Article -5 (04) Penetrating Through Distribution

In the matter of likeness of my product, perception is the only reality. It does not matter how good my product is, but only how good the consumers perceive my product to be. To manage this perception, a company looks into its consumer’s mind. Depending on what it finds, company restructure basic sales and service polices.

During our restructuring and revitalisation process, like others, we also undertook a programme on our existing Authorised Distributors. We thought that our Authorised Distributors may play a vital role in keeping the lines between manufacturers and users.

A ‘distributors’ can expedite response times, enhance a company's reach and even create value-added packages. Actually, distribution is the single most viable alternative to complement and supplement a direct sales organization. Distributors have long been relied on to serve as a bridge between manufacturers and customers. In today's increasingly globalized marketplace, this link becomes even more important. Moreover, distributors also have the benefit of reducing inventory and service burdens for both the manufacturer and the end-user.

To build relationships with the Authorised Distributors, manufacturers should start by asking themselves these five questions:

Who are our distributors?

Why are they here?

What can they do for me?

What should I do for them?

How can I get them to sell my products?

Now the question is just distribution or gradual penetration?

While re-distributing my company’s products at different market-places, I used to work towards creating distribution equity. It is a fact that if any marketing-people does not monitor more than the logistics of his distribution system – the nature, the objectives, the systems and the organisational aspects of distribution; it is not going to get success in the market place.

So, stretching the limits of the distribution activity and making it a competitive marketing edge are to be looked into by me.

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While creating distribution equity, I am to begin with the basics. Strategise to deliver the right product at the right time and the right place.

To integrate the distribution activity into my Company’s value-chain, I am to take care to the intermediaries properly and effectively. The most important intermediaries are the C&F Agent, Authorised Distributors, Wholesalers and Retailers. So, they are my first customers.

My role for our Authorised Distributors

(a)I am to give best value for their space, optimum stocks of our products and their distribution activities;

(b)I am to ensure their capital rotation rationally;

(c) I am to protect their stage-wise commission-margin and not to indulge any under-cut selling.

My role at the retailing points

(a)Opportunity to see (OTS) a product on selves and opportunity to buy (OTB) a product, where customers expect, are very crucial and only innovative scheme and relation-building can stand effectively in a competitive crowed.

(b)While at retail outlets, I am to open a scope for intimate counselling on USP of my product and best-use procedure along with other essential trade-talk to create shopkeeper’s delight for storing an extra value-added product for his customers.

(c) Through effective merchandising, I am to ensure the proposed brand attracts more value than the competitors. Moreover, I am to ensure that the levels of value so generated through the entire marketing processes are regularly maintained in the markets. Information on the stock-out details in relation to my promotional efforts is to be noted for further planning.

(d)While at retailers or wholesalers points, I am to obtain information on competitors’ products and activities which includes New Introduction, Price Change, Trade Offer, C.P. Offer, Display Programme, Special Intensive Scheme etc.

Therefore, the retail points, the final meeting ground between Product and Customer, are very important to close the sale.

My role for further value addition while handling our Authorised Distributors

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(a)While dealing with the distribution channels, I am to take into account the four cost parameters: the cost of servicing them, the cost of beat-wise retailing, the cost of coveted shelf-space and the cost of merchandising;

(b)The cost for entry for new product is going up every day. The ability of large brands in blocking relatively smaller competitive brand’s launching or even push them off from vital selves is increasingly evident. I am to take adequate care of the same;

(c) I am to consider the distribution system as the eyes and ears of the business. Market intelligence is a crucial source of competitive information and its continuous monitoring provides an update on brand health. So, I am to give attentive participation while at market-place.

(d)Through proper management of the distribution channels, I am to convert the customers’ latent demand into purchases.

My role for the management of the Authorised Distributors

1. Functional areas where I look into for :-

Managing the distributors are broadly divided into three functional areas:-

Financial agreement;

Infrastructural agreement;

Coverage agreement.

2. Reason for management of a Authorised Distributors :-

To ensure that the agreement is carried out amicably.

3. Reasons for the appointment of Authorised Distributors :-

Effective coverages;

Cost effectiveness;

Reduction in the burden of direct dealings and items of administrative work.

The popular route is shown here: Manufacturer > C&F Agent > Distributors > Wholesalers and Retailers > Consumer/Customer. Field forces or the marketing people manage the system in the field and as a field worker; I am to run the show.

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4. Needs and expectations from Distributors :-

To provide infrastructure;

To invest in company’s products;

To cover markets at desired frequency;

To make availability of products to the wholesalers and retailers;

To provide credit to the vendors;

To play a partnership role with the company for implementing policy;

Induction: about Company, Policies, Products, Reports etc.

Details of infrastructure are Godown, Office, Institution, Manpower, Units, Communication facilities and Delivery Van etc. In this context, institution means Coverage controls, DRC cards, Beat-wise business records, General stock and sales record.

5. Needs and expectations of the distributors :-

Reputed company;

Growing company, very active in retaining and attaining market share;

Protects ROI and scope to earn retainable margin;

Tradition of building long term relationship;

Friendly policy both for distributors and market;

Follow systematic work;

Maintains fair promotional offer and good practice;

Uphold systematic settlement of claims.

My role in developing distributors

a) Training :-

On selling skills;

On product;

On managing efficient fund flow(EFF);

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On merchandising;

On distribution expansion.

b) Motivation :-

Obey the terms of the Agreement & Contact norms;

Honest execution of any trade scheme and display terms;

Grow with Company; follow their advice for mutual interests.

c) Merchandising :-

Develop proper attitude for merchandising – it is the ability and activity of presenting goods in stores in such a way that the goods ‘SOLD IN’ to the retailers and which in turn ‘SOLD OUT’ more rapidly to the customer.

My role for functional responsibilities in regard to distributors

a) Ensure products are easily available to the consumers where they expects:-

Ensure proper service to retailers as well as proper service to consumers through retailers;

Know VIDS’ [very important dealers];

Determines frequency of visits;

Retain and attain market share objectives;

Continuously monitor stockist services/performances;

Ever-ready for additional effort on promotional campaign, when implemented; for conversion of people from non-users to first-time customers;

Ensure proper use of Demonstration folder, Promotional kit or P.O.P materials.

b) Achieve journey cycle sales target :-

Update/attain professional selling skills;

Plan the journey cycle for targets;

Effective use of trade schemes/offers;

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c) Motivating stockist’s employees :-

Coverage plan/journey cycle plan;

Market servicing, merchandising. Selling skills;

Maintenance of records, timely submission of data;

Minimising damages, RSU management (retail shop unit);

Handling customers’ complaints.

d) Develop proper administration ;-

Distributor-Stockist administration/ annual appraisals;

Timely returns, records maintenance;

Communication to ASO/HO;

Stationary requirements, maintenance of rules and regulations.

e) Team work building :-

Share information, ideas, review feed-back;

Contribute meaningfully during journey circle meet;

Communicate effectively and professionally;

Build need-based relationship with concerned people at stock point.

Overriding learning:-

Successful companies hold their position because they have moved consciously and with great deliberation. They control their own destiny and shy away from blaming external factors. They are focused on achieving certain goals: Learn, adopt and apply best practices and take conscious steps to ensure execution of the vision and strategies.

“Marketing is not about adding worthless gloss to worthless products or persuading dumb consumers to waste money on rubbish they neither need nor want, nor is it a “trick” for overcharging people for ordinary products. It is a way of squeezing more value out of a market-place; a way of stimulating trade and commerce; and in the right hand, an immensely powerful instrument for wide spread and cultural change” - Simon Anholt : Book : Brand new justice.

Subrata BanerjeeWritten: last part of 2004,

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Re-typed on January, 2013 banerjee_subu52@rediffmail.com

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