Consumer goods firms 'need market models'
Manama, July 15, 2010
In the intensely competitive consumer goods sector, consumer packaged goods companies must have a comprehensive, conceptual platform to enable them to design optimised go-to-market (GTM) models.
These models, the designs for the routes to market that companies use to sell and deliver their products and service their trade accounts, are essential for enabling profitable growth, service excellence, and consumer engagement at the point of sale, says a new report by Booz & Company.
'The more diverse a company's customer base and product portfolio, and the more competitive its markets, the more challenging it is to design effective and efficient GTM models,' said company partner Gabriel Chahine.
'For example, one company's trade customer base had expanded to hundreds of thousands of outlets and the brand portfolio expanded four times, while its number of stock keeping units more than tripled.
'Furthermore, competition for retail shelf space continually intensified.
'However, the company was still selling and servicing most of its customer base using a pre-sales and direct store distribution model, in which sales and delivery personnel visited each account at least once per week,' he said.
'There were two inherent problems in applying the same model across a diverse customer base,' he added.
'First, to maintain a reasonable cost-to-serve across a large customer base, the field sales and service staff could not devote too much time to any customer and therefore found it difficult to sell and service the company's growing product portfolio.
'Second, the model was expensive and time-consuming for certain customer segments,' he said.
'Because virtually all of the company's trade accounts were being managed via the same route to market, some accounts were underdeveloped and underserved, while others received more attention than necessary.
'As a result, the sales potential of existing accounts was not being fully captured, cost-to-serve was higher than necessary, and resources that could have been deployed to establish, maintain, and develop new accounts were not available.
'Because analysing and designing GTM models can be a complex task, a consistent and comprehensive platform for rethinking GTM models across the customer base is required,' he added.
'Such a platform must be capable of producing a clear vision of desired route-to-market outcomes, a comprehensive understanding of the roles and functions of the employees staffing the routes, and a systematic approach to GTM model analysis, design, implementation, and management.'-TradeArabia News Service