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Importance of Visibility Over Tertiary Sales in FMCG Industry
Posted on: Oct 11, 2010
Even though the traditional mom and pop retail shops have been getting a lot of attention in recent times, it is the trend of Super Specialty Stores that is really taking off. The Specialty Stores promise big business to the FMCG companies, all thanks to the changing attitude of majority of consumers who prefer to shop from specialized stores like Reliance Food, Reliance Retail, Big Bazaar and Subhiksha, when compared to the stand-alone stores.
Attesting to the fact that consumers have changed their buying perspectives does not make things easier for the FMCG companies. This focus shift has also made the consumer behavior more volatile. An attractive TVC, schemes that work on a buy some get some free model, discount offered or a fall in price is enough for the consumer to choose a brand. In a situation as fragile and fickle as this, tracking the sales till the consumption level is critical for strategic decision making.
Why Super Specialty Stores are capturing all the Attention of FMCG Stores?
Super Specialty Stores are the bulk buyers of FMCG products. With thousands of prospective consumers visiting these stores daily, and the evident fact that FMCG products are sold quickly and at a lower cost, Specialty Stores have emerged as the hub of attention by sales and marketing strategists of FMCG companies.
Leveraging IT is not an alien concept to majority of the FMCG stores, but that stopped till the C&F agents, or at maximum, the distributor level. To know the changing consumer behavior by just snipping the fingers, it is essential to traverse down till the Tertiary Level in this linear sales and distribution structure.
In a hypothetical example where the manufacturer of a healthcare product like a disinfectant has a robust method in place, may be a top-notch ERP, to track its Primary product movement and product sale from manufacturer to C&F agent or distributor. The secondary level sales from distributor to the sub-distributors or retailers is been tracked too; but the last and the most crucial level loses its significance. With little knowledge on how consumers are behaving to this disinfectant, the continuous production of the product can come out as a major loss to the manufacturer.
Tracking Sales at Tertiary Level hence becomes one of the key criterions in analyzing:
a)
Consumer Behavior
b)
Plan the good’s production
c)
Strategize the product distribution route plan
d)
Limitations in consumer knowledge that influence decisions
e)
How consumer motivation and product development decision strategies co-relate
f)
How manufacturers can adapt and improve their marketing campaigns and strategies to reach the consumer more effectively.
Tracking the sales manually at any given level is not possible. Unlike the sale of home appliances or electronic items that is relatively slow, the FMCG products sell quickly and in great numbers. They also have varied SKUs and product categories which make it impossible for the FMCG manufacturer to tap the data using excel sheets. Automating the process becomes a mandate; with companies like CalvinKare, Britannia, India Pistons, etc. already cashing on this IT advancement.
Tertiary Sales is a great criteria for knowing the consumer behavior, which inadvertently also acts as product testimonial. Drawing inference from the same example of a disinfectant, a sudden drop in its sale at the tertiary level will help you analyze the reasons- and when you know the “reasons”, there is nothing stopping you from improving your sales.
Reader's Comments
IP-Phones
Nov 17, 2010 at 14:18 PM
I have read your blog on importance of visibility over tertiary sales in FMCG industry. It is very nice. Since FMCG product sale quickly & in great number. So, It is impossible to keep the record of product manually or in excel sheet. So, we use machine to feed data automatically. We can see example of in Reliance Retail,Big Bazzar ...etc
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