Perspective Carlos Navarro

Juan Valero
Akshat Dubey

Getting Routes to
Market Right
Designing Profitable
Go-to-Market Models in
Consumer Goods
Contact Information

Beirut Mexico City

Gabriel Chahine Carlos Navarro
Partner Partner
+961-1-985-655 +52-55-9178-4209
[email protected] [email protected]

Cleveland Juan Valero

Les Moeller Principal
Partner +52-55-9178-4218
+1-216-696-1767 [email protected]
[email protected]

Akshat Dubey Milan

Senior Associate Emanuele Savona
+1-216-925-4038 Principal
[email protected] +390-2-72-50-91
[email protected]
London
John Potter Rome
Partner Riccardo Lotti
+44-20-7393-3736 Partner
[email protected] +39-06-69207325
[email protected]
Richard Rawlinson
Partner San Francisco
+44-20-7393-3415 Tim Blansett
[email protected] Partner
+1-415-263-3707
Edouard Samakh [email protected]
Principal
+44-20-7393-3357
[email protected]

Laura Harnett
Senior Associate
+44-20-7393-3351
[email protected]

Booz & Company

EXECUTIVE The routes to market that consumer packaged goods (CPG)
companies use to sell and service their trade accounts
SUMMARY
determine their sales volume, their ability to deliver the
proper levels of customer service in a cost-effective manner,
and their success at securing scarce retail shelf space for
their products. Nevertheless, few CPG companies have a
comprehensive conceptual platform for optimizing their
routes to market.

Such a platform must enable compa- This Perspective describes a proven

nies to design go-to-market (GTM) platform for creating such models.
models that are characterized by four It enables managers to identify and
qualities: They have a strong cus- analyze the key activities and tasks
tomer focus. They are aligned with required to best serve their customer
the company’s strategic goals and segments. It also provides a means for
value offerings, and supported by its choosing among and testing a variety
operational capabilities. They balance of design alternatives in the quest for
customer needs, revenue growth, the most effective and efficient routes
and cost-to-serve. And finally, they to market.
are flexible enough to be adapted in
response to changing strategic goals
and competitive threats.

Booz & Company 1

GETTING In an intensely competitive consumer
goods sector, optimized go-to-market
by nontraditional players, such as
providers of mobile phone service
ROUTES TO (GTM) models—the designs for the and financial services. Yet the com-
MARKET RIGHT routes to market that companies use
to sell and deliver their products and
pany was still selling and servicing
most of its customer base using a
to service their trade accounts—are pre-sales & direct store distribu-
essential. They enable profitable tion (DSD) model, in which sales
growth, service excellence, and and delivery personnel visited each
consumer engagement at the point account at least once per week.
of sale. But the more diverse a
company’s customer base and The company had mastered this
product portfolio, and the more model very efficiently, but there were
competitive its markets, the more two inherent problems in applying
challenging it is to design effective the same model across a diverse
and efficient GTM models. customer base. First, to maintain
a reasonable cost-to-serve across a
A leading consumer goods company large customer base, the field sales
faced this challenge in a major Latin and service staff could not devote
American market. Over decades of too much time to any single customer
successful growth, the company’s and therefore found it difficult
trade customer base had expanded to sell and service the company’s
to hundreds of thousands of outlets growing product portfolio.
ranging from big-box retailers to Second, the model was needlessly
street vendors. In the past decade expensive and time-consuming for
alone, the company’s brand portfo- certain customer segments, such
lio expanded four times, while its as smaller independent retailers
number of SKUs more than tripled. and other lower-volume vendors
Furthermore, competition for retail with straightforward needs. It was
shelf space continually intensified, also often unwelcome because it
driven not only by a growing set of distracted already time-pressed
direct competitors and other con- store owners from running their
sumer products companies, but also businesses.

2 Booz & Company

In other words, because virtually SKUs. They also can reduce their conceptual platform offers CPG
all of the company’s trade accounts overall cost-to-serve. In short, they companies several key benefits:
were being managed via the same can cut costs and grow stronger.
route to market, no matter what their • It provides a process for analyzing
actual sales and service needs, some While analyzing and designing GTM and constructing routes to market
accounts were underdeveloped and models can be very rewarding, it that properly balances effective
underserved, while others received is a quite complex task. Multiple execution with cost-to-serve.
more attention than they needed stakeholders are involved, and
or wanted. As a result, the sales the experiences of thousands of • It ensures a comprehensive and
potential of existing accounts was customers can be affected; a wide aligned understanding of the
not being fully captured, cost-to- range of variables—including the elements contained in GTM
serve was higher than necessary, strategic goals of the company and models.
and resources that could have been its operational capabilities—must
deployed to establish, maintain, be taken into consideration; • It facilitates the sharing of best
and develop new accounts were not and the investment in time and practices related to sales, customer
available. resources can be substantial. What service, and GTM model designs
is needed, therefore, is a consistent across the system.
Many companies in the CPG sector and comprehensive platform for
are in a similar position. Geographic rethinking GTM models across • It encompasses the tools and
expansion, growth in customer base the customer base in order to methodologies to model the
and product lines, and the dictates more efficiently deploy resources effects of different GTM design
of competition and cost reduction and provide better coverage of alternatives on the revenue
have created an urgent need for increasingly complex product potential, cost-to-serve, and
them to reevaluate and redesign portfolios. Such a platform must be customer satisfaction.
their GTM models. Companies that capable of producing a clear vision
are successful in this endeavor can of desired route-to-market outcomes, • It is a vehicle for the continuous
rightsize their sales and service forces a comprehensive understanding improvement and systematic
and better allocate their talent. They of the roles and functions of the updating of GTM models and
can bolster product presence and employees staffing the routes, and a processes.
customer experience at the point of systematic approach to GTM model
sale, and they can devote greater analysis, design, implementation,
effort to strategic and high-profit and management. A well-structured

Booz & Company 3

THE FOUR tation, existing sales and delivery
processes, and cost-to-serve, that the
aligned and integrated with the
company’s overall customer service
PILLARS OF needs and desires of trade customers framework. It is often helpful to visu-
A POWERFUL and consumers receive short shrift.
The most effective and efficient GTM
alize this framework as a pyramid in
which decision and design param-
GTM PLATFORM models are designed from the market eters flow down from the top, and
back, ensuring that they are properly support flows up from the bottom
aligned with customer and consumer (see Exhibit 1). From the peak of the
needs. Toward this end, the structure pyramid, strategic goals flow down-
of a GTM model should have a foun- ward, giving shape to customer value
To gain those benefits, an effective dation of quantitative and qualitative offerings. Value offerings, in turn,
GTM platform must be built on four characteristics of customer seg- cascade downward, suggesting spe-
pillars. The pillars represent the ments, including growth potential, cific GTM models, which can then
qualities of effective, efficient routes the stated and unstated needs of be designed to support delivery of a
to market, as well as the design customers in a segment, geographic specific value proposition for each
principles by which GTM models are footprint and location, sales volume, customer segment. And finally, GTM
constructed. We describe them as and profitability. This process has models help define the company’s
market-driven, coherent, balanced, a secondary benefit: It forces GTM operating models, dictating elements
and flexible. model designers to properly identify required to enable and support the
and define their companies’ customer GTM models. The resulting coher-
Market-driven: Too many companies segments. ence within the customer service
design GTM models in an inside-out framework ensures that GTM models
manner. That is, their design efforts Coherent: In addition to external support the achievement of corporate
are so focused on internal consid- alignment with customers, effec- goals, as well as receive the support
erations, such as ease of implemen- tive GTM models must be properly they need to operate successfully.

4 Booz & Company

Balanced: An effective platform must In analyzing their GTM alternatives, GTM routes in functional terms, a
enable identification and balancing managers must be able to balance the full palette of design alternatives for
of competing priorities in the design consequences of design alternatives constructing them, and a method for
and operation of GTM models. There and decisions on all three priori- determining which alternatives are
are three sets of priorities that must ties, determine the proper trade-offs best suited to individual customers
be considered: customer needs and among the priorities, and build an and customer segments. Managers
preferences, which determine satis- optimal GTM model accordingly. need flexibility in terms of GTM
faction and affect growth potential; model design, and once a design is
revenue growth, which determines Flexible: Finally, because CPG chosen and implemented, they also
market share and volume; and total companies must manage an increas- need a means of improving it or
cost-to-serve, which determines ingly diverse customer base with adapting existing models as condi-
the economic feasibility and profit- differentiated GTM models, a tions change.
ability of serving both individual high-quality design platform must
customers and customer segments. include a method for understanding

Exhibit 1
A Comprehensive Customer Service Framework

Market
Strategic Goals
Share/
Product Mix

Marketing Terms &

Value Offerings Support Conditions

Growth Sustaining Value-adding

Go-to-Market Models
Activities Activities Activities

Operating Models Infrastructure/

Processes Organization IT systems
Assets

Source: Booz & Company

. 7 values
Booz & Company 5

100% 75% 50% 25% lines dots criss-

A FUNCTIONAL In order to build market-driven,
coherent, balanced, and flexible
The design and operation of an
effective GTM model depends on
PERSPECTIVE ON routes to market, most CPG a more holistic analytic view (see
GO-TO-MARKET companies need to adopt a new
perspective on GTM model design
Exhibit 2). This view should be based
on the model’s main activities and the
MODELS and management. Too often, model functional steps—or tasks—required
managers approach their work in to execute those activities. Using such
a piecemeal fashion and without a an approach to analyze GTM routes
holistic view of the routes to market ensures that managers will consider
they are building. They define design all of the activities that are necessary
parameters, specify model choices, in the execution of the sales and
and manage GTM models from a service value chain for each of its
limited analytical perspective, such customer segments, and provides a
as sales or delivery. Invariably, the sound foundation for constructing
result is a less-than-optimal route to profitable routes to market.
market.

Exhibit 2
A Holistic View of Routes to Market

Growing Adding Value

Customer
Merchandising
Acquisition
Route to Market
Customer Quality
Development Assurance

Sustaining

Order Entry Distribution Collections

Source: Booz & Company

. 7 values

6 100% 75% 50% 25% lines dots Booz & Company

criss-
cross
Typically, a CPG company’s routes segments where a company has a of the company’s objectives and
to market encompass three major robust customer base, sustaining increases the value delivered to
activity types: activities would be emphasized in each customer segment by better
order to maintain high levels of addressing that segment’s needs and
• Growing activities are the work customer satisfaction and retention. preferences.
of establishing and expanding In segments where consumer market
customer accounts. share is low, value-adding activities CPG companies can gain valuable
would be emphasized in order to insights into the shortcomings of
• Sustaining activities are the work enhance the point-of-sale experience their existing GTM models when
of servicing and maintaining and build share. they analyze them in terms of
customer accounts. activities and tasks. The consumer
In effective GTM model design, these goods company introduced earlier
• Value-adding activities are the three major types of activities need provides a good example. Originally,
work of brand building and to be broken down to an additional the company had assigned almost all
enhancing the customer experience level for a clear understanding of the of its GTM activities and the tasks
at the point of sale. tasks involved in each of them and required to execute them to a single
the ways to best execute these tasks. person who acted as salesperson and
The degree to which each of these It is the tasks executed in a route to delivery driver. Over the years, as the
activity types is needed will vary market that serve as the basic units customer base grew, the company
widely by customer segment. For for GTM model analysis, design, split these functions, creating a
example, in customer segments with and management processes. A model dedicated sales force that could
low levels of penetration, growing cannot be considered optimal until spend more time prospecting for new
activities would be emphasized the execution of each functional step customers and developing existing
in order to win new accounts. In within it supports the achievement accounts. But as its customer base

The design and operation of an

effective go-to-market model
depends on a holistic analytic view
that incorporates both activities
and the functional steps required
to execute them.

Booz & Company 7

became even larger and more diverse, new tasks associated with a quality force were improperly allocated:
its SKUs grew in number, and the assurance function that ensured that Low-volume, independent retailers
demand for reductions in cost-to- displays and refrigeration equipment did not require personal visits from
serve rose, strains appeared in this were properly maintained and salespeople for orders for a few
model too. repaired when necessary. Further, cases of product, but high-potential
some of the tasks identified by the customers who were capable of
When the company identified the GTM managers applied to some selling more volume and a wider
tasks required in the DSD model customer segments but not to others. range of SKUs needed more one-on-
it was using in its Latin American Wholesalers, for instance, did not one sales attention. The designers
market, it discovered that the full require merchandising attention also discovered that cost-to-serve
range of tasks had expanded beyond since they typically do not display could be lowered if sustaining
the capacity of its sales force and products to consumers. activities were customized according
delivery drivers. Now, for example, to the size, type, and potential of the
there were many tasks associated The company’s GTM managers company’s customer segments. For
with growing merchandising soon realized that there were example, accounts receivable costs
activities that ensured that the numerous mismatches between their and bad debt could be reduced and
company’s products were positioned expectations of the primary route cash flow improved by requiring
and displayed in accordance with to market and its capabilities. For small customers to pay for their
brand guidelines. There were also example, the resources of its sales orders when they were delivered.

Typically, a CPG company’s routes to

market encompass three major activity
types: growing activities; sustaining
activities; and value-adding activities.

8 Booz & Company

A MODULAR The ability to analyze and define
routes to market at the task level
GTM models acknowledges that
there are different alternatives for
APPROACH TO lays the foundation for an orderly accomplishing any given task in a
GTM MODEL and structured approach to GTM
model design. This approach should
specific route to market. Further,
it recognizes that each of these
DESIGN be modular in order to provide the alternatives has different implications
flexibility needed to respond to com- for corporate goals, customer
plexity in customer bases, product satisfaction, and cost-to-serve. The
portfolios, and marketplace competi- larger and more global a company
tion with routes to market that can becomes, the less likely it is that any
economically fulfill customer needs, single alternative will be properly
that are better aligned with custom- suited to serving its entire customer
ers’ preferences, and that ensure base. Thus, the ability to construct
more efficient and effective delivery routes to market using discrete
of value offerings for each customer alternatives supports the creation
segment. of differentiated GTM solutions, as
well as enabling consumer products
The mix-and-match nature of a companies to respond quickly and
modular approach to designing effectively to changes in corporate

Booz & Company 9

strategy and marketplace conditions. differentiated GTM models, one for The resources that the company
A modular GTM model design each major customer segment. One of recaptured in using this new model
process gathers and organizes all these new models was designed spe- for low-volume customers were
of the major activities and their cifically for small retailers, a group reinvested in customer segments with
potential solutions in one place. that had traditionally had a very high higher growth potential. For exam-
GTM designers can then appraise cost-to-serve because the existing ple, a newly designed GTM model
which solutions are best fitted to route to market required a good deal for larger accounts included two
each activity in a route to market of hands-on attention for many low- additional staff positions in the sales
based on strategic, customer, and volume customers. In redesigning force: one dedicated to helping these
cost considerations. This modular this segment’s route to market, the customers grow their businesses and
approach can be applied to a single company streamlined the order gen- build sales volume, and one focused
customer or a complete segment of eration process and eliminated the on making sure the product was
customers (see Exhibit 3). need for field sales calls by creating displayed and merchandised accord-
standard orders that were assembled ing to the company’s trade marketing
When the consumer products com- for delivery automatically. Payment guidelines.
pany applied this modular approach was collected on the delivery route,
to its Latin American market, its reducing billing costs and eliminating
redesign effort resulted in five carrying costs.

10 Booz & Company

Exhibit 3
The Modular Approach to GTM Model Design

COMBINATIONS OF GTM ALTERNATIVES… …CREATE GTM MODELS

Customer Pre-sales
Builder

Account Managing
Model
High-volume food
and beverage retailers
Trade
DSD Pre-sales Auto-sales Marketer DSD

None None

Low-cost
Customer Electronic
Model
Builder
Low volume
mom-and-pop retailers

None Auto-sales

Third Party QA Team Customer

Acquirer
Customer Tele-sales
Builder
Collaborative Indirect
Model
Remotely located
Trade retailers
Tele-sales None
Marketer None
Third Party

Customer Acquisition Customer Development Order entry Distribution

Collections Merchandising Quality Assurance

Source: Booz & Company

. 7 values

100% 75% 50% 25% lines dots criss-

Booz & Company cross 11
A GTM When CPG companies adopt a GTM
platform and develop the capacity to
force deployment; a better consumer
experience through improved execu-
PLATFORM IS A use it, they can construct routes to tion and trade merchandising; an
COMPETITIVE market and redistribute their sales
and service resources in ways that
increase in trade customer satisfac-
tion resulting from differentiated
ADVANTAGE serve customers in a differentiated routes to market that are better
and effective fashion, while control- aligned to customer preferences;
ling costs and complexity. This repre- and, no small matter in recession-
sents a major competitive advantage ary economies, increased efficiencies
in a sector that is characterized by resulting in a lower cost-to-serve
intense competition. as a percentage of total sales. The
same rewards are within the reach of
The benefits that the consumer prod- any CPG company that embraces a
ucts company we have been describ- comprehensive platform and struc-
ing gained from these actions are tured approach for GTM analysis
significant. They include increased and design.
revenues through improved sales

12 Booz & Company

About the Authors

Carlos Navarro is a
Booz & Company partner
based in Mexico City. He
focuses on commercial,
marketing, and distribution
strategy for multinational and
local consumer and health
companies in Latin America.

Juan Valero is a
Booz & Company principal
based in Mexico City. He
specializes in supporting
consumer packaged goods
and agro-industrial companies
in Latin America as they assess
and redesign their corporate,
commercial, and go-to-market
strategies.

Akshat Dubey is a
Booz & Company senior
associate based in Cleveland.
He specializes in helping
consumer, media, and digital
clients advance their growth,
go-to-market, and sales
strategies.

Booz & Company 13

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