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FMCG-issues. Today's questions
On this web site you will find a number of recent questions we received from
manufacturers and clients.
In sharing this information, we provide you with
an insight into the current issues in the world of FMCG. This way we
also enable the reader to form an opinion about our agency. We focus on FMCG
challenges (tough ones occasionally).
Our solutions to these issues include
support for the implementation in the organization.
The advice. The implementation
As a consequence of slow decision making on retail level, we find that our
product introductions are experiencing months of problematic distribution,
numerical as well as weighed. Often this takes 10 months or even a year.
We're also more and more frequently confronted with a growing number of products not being
"released" by central head offices for acceptance in the assortment of their members.
How can we create an environment for a faster decision making process on retail level
get more grip on the committees installed by retailers?
Managing the price increase
How do you implement essential price increases when the resistance against this is stronger than ever?
Which arguments can we put forward to hold the strongest position for negotiations with Albert Heijn, Superunie,
Kruidvat and other major retailers while avoiding a collision course?
The announcement of a price increase is usually done in a letter defending the increase.
Frequently, that's where things start to go wrong. Subsequently, small additional errors are made.
And these errors are promptly used by the retailer to control the situation.
Let us read the letter before you send it!
Our product group is used to a high promotional pressure. Retailers and consumers often buy from one sales promotion to the next.
Meanwhile, the results of our promotional activities decrease significantly. This makes us extra vulnerable, because missing out on a promotion directly hurts our turnover.
How can we decrease the promotional share of our sales while retaining our turnover and turnover growth, without looking
for more and deeper price cuts?
Focus on commercial strategy
As of October 2003 -the moment when Albert Heijn lowered the consumer sales price over a wide range- the cooperation with
the trade has essentially changed.
We are still looking for the right approach and we consider to analyse our organization and commercial policies.
We want a soundboard. A commercial confidant.
An agency to show us alternative structures, new policies and support during the implementation.
Slow decision making
Because of the slow process of decision making in the trade, our product introductions face up to a year of failing numerical and weighed distribution.
And more often than before, we are confronted with central buying offices refusing to “release'' products for acceptance in the assortment of their members.
How can we stimulate faster decision making on head office level without us getting skinned in the process?
Due to the price war initiated by Albert Heijn, trade margins of some of our
products have come under heavy pressure. Retailers exert heavy pressure on
conditions and co-operation. The solutions we offer are insufficient. Time
and again we end up in a tight spot. Threats are made to rationalise the
assortment. How can we get out of this deadlock and how can we rebuild a
situation of constructive co-operation without having to yield to demands of
margin compensation? And how can we prevent de-listing of products with a
Right now, it's a tremendous strain to enforce any necessary price increase.
If anything, retailers tend to negotiate price cuts. How can we acquire
acceptance from retailers for our price markups?
- Preferred supplier
We were preferred supplier for an important account, but more or less overnight we were replaced by an opponent.
How could this happen, how will we get back and how can we make sure our preferent status will be lasting and not temporary?
We work towards a stronger dialogue with our major accounts.
"Together, developing a view for our product categories and setting out the
lines for next years."
But when we ask our trade partners for their strategy
--where they want to take the category-- and their plans for the implementation
of strategy, we don't get any straight answers. The replies are ambiguous.
How can we find out this essential information? And how do we relay
this information to our accounts in a way that makes sure our arguments are
being heard, establishing us as the category leader in our market?
We aim for category leadership. How can we accomplish this position?
We are looking for a Top trade marketeer who's able to restructure and
professionalize our trade marketing department in a very short time.
ECR and Category Management
There is a lot of theorizing on ECR and category management in FMCG.
What we want to find is a practical implementation. We need a concept that's applicable
for all accounts, plus it should get acceptance from (major) retailers.
We have high expectations for our latest product introduction. What we need --right after the product is
launched-- is an analysis which shows us trade and consumer acceptance in Food Retail and Drug.
At the earliest stage.
Where are the possible loopholes and tight spots? And how to establish necessary growth, particularly in the 6-12
months after launching and to prevent de-listing and lost of distribution?
In order to further improve our promotional logistics we want to find a standard procedure
to establish the attraction of promotional activities before they are launched.
Which critical factors are most important here and how will we achieve maximum results in our
View on the category
One of our accounts has asked us for our view on the category.
This question precedes a new space management plan and intensified cooperation.
How do we draw the best plan and the best view. And first and foremost, how do we create acceptance
for our plans and ideas?
Shopfloor multiple chains
How can we increase our influence on the shop floor --esp. with multiple chains--
if our account management fails to get sufficiently positive response at head offices for
Our category relatively counts many suppliers. Retailers are focussed on reducing the number of suppliers.
Concentration will go on in years to come. Retailers refuse to admit our products to their assortment.
This is beginning to hurt and is threatening our continuity. Furthermore, retailers are reluctant to meet us.
In what ways can we best cope with these challenges and how can we regain the retailer's interest in our
company and our products?
The turnover level of a number of products in our assortment has been stable for years
and we feel there is much more to be gained here. We want to see at least 10% in
turnover increase. What approach would Bierman recommend?
We are a small player in the market and we're not getting a break through
in Food Retail. They won't even have us over for a meeting. How can we get in touch
and how can we create distribution in this channel?
Joint category management projects
How can we interest major retailers for joint category management
projects and exchange of information? Something we're failing at today.
- Local marketing
More success in national and regional GWB by
smarter operations." Can you show our sales manager how this works
What are the results of local marketing in terms of turnover and growth versus costs?
- Out-of-stock reduction
Despite shorter lead times, improved ECR and category management projects with retailers
we see an increase of out-of-stocks in our products rather than a decrease this
year. And we expect this to get worse in the coming years.
How can we create structural solutions, considerable out-of-stock reduction
and above-average growth?
We have access to all important
information sources: Nielsen, IRI, Spaceman, our own sales
figures, formula research, shoppers research. We have all these instruments at our
disposal and everything has been properly mapped.
But much of that information is considered dead weight by buyers and
even by ourselves. Which information is relevant and what's less important or not at all
relevant? What information may still be missing? And how will we obtain the position of
strategic trade partner of major retailers?
Bierman's consultancy doesn't stop at providing advice. Translating the findings into practice and supporting Sales and Marketing
is part of our core activitities. At the request of our clients we frequently participate on head office level.
And we have a view. Sometimes we have a dissenting view. Top management does not need yes men. Top management is looking for creative, innovative solutions for issues that can be complex.
E-mail or call us for an introductory assessment or send this page to a colleague.
The retailer is changing.
Phone: +31 315-24.34.94