Supply Chain Department
• Strategic Brand Development Department
• Brand Building Department
Directions
• HR Department
• Finance and IT Department
leaders
• Legal Department
• PR Department
• Supply Chain Department
• Corporate Affairs Department
• Foodsolutions Department 11 specialists
Representatives of key clients 5 key clients representatives
Psychologists optional
Invitees from BRIC&CIS countries 5 potential markets experts
21 different and engaged
specialists
29. USING PRINCIPLES OF
INTERNATIONAL UNILIVER
TALENT MANAGER PROGRAM
• Local VS consultants Project team‟s working plan
11 locals managers + 5 foreign experts
2 month, team forming
•Nationality 01.01.2011-01.03.2011
01.11.12- 01.03.11-
Russia - great opportunities to 01.12.12 01.07.11
multicultural view
Moscow
•Gender differentiation
10 women – 11 men 01.04.12- West, head 01.07.11-
01.11.12 01.12.11
•Internal vs. external Novosibirsk Samara
11 internal – 10 external
South
East
Less than 3 years Kiev 01.01.12-
01.04.12
CIS
30. • Presentation of a new regional office
• Psychological work with discharged managers 01.03.11- 01.07.11
• Public Speech about company‟s prospects
Moscow
• Reorganizing promoting interactions
• Psychological work with discharged workers 01.07.11- 01.12.11
Samara • Office‟s structure rebuilding
• Restructing company „s head office to the regional management office
• Creating a new regional territory chain
• Meeting with the retail groups 01.01.12- 01.04.12
Kiev • Public speech about company‟s prospects
• Opening of a new regional head office
• Close meeting with new company „s staff 01.04.12- 01.11.12
Novosibirsk • Meeting with the retail groups and key clients
