ForeVision - FMCG Scientific Field Sales & MKTG Techniques

FMCG – Scientific Field Sales & Mktg Techniques
3 Constraints in the Industry
Time Money Manpower
2 Excelarating Growth
FMCG Industry Forecast
• Nielsen has revised the forecast for the

FMCG sector for the financial year 2020
to flat compared to its earlier forecast of
a growth of 5-6 per cent
• As per Nielsen, Rural areas grew three
times of the all India numbers in June.
While the national growth numbers
were at 4.5 per cent, rural India grew at
12.5 per cent with urban areas at a 50
miniscule .04 per cent.
Growth Drivers For India’s Fmcg Sector
Growth Opportunities - Indian Fmcg Industry
Online Start-up
Penetration
FMCG Ventures
Porters Five Forces Analyses
Typical Consumer Buying Process
Problem Recognition
Awareness
Information Search
Evaluation of Alternatives Consideration

Purchase Decision Intention
Purchase
Buying
Post-
Purchase
Evaluation
Love
Customer Purchase Process
In Store Selection
Customer In Store
Purchase Store and on Retailer Product After sales
Purchase Trigger
Influencers Awareness
Selection shelf Push Selection service
Process availability
Diff. & Comm. Product Portfolio

Strategic
Marketing Influencer Management Diff. &Comm.
Initiatives
Channel
Tough Competition – Who is Winning?
Changing Consumer Buying Behaviour
Basic Principles of FMCG Industry
Understand FMCG
200 ml Unit – Rs. 20/-; 1 Litre Unit – Rs. 100/-
40 inches
200ml 200ml 200ml 200ml 200ml 200ml 200ml 200ml 200ml 200ml
8 inches 200ml 200ml 200ml 200ml 200ml 200ml 200ml 200ml 200ml 200ml
Total Shelf Space 320 sq. inches

Total QTY 40+40 = 80 nos.
Total MRP Rs. 1600/-
Retailer Margin 15%
Total Earnings Rs. 240/-
Days for Liquidation 10 days
Understand FMCG
40 inches
1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr
8 inches
1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr 1 ltr

Total QTY 20 nos.
Retailer Margin 15%
Understand FMCG
40 inches
200ml 200ml 200ml 200ml 200ml

1 ltr 1 ltr 1 ltr 1 ltr 1 ltr
200ml 200ml 200ml 200ml 200ml
8 inches 200ml 200ml 200ml 200ml 200ml
1 ltr 1 ltr 1 ltr 1 ltr 1 ltr
200ml 200ml 200ml 200ml 200ml

Total QTY 40 + 10 nos.
Retailer Margin 15%
Understand FMCG
• High Volume Low Profit Industry
• Products are less durable and have a shorter shelf life
• Strike rate – This is the amount of times a particular product is being bought. In
other words this is the frequency of sales of a particular item
• Basket fill rate – This is the size of the order from any one particular customer. The
larger the volume of the item, the higher the basket fill rate
• E.g. 200ml can v/s 1 Litre Bottle of Juice
• Balancing Strike Rate and Basket Fill Rate
– Ongoing Process, to start of “Best Guess” based on Historical Data and then
Optimize
– Focus on improving Basket Fill Rate – “Upselling”
Typical Characteristics of Industry
Frequency of Purchase
Instinctive and Impulsive Purchases
Low Cost – Different Sizes
Low margin & Higher Shelf Turnover
Level of Involvement is low during Purchase decision
Heavily Promotions and Advertisement driven
Typical Characteristics of Industry
Volume
Value
FMCG Categories
Foods
Health Care
Personal Care
Beverages
Household Care
Oral Care -
Toothpaste
Fabric wash - Skin Care - Confectionary
Laundry soaps Creams, Staples/ Cereals
and Synthetic Lotions, Gellies
Bakery products
detergents Hair Care - Hair - Biscuits, bread, OTC Products
Household Oil, Shampoos cakes Tea
Band-aid
cleaners - Personal Wash - Coffee
Snack food Contraceptives
Dish/utensil Soaps
cleaners, floor Chocolates Juices
Cosmetic & Antiseptics
cleaners, Toilet Ice cream Bottled water
cleaners, Air Toiletries Pain Relievers
Processed fruits Health
fresheners, Talcums beverages Energy Powders
Insecticides and Deodorants Vegetables
Soft drinks Health
Mosquito
Perfumes Meat Supplements
repellants,
Metal polish Paper Products - Dairy products
and Furniture (tissues, Branded flour,
polish diapers, rice, sugar
sanitary)
Shoe care
50% 19% 31%
Product Line And Product Mix
• Product item - SKU

• Product Line Length (Line Extension)
– Too short if profits can be increased by adding items
– Too long if profits can be increased by dropping items
– Line Stretching – Downmarket, UpMarket, Two-way
– Line Filling – More items within same Range
• Repositioning e.g. Tata Nano to Tata Nano GenX, Colgate Cibaca
VedShakti, HUL Lever Ayush
• Product modification
• Planned obsolescence
Excelarating Growth
Multi-Level & Multi-Brand Strategies
Brand Extensions
Premium Body Washes
Soaps
Shower Gels
Lifestyle Hand And Body Lotions
Facial Cleansers
Popular Deodorants
Shampoos
Economy Conditioners And Hair Styling
Winning in Many Indias (WiMI)
Market Planning
Assessing Market Potential
• The Market Potential of a district, or the purchasing power, is a combination of several

variables -
1. Does it have the Means or Ability to purchase or consume?
– Means or the Ability to buy is the foremost requirement for any marketing activity to
take place. A district with higher Means or Ability necessarily qualifies for marketing
activity.
2. Is it willing to buy and consume; what is the consumption pattern?
– Having Means need not necessarily convert to Consumption. It is important for a

district to have an inclination to consume.
3. What is the exposure to mass media or what is the measure of Awareness?
– Even if a district is inclined to consume, consumption should be facilitated with the

ability to create adequate Awareness. Therefore, Awareness becomes another
important variable to district prosperity.
4. Does it enjoy infrastructure or Market Support to facilitate marketing activity?
Excelarating Growth
Assessing Market Potential
Per capita bank
Means
deposit
Per capita Ownership of
Consumption
income consumer
Proportion of durables
affluent Employment in
Market Support
•CD1 - Low priced
households range (less than Rs. trade
5000)
Employment in
Ownership of •CD2 - Mid priced
transport Print media
Awareness
range
house (Rs. 5000 - Rs. readership
10000) Bank credit to
trade Television
•CD3 - High priced
range (greater than readership
Rs. 10000) Bank credit to
transport Radio
Consumption listenership
of Fast Moving Households
Consumer electrified Cinema
viewership
Good Banked
households Internet access
Phone
ownership Road density
Female literacy
Car ownership Population
density
Market Planning
• MII - Market Intensity Index (a measure of the quality and affluence of the
consumers)
– This index is based on per capita values and all India MII has been indexed as
100. MII reflects the quality of the market. A higher value of this index would
mean a greater concentration of the more affluent.
• MPV - Market Potential Value (a measure of aggregate potential)
– This was indexed with Greater Mumbai as 1000, the district with maximum
market potential, and consequently all other districts’ potentials are relative to
this potential.
• MEI - Media Exposure Index
– Market can be created and led by media. The constituents of this index are
exposure at district level to five types of media, namely, Print, Television, Radio,
Cinema and Internet.
– These exposures are measured in per capita terms and, as in the case of MII,
indexed in relation to all India as 100.
Weighted Averages
Per capita bank deposit – 22%
Per capita income – 24%

Means - 21%
Proportion of affluent households – 26%
Ownership of house – 28%
CD1 – 17%
MPV * MII CD2 – 18%
CD3 – 13%
Consumption – 20%
Consumption of Fast Moving Consumer Goods
- 16%
Awareness – 20%
Phone ownership – 14%
Market Support – 39%
Car ownership – 22%
Types of Businesses & Effective Channels
Types of Businesses
B2B
B2C
C2C
C2B
B2G
G2B
G2C
Distribution Channel
Agents
Promote & Generate Sales
Merchants
Buy, Stock & Sell
Facilitators
Facilitate Delivery
Distribution Channel Attributes
Directness
Novelty Levels
Attributes
Variety Density
FMCG Distribution
Intensive
Distribution
Distribution
Strategy
Exclusive Selective
Distribution Distribution
FMCG Channels
Company • Category Wise

• Positioning wise
B2B B2C
CFA
Modern Trade/ Aggregators/

Institutional Professional Distributors Wholesalers
Customers Wholesalers
Small
Outlets/
Institutional Retailers Small Retailers
Franchisee
Customers
END USER
Direct vs. Indirect Distribution
Cross Learning from other Categories –
• Zero Day Inventory

– Reducing distance between its distribution centres and retail stores that the
company reaches directly
– Direct distribution results in much better offtake of brands - ~ 2 to 3 times higher
brand offtake (sales)
– E.g. Britannia
• Every day, around 20,000 people who are on Britannia’s direct payroll, visit
retail stores, analyse local demands, suggest required tweaks in product
placements based on the company’s in-house analytics and take orders on
their mobile phones through an app
• The orders are then delivered directly by Britannia from the nearest
distribution centre within a day
• 14,000 distribution points, 4 times higher than what it was in 2013
B2C - Field
Sales Process
Excelarating Growth
Field Sales Team
NPD – New Product Development Cycle
Idea Generation
Idea Screening
Concept Development and Testing
Business Analysis
Product Development
Test Marketing
Commercializat
ion
Launch
Field Sales Process
Strategic
Sales Forecasting Market Planning
Objectives
Scientific Retailing Target Setting Building Blocks
Manpower Distributor/Retailer
Inventory Planning
Planning ROI
Market Coverage & Manpower Planning
Market Planning and Analysis
• Understanding Universe
• Reach
• Penetration
• Depth
• Category Development Index (CDI)
• Brand Development Index (BDI)
Reach – Penetration – Depth (MS)
Total O/Ls – 100nos.
No. of O/Ls your brand is

present – 70nos.
Reach = 70%

Total Potential – 100 Crs
No. of O/Ls your brand is present

– 70nos.
Total Potential of Outlets in which
your brand is present – 80 Crs
Reach = 70%; Penetration = 80%
Penetration <= Reach - Penetration > Reach –

High Potential Outlets Good Market Coverage
left out and low and optimum
effectivess utilization of resources
Reach > 80% Penetration > 90%

Total Potential – 100 Crs
No. of O/Ls your brand is present

– 70nos.
Total Potential of Outlets in which
your brand is present – 80 Crs
Your Brand Sales – 16Crs
Reach = 70%; Penetration = 80%; Depth (Mkt Share) = 16%
CDI – BDI Based Market Prioritization
Market 1 Market 2 Market 3 Market 4 Market 5 Market 6 Market 7 Market 8 Market 9 Market 10
CDI 10% 15% 15% 15% 10% 10% 15% 5% 5% 5%
BDI 10% 5% 5% 10% 10% 15% 15% 10% 5% 5%
Types of Retail Outlets
Types of Outlets Pen-Portrait
• Departmental Stores/Supermarkets
• Have a team of Sales Representatives
Key Retail Outlets/ Premium • Huge Display Space and Storage Space
Outlets • Generally have Institutional Customer tie-ups
• Technologically advanced and make use of ERP systems
• Expect Merchandise support – POPs
• Specialty Stores/ Convenience Stores
• Generally have 3-4 Sales Representatives
A Class Outlets • Located in High-Catchment areas
• High Potential but less Glamour
• Margin Hungry outlets and look forward for Schemes
• Specialty Stores/ Convenience Stores
A- Class Outlets
• Same as A Class but don’t stock your product
• Mom and Pop Stores/ Kirana Stores/ Discount Stores
• May have 1-2 Sales Representatives for delivery
B Class Outlets
• Also buy from Wholesalers
• Order frequency is low
• Pan Shops/Telephone Booth/Xerox Shops
C Class Outlets
• Generally buy from Wholesalers
Sales as a Science
• Scientific Retailing
• Callage Norms
• Permanent Journey Plan
• Beat Plan
• Manpower Planning
• DSR Reports – Daily Sales Reports
DSI/TSI TSE TSM ASM

Parameters
Ret Ret+ Inf Other Ret+ Infl Other Ret+Infl Other
Number of calls per
35-40 18+2 - 9+1 - 4+1 -
day
Number of days per
6 5 1 5 1 4 2
week
Class of outlets to be KROs, A, KR0s,
- KR0s,A - KR0s,A -
focused A-,B,C A,A-
Beat Plan and PJP to Rescue
• Beat Plan Strategy helps addresses territory coverage in a Scientific Manner
• Stock outages are periodically reported from retail stores as well as distributors
to continually refine supply logistics
• Stock displays at all stores are continuously reported to ensure best presentation
to every walking-in consumer
• Competitor intelligence is reported from the field; helping the headquarter plan
strategies
• Unproductive time of the field force is replaced with more qualitative time with
retailers and distributors
• Connected and visible teams mean more territories can be served by managers
and new territories can be explored
Marketing Promotions & ROI
IMC – ATL, BTL & TTL
• ATL – Above the Line
– Television, Newspaper, Magazines, Radio, Outdoor, Digital
• BTL – Below the Line
– Events, Exhibitions, Activations
• TTL – Through the Line
– Social Media
BTL Avenues
Kiosk Society/Mall Activations Mobile Van Activation
Sampling Voucher Distribution Events, Exhibitions
Sales Promotions
Consumer Promotions
Dealer/Distributor Promotions
Sales Force Promotions
Consumer Sales Promotions
• Sampling & Free Trails
• Coupons
• Demonstrations
• Contests / Lottery
• Money Refund Offers
• Premium Offers (Perceived Price Reduction)
– Direct Premium : With-pack premium
– Reusable Container
– Free in Mail Premium
– Self-Liquidating Premium : Bundle Pack offers
• Price Off Offer
Dealer/Distributor - Trade Promotions
• Buying Allowance
• Merchandise Allowance
• Price Deals
• Push Money or Premium
• Co-operative Advertising
• Dealer Sales Contests
• Dealers’ Listed Promotion
• Dealer’s Gift
• Point of Purchase - Merchandise
Sales Force Promotions
• Bonus to Sales Force

• Sales Force Contest
– Month
– Quarter
– Half-Year
– Year
– Focus Product Category
– Service Delivery
– Customer Satisfaction
• Accelerated Growth Program
• International Conferences and Meetings
On-Field
Calculations
Excelarating Growth
On-field Calculations
• Numbers can be deceiving
• Important to understand the flow of Value Chain
• Important Concepts –
– MRP & MOP
– Distributor/Retailer/Wholesaler Margin
– Primary Sales, Secondary Sales and Tertiary Sales
– Retailer/Distributor/Wholesaler Landing Price
– Schemes and Trade Promotions
– Distribution Rotation and Slab-wise Schemes
– ROI
DLP & RLP
Company
Primary Billing
Distributor DLP – Dealer Landed Price
Secondary Billing
Retailer RLP – Retailer Landed Price
Tertiary Billing
Customer
DLP & RLP
Company Net Realization to the Company
Primary Billing
DLP – Dealer Landed Price
Distributor
DM – Dealer Margin
Secondary Billing
RLP – Retailer Landed Price

Retailer
Tertiary Billing RM – Retailer Margin
Customer
MOP – Customer Landing Price
DLP & RLP
Primary Billing
Distributor
Secondary Billing

Retailer
Customer
DLP & RLP
Primary Billing
Distributor
Secondary Billing

Retailer
Customer
DLP & RLP
Primary Billing
Distributor
Secondary Billing

Retailer
Customer
DLP & RLP
Margins on
Margins
Company on MRP
Landing
Price
Primary Billing
80 82.8
Distributor 5% Margin DLP = 80 DLP = 82.8
Secondary Billing
5 4.14
Retailer 15% Margin RLP = 85 RLP = 86.95
Tertiary Billing 15 13.05
Customer `100/- `100/-
DLP & RLP
• RLP = MRP- Retailer Margin (RM) – Special Scheme – Secondary Scheme

• RM on MRP
– RLP = MRP- Retailer Margin (RM)*MRP – Special Scheme*MRP – Secondary Scheme*MRP
– RLP = MRP*(1-Retailer Margin (RM) – Special Scheme – Secondary Scheme)
• RM on RLP
– RLP = MRP- Retailer Margin (RM)*RLP – Special Scheme*RLP – Secondary Scheme*RLP
– RLP = MRP / (1+RM+Special Scheme+Secondary Scheme)
• DLP (Distributor Landing Price) = Retailer Landing Price (RLP) - Distributor Margin (DM)
• DM on MRP
– DLP (Distributor Landing Price) = Retailer Landing Price (RLP) - Distributor Margin (DM)*MRP
• DM on DLP
– DLP (Distributor Landing Price) = Retailer Landing Price (RLP) - Distributor Margin (DM)*DLP
– DLP = RLP / (1+DM)
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FMCG – Scientific Field Sales & Mktg Techniques

3 Constraints in the Industry

Time Money Manpower

• Nielsen has revised the forecast for the

Evaluation of Alternatives Consideration

Diff. & Comm. Product Portfolio

200 ml Unit – Rs. 20/-; 1 Litre Unit – Rs. 100/-

Total Shelf Space 320 sq. inches

200 ml Unit – Rs. 20/-; 1 Litre Unit – Rs. 100/-

Total Shelf Space 320 sq. inches

200 ml Unit – Rs. 20/-; 1 Litre Unit – Rs. 100/-

200ml 200ml 200ml 200ml 200ml

Total Shelf Space 320 sq. inches

• High Volume Low Profit Industry

• Products are less durable and have a shorter shelf life

• E.g. 200ml can v/s 1 Litre Bottle of Juice

• Balancing Strike Rate and Basket Fill Rate

– Focus on improving Basket Fill Rate – “Upselling”

Instinctive and Impulsive Purchases

Low Cost – Different Sizes

Low margin & Higher Shelf Turnover

Level of Involvement is low during Purchase decision

Heavily Promotions and Advertisement driven

• Product item - SKU

Premium Body Washes

Economy Conditioners And Hair Styling

• The Market Potential of a district, or the purchasing power, is a combination of several

1. Does it have the Means or Ability to purchase or consume?

2. Is it willing to buy and consume; what is the consumption pattern?

– Having Means need not necessarily convert to Consumption. It is important for a

3. What is the exposure to mass media or what is the measure of Awareness?

– Even if a district is inclined to consume, consumption should be facilitated with the

4. Does it enjoy infrastructure or Market Support to facilitate marketing activity?

Per capita bank deposit – 22%

Per capita income – 24%

Ownership of house – 28%

MPV * MII CD2 – 18%

Company • Category Wise

Modern Trade/ Aggregators/

• Zero Day Inventory

Concept Development and Testing

Scientific Retailing Target Setting Building Blocks

• Category Development Index (CDI)

• Brand Development Index (BDI)

Total O/Ls – 100nos.

No. of O/Ls your brand is

Total O/Ls – 100nos.

No. of O/Ls your brand is present

Reach = 70%; Penetration = 80%

Penetration <= Reach - Penetration > Reach –

Reach > 80% Penetration > 90%

Total O/Ls – 100nos.

No. of O/Ls your brand is present

Reach = 70%; Penetration = 80%; Depth (Mkt Share) = 16%

• Permanent Journey Plan

• DSR Reports – Daily Sales Reports

DSI/TSI TSE TSM ASM

• Beat Plan Strategy helps addresses territory coverage in a Scientific Manner

• ATL – Above the Line