About the Consumer Goods Industry
The Consumer Goods industry is undergoing a lot of change. From being a very direct and straight forward business of selling and marketing Consumer Goods into the retail chains and end-customers, the world has become more complex for these types of customers. In this White Paper Absalon is focusing on the B2B-processes between the Consumer Goods companies and their sales channel – the retail stores/chains. There are some insights within this industry that is important when understanding the needs and requirements for a new CRM solution.
Mature vs. Emerging Markets
The overall insight is that there are now a significant difference between Mature and Emerging Markets. In the Mature Markets that are mostly dominated by large retail chains, most commercial agreements are made on HQ-level at the Retail Chain and not between the CPG Sales Rep and the Retail Store Manager. Campaigns are often decided and carefully planned on chain-level and pushed out to the stores. Pricing, store promotions, etc. are directed and executed centrally. All orders from the Retail stores are done through the internal systems of the retail chain and in the larger chains the final decisions on what actually gets on to the shelves of the stores is in the hands of the logistical processes. In the Emerging Markets however, the “traditional” environment of doing business is still often applicable. Campaigns are most often planned by the Consumer Goods companies and promoted directly on retail store level and orders are negotiated and executed between the CPG Sales Rep and the Retail Store Manager.
The transforming Role of the Sales Organization
In the Mature Markets, the role of the Key Account Manager (KAM) targeting the Retail Chain HQ is key to even get into the stores. The role of the KAM is to plan campaigns, negotiate overall commercial conditions, and to safe guard that the negotiated agreements are executed within the retail chain according to the agreement.
In the field, the role of the Sales Rep is transforming for the Mature Markets. From following a specific route and mechanical execution, the sales calls, depending on Campaigns, etc., is now transitioning from the traditional “Hunter”-role to a more “Farmer”-approach. In order to grow the sales within each store, there is a much larger need for Sales Reps with a knowledge, understanding and interest in making that specific retail store successful with the use of the Consumer Goods product portfolio. This can be achieved with extensive Category Analysis across the customer base in order to find “best practice” in how to grow the overall sales within the store by using the specific products from the Consumer Goods Company.
It is only by being a true business partner to the retail store manager/owner that the Sales Rep will grow the business, provide added value and build strong relations. As this way of working is still developing, there are many pitfalls ahead. However, for those Consumer Goods establishing well executed best practices in the Mature Market, this can be implemented for the Emerging Market as a competitive differentiator.