Process – A newer addition to the traditional 4Ps

So you have a great product and you have defined and validated your target audience(consumer segment). How do you deliver your brand/SKU to the customer(brick & mortar/online) and make it available for your target consumers to buy? The next P, Process, covers this aspect.

The sales process followed in any organisation influences execution in store and how the brand/product is perceived by the consumer. As for your customers, it is crucial to make sure you’re easy to do business with, meaning you’re efficient, helpful and timely. 

The sales process followed directly impacts execution, including delivery of your brand/SKU to customers, in-store availability, placement on shelf, how communication with the customer is managed, new product launches and so on. An effective sales process will include all aspects of the 7Ps and describes the series of actions or fundamental elements that are involved in delivering the SKU to the customer, for the consumer to buy.

By making sure your team has a good sales process in place, you will also save time and money due to greater efficiency, and your standard of service to customers will remain consistent and high, which is excellent for developing a great brand reputation and to build a great relationship with the customer.

The more seamless and personalised your sales processes are, the happier your customers will be. Customers typically feel frustrated or dissatisfied by late shipping, additional costs, poor communication or a lack of support and when brands/SKUs run out of stock in store.

Every part of the customers’/consumers’ journey has to be seamless and efficient. 

Regularly assessing, adjusting and adapting your sales processes will help to structure your sales efforts so that your team can function at optimal efficiency. A great way to do this is to borrow from the tech industry. Map your customer and consumer journey on a regular basis. How does your brand get to the final user? What are the various steps in the journey to the final user/consumer and what process do you have in place that facilitates this? Prioritise elements that overlap with the customer/consumer experience.

The more specific and seamless your sales processes are, the more smoothly your sales teams can carry them out. If your sales team isn’t focused on navigating procedures, they have more time to build great customer relationships, enabling the business to grow.

Some elements to consider are as below: 

  • Is your customer carrying the right levels of stock? If too little, how much more needs to be ordered and why? If too much, how can you help the customer reduce this before stock needs to be destroyed/written off?
  • Is your logistics solution cost-efficient and timely? What does your scheduling and delivery logistics look like?
  • Will your customers run out of product at critical times?
  • If you are an e-commerce business, do items ship reliably from your website?
  • How often do you meet with the customer’s team and how do you communicate price changes, POS artwork changes and packaging changes to customers?
  • What technology do you use? How can your customer access it? Do they need access?

If you get more than one complaint about any element of the sales process, understand what’s going wrong and develop a solution. 

When you get your sales process right, your sales team will

  • be more productive, manage more customers and also have better relationships with customers as a result.
  • maintain or gain market share for your brand. Fewer customers delist your brand/SKUs as your team responds immediately to consumer needs/feedback.When people love your products, they experiment less and so remain loyal to your brand.
  • receive feedback from customers and consumers, and ensure it reaches relevant decision makers within the organisation. Feedback helps you change what needs to be changed, and helps your business grow.
  • sell and deliver the right volumes of your brands/SKUs so your customers are neither overstocked nor understocked.

This includes any technology sales teams use in their normal course of work. This ranges from sales intelligence solutions teams use to calculate sales volumes through to merchandising apps that monitor shelves.

If your sales process is efficient and any sales technology you use is in keeping with the process and with market conditions, your brand thrives and so does your business.

If you’d like to learn more about how to set up an efficient sales process or how to maximise sales team productivity using the right sales technology and tools, email me on veena@salesbeat.co

Promotions and retail sales

This is probably the most complex of the 4 (or 6) Ps.

Promotion includes all those activities that involve communicating the benefits and features of your brand/product.

Through it, you let potential customers and consumers know what you are selling. In order to convince them to buy your brand, you need to explain how it solves their problem/what it is, how to use it, and why they should buy your brand.

An effective promotional effort contains a clear message that is targeted to a certain audience and is done through appropriate channels.

The audience of your promotional activities include, but are not restricted to:

  • Consumers
  • Customers where consumers can buy your brand
  • Influencers
  • Collaborators

The key objectives of promotional activities are:

  • Building awareness
  • Creating interest
  • Providing information
  • Stimulating demand
  • Differentiating the brand/product
  • Reinforcing your brand

You may choose multiple channels to reach your target audience and achieve these objectives. There are 5 elements to the promotional mix and are as below:

Advertising

This mode of promotion is usually paid, with little or no personal message. Mass media such as television, radio or newspapers and magazines is most often the carrier of these messages. Apart from these, billboards, posters, web pages, brochures and direct mail also fall in the same category. While this method has traditionally been one sided, advertising on new channels such as the internet may allow for quick feedback from your target audience.

In order to pick the optimal advertising channel:

  1. Define objectives – What are you seeking to achieve and your end goals of the campaign?
  2. Decide on the budget – How much are you willing to spend on the campaign?
  3. Adoption of the message – What message are you trying to convey?
  4. Review past campaigns for effectiveness – If your company has done other campaigns in the past, go through post campaign evaluation notes for how effective they were.

PR and Sponsorship

Public relations (PR) is usually focused on building a favourable image of your business. PR or publicity tries to increase positive mention of the product or brand in influential media outlets.

You can do this by doing something good for the neighborhood and the community like holding an open house or being involved in community activities.You can engage the local media and hold press conferences as part of your promotional strategy.

Through these press conferences, you can engage with newspapers, magazines, talk shows and new media such as social networks and blogs. This could also mean allowing super users, or influencers to test the product and speak positively about it to their peers.

This may or may not be paid. For example, sponsoring a major event and increasing brand visibility is a paid action. Sending free samples to a blogger then depends on their discretion and opinion and is not usually swayed by payment.

Previously this has been the least used channel by brands, especially the large ones; but is becoming increasingly important in the current world we live in.

Events & Experiences

Through events, you can make your product known to both your customer and your consumer. These include industry events targeting trade (supermarkets, wholesalers, distributors, restaurants etc) or consumer facing ones. This even includes tasting experiences you may decide to hold and is commonly seen in the beer, wine and spirits industry.

Personal selling

Direct selling connects company representatives with the consumer. These interactions can be in person, over the phone and over email or chat. This personal contact aims to create a personal relationship between the client and the brand or product. Some personal sales strategies are incentive programs, sales representations, samples, sales meetings, and trade shows.

These days this is common in sales of high value consumer goods like consumer electronics (think Apple store), art galleries, high end wines and whisky etc.

Direct marketing

Direct marketing allows you to promote the product or service to an individual consumer.

This strategy allows greater adaptability of the product and the messaging to the needs or interests of the consumer.

The main direct marketing channels are:

  • e-mail
  • internet
  • telemarketing
  • mail
  • e-commerce

Sales promotions

These are usually short term strategic activities which aim to encourage a surge in sales. These could be ‘buy one get one free’ options, seasonal discounts, contests, free samples or even special coupons with expiration dates.

Promotions can vary by target demographic and need to be carefully evaluated for each store, consumers in the location and time of the year.

Key considerations when designing the promotional mix for your brand

Whenever a brand/company sets out to design its promotional mix, the brand team needs to consider the following points:

  1. Stage in the brand/product Lifecycle – Eg. At the launch stage there may be a need for more aggressive and informational advertising.
  2. Nature of the brand/product – If a brand/product is not new in its usage or function, there may be less need for information and more focus on brand equity creation.
  3. Budget – This is fairly self explanatory. For those with large marketing budgets, TV ads and large billboard campaigns may form part of the mix and those on a shoestring budget may rely on other elements of the mix to create awareness.
  4. Cultural Sensitivity – If a product is to be launched in a new international market or even a new region in a country, it is critical to take into consideration local sensitivities. These include both cultural and religious considerations.
  5. Target Market Composition – The people who make up the target market need to be considered before committing to a promotional mix. What media do they consume the most? How and where do they shop?
  6. Competitor Actions – The methods your closest competitor uses influences your mix as well.

If you’d like to learn more about how to derive the right mix for your brand, the different channels for promotion or how markets or regions can influence mix, email me on veena@salesbeat.co

Place/Placement – where do consumers find your brand?

As you can tell, this is a KPI most applicable to brick & mortar stores. Where the brand/SKU can be located in a store has an outsized impact on sales.

There are 3 components to this:

  • The aisle (where on the shop floor) where your brand can be found
  • The arrangement on shelf
  • Share of shelf

The aisle

When consumers walk into the store, they usually have a list of brands/SKUs they’d like to buy. Based on previous in-store experience or based on aisle labels, consumers can then locate the shelves on which these brands/SKUs are stacked. It is key that brands and SKUs are placed in the most intuitive aisle/shelves as it maybe hard for consumers to find it otherwise. If this happens, it is likely that the store/brand may lose the sale.

It is equally important to also place your brands/SKUs on shelves adjacent to complementary products, to encourage impulse sales. For example, the consumer who walks in to buy baking powder to bake a cake, may end up buying cocoa or icing sugar which is placed adjacent to the baking powder. Another example is the instance when a customer buys a dip that’s placed in the crisps(chips)/snacks aisle.

The arrangement on shelf

Important shelf arrangement KPIs are:

  • eye-level product placement,
  • sequence of products,
  • point of sale materials,
  • adjacencies (which we touched on in the previous section),
  • planogram compliance and
  • category separation

In a store, shelf space allotted to a brand is limited. Eye level shelf space is prime real estate in this context as this encourages trial and impulse buys.

Eye level is ‘buy’ level

Also, given the space constraints, sequence of placement becomes important as this can have a major influence on sales. Many brand owners prefer to place associated products near their ‘hero SKUs’. Eg: placing conditioner right next to their hero SKU, a shampoo. This encourages impulse buying and may encourage a consumer to switch brands eventually.

Point of sale (POS) materials are perhaps the most under-utilised levers. POS materials are usually present on or near shelves in the form of posters or shelf talkers. They may also be free standing display units like the ones seen at at the end of an aisle, close to the entrance of the store or near the tills, where people are likely to make an impulse purchase while waiting to pay. They often introduce a new launch, a promotion, or the value proposition of the hero SKU. Challenger brands usually are great at this.

A great example of point of sale material

A Planogram is a detailed schematic about how products will be placed on shelf. There are 3KPIs that relate to this:

  1. Availability
  2. Placement in the right area and with the right sides facing the consumer
  3. Sequence of placement (i.e. sequence in which the brands’ various SKUs will be placed on the shelf)
There are several apps available to monitor and ensure planogram compliance

Category separation becomes important when there is a key differentiating factor between other brands on the same shelf and yours and even between your own brands. Eg: you may want to place your biodegradable toothbrushes separate from your regular toothbrush SKU.

Colgate has placed its charcoal infused biodegradable toothbrush SKU in a shelf ready unit

Share of shelf

This refers to the space allotted to your brand/SKU on the shelf, by the store. While this is part of the planogram, it is important to address this separately. Enough shelf space needs to be bought or negotiated for your brand, so that your product is displayed practically and advantageously. 

Here, Warburtons Toastie has 10 facings across Medium, Toastie & Super Toastie

You may have heard others referring to facings as a key metric here. This is a key part of shelf space and refers to how many products in your SKU face the customer.

As with the ‘P’ from last week’s blog, Product, today’s ‘P’, Placement also assumes availability of the brand/SKUs in store. Here, we are not just referring to presence but also having enough stock in store to meet consumer demand.

If you’d like to get more information on any of these KPIs, discuss this in more detail or understand how availability can be solved for, especially within the context of today’s fast changing world, email me on veena@salesbeat.co

Retail execution in FMCG

Excellence retail execution has been a focus for FMCG companies for several years now as they all concur that retail excellence results in increased sales and market share. Each company has coined its own term for this.

‘Perfect Store’ by Unilever, ‘Golden Store’ by P & G, ‘Right execution daily’ (RED) by Coca Cola and ‘Flawless Execution’ by PepsiCo.

The concept was popularised in the early 2000s by Bain & Unilever to maximise ‘sell out’ in store (i.e. maximising sales to us, consumers!) Unilever adds an additional ‘P’ to the 4P framework by Jerome McCarthy. Their 5 Ps for ‘Perfect Store’ are:

Product – The ‘type’ of product or brand sold by the store is important. For example, a 24pk of a snack brand will not sell as well as a single serve or sharing size does in smaller convenience stores. On shelf availability is an important KPI to consider when it comes to products. The consumer should be able to find the product on shelf when they come in to buy it. The ‘Out of sight, out of mind’ principle applies here. They discourage customer loyalty and can spur the switch to a competitor. When brands have their finger on the pulse of retail execution, they can avert out-of-stocks before they happen.

Tricana – An example of flawless on-shelf availability and placement

Place – The placement of the SKU/brand on shelf determines volume of sales. Again, the out of sight, out of mind principle plays a key role here as placement on the highest or lowest shelf is not as desirable as eye level placement. ‘Place’ covers the number of ‘facings’, the shelf space allotted to the brand and placement of the brand alongside complementary brands/products (Eg: placing icing sugar, flour and baking powder together or ketchup, mustard and mayonnaise together ).

Price – A brand may implement all the best practices of a perfect store and still not succeed if pricing is not right. The price should not just yield companies a healthy margin, but also be competitive vs other brands/SKUs in the same category. Also, it is key that the price is indicative of other qualitative factors that differentiate the brand from competition, but more on Proposition later. To complete the circle on Price, for pricing to effectively drive sales, it is important to ensure that the price tag that communicates the pricing is on shelf close to the product.

Communicating price and promotion

Promotion – Promotions are an effective driver of sales. Promotions are mostly made for star products and new product launches. However, these days, it is common for brands to run promotions for certain times of the year that are conducive to sales of the brand. Eg: Wine sales in the run up to Christmas; Chocolate sales in the run up to Easter etc.

An excellent example of ‘Proposition’ – Communicating the differentiating factor

Proposition (the 5th P added by Unilever) – In addition to the 4Ps from the 4P framework, Unilever has a 5th one – Proposition. We touched upon this in ‘Price’. It is important that the brand has distinguished itself from competition and gives consumers a reason to choose your brand vs completion. Proposition is usually communicated through shelf ‘talkers’ aka shelf ‘barkers’

Retail execution is critical for consumer goods brands to win in today’s competitive market. Consumers have limitless options in virtually any category they’re shopping for, so making products available and appealing to consumers is essential to winning share. We’ll delve deeper into each of the 5 Ps in the next few weeks.

To learn more about how a data driven approach can ensure the 5Ps are executed and to learn more about retail execution, email me on veena@salesbeat.co