Professional Documents
Culture Documents
A mouse trap, irrespective of how good it is, wont sell if consumers cant find
it. And irrespective of how widely it is distributed, it wont sell if consumers
dont like it. It takes both push and pull to succeed in the marketplace.
At Coca-Cola and Pepsi roles are split between Bottlers / Brand Owner
Demand
- In-store activities
raise awareness,
create perceptions,
generate desire and
influence brand
choice
TerryOConnor(CEO Courtsmegastore)andMoonSungHyun
(MDSamsung)atlaunchofSamsungs3DTVsinSingapore
- Displays
- Promotions
- Sampling
- In-store launch
- in-store media
- Mobile
all the above raise product visibility, enhance
communication and could trigger the desire to
purchase
impact on brand choice
Example: A Product Launch
60+% aware of brand
80+% aware via in-store
50% aware via advertising
Interactive Sampling
Declining demand.
If (turns x earns) is deteriorating
- poor stock turnover
- shrink shelf space
- shrink range
- de-list
Depth
SalesperStore
Sales = No of stores distributing Sales per store
Numeric Distribution
- Product presence as % of stores in universe handling product
(but does not reflect on quality of distribution)
Share in handlers
Channels and chains with the high sales density for the product
category or family of products
Outlets that attract the shopper profile the brand wants to target
Mass Market
Low Price
% of All HHs
Gender
Male
Race
Chinese
Female
Malay
Age
Others
15-24
25-34
35 - 39
40 - 49
50 - 65
Household Income
Low (Up to S$2000)
Middle (S$2001-S$6000)
High (Above S$6000)
Not disclosed
Personal Income
Low (Up to S$1000)
Middle (S$1001-S$4000)
High (Above S$4000)
No Income/Others
Occupation
PMEB
Other white collar
Blue Collar
Housewife
Others
Marital Status
Single
Married/others
Household Size
'1-3
'4-5
6+
13
Female 15-29
Female 30-39
Female 40-49
Female 50+
Right Assortment
Using Research to prioritize assortment
Right assortment
Need compromises!
The Battle for Shelf Space
27
26
25
24
Brand A
23 23 23 23 23
24 24
23 23 23
23 23 23
22
22
20 20 20
20 20 20 20
19 19
19
Brand B
15 15 15 15 15
16 16 16
15 15
16
23
17
14 14
Brands Performance
Volume Growth (%) - MAT 00
29.5
41.6
38.1
36.6
30.1
Y1
Brand A
Brand B
Y2
-2.4
Brand A
Brand B
Which Items?
Prioritise selection of item based on
Sales Per Point of Weighted Distribution
Share in handlers
Average Sales per Store
Rate of Sale (Adjusted Average Sales per Store)
Cash Rate of Sale
Rate of gross profits
Brand Distribution
Item Distribution (3 of)
Average # of Items stocked
= 80% . Width
= 80%, 50%, 70%
= 2.5 Depth
Total Sharp = 80
Panasonic model 1 = 55
Panasonic model 2 = 55
Panasonic model 3 = 45
Panasonic model 4 = 45
Panasonic model 5 = 50
Panasonic model 6 = 50
Sharp model 1
Sharp model 2
Sharp model 3
Sharp model 4
Sharp model 5
Sharp model 6
Sharp model 7
Sharp model 8
300
= 30
= 35
= 45
= 45
= 55
= 28
= 45
= 37
320
Panasonic
- Efficiency Rate.
- Share of items
: 300 / 60
:5/6
: 300 / 620
=5
= 80.3%
= 48.4%
Sharp
- Efficiency Rate
- Share of items
: 320 / 8
:4/8
: 320 / 620
= 4
= 50%
= 51.6%
So which 7
should the
retailer stock
and why?
Panasonic
60% Brand
Distribution
80% Brand
Distribution
Sharp
80.3%: 5 out of
6 items Stocked
50%: 4 out of
8 items Stocked
Width
Depth
Width
Depth
Sharp has greater width of distribution whereas Panasonic has greater depth. It
appears that Sharp has greater success in getting listed, whereas Panasonic is
better at securing depth where listed
100
Cheeky Cherryade, 14
Weighted Distribution %
95
90
85
Original Sarsi, 14
Outrageous Orange,
18
Groovy Grape, 11
65
60
Zesty Zappel, 8
55
50
100
120
140
160
180
200
220
240
260
Volume Sales
Wtd Distribution
Sales = 10,000 kg
Wtd Distribution = 80%
Sales
100
Cheeky
Cherryade, 14
95
Distribution %
90
85
80
Original Sarsi, 14
Outrageous
Orange, 19
Fruitade
75
70
Zesty Zappel
65
Groovy Grape, 9
60
55
50
100
120
140
160
180
200
220
240
260
$100
Panasonic sells
Panasonics value market share is
$ 20
20%
$ 80
80%
Share in handlers
Market Share (%value) in shops where product is present
PC = Product Category
Sales = 10,000 kg
Numeric Dist = 50 %
# of outlets = 800 in Country
Average Sales = 10,000 / (0.5 x 800)
= 10,000 / 400
= 25 kg per store
Nescafe
- Sold in 2000 outlets
- Average sales per store is 200 kg per month
Maxwell House
- Sold in 100 outlets
- Average sales per store is 300 kg per month
Maxwell House
100
Nescafe Sales = 1500 kg / Store
in these 100 stores
= 30,000 kg/month
Numerical Distribution
= 5%
= 50%
# Supermarkets
= 2000
Rate of Sales =
Volume Sales
Equivalent # of stores distributing the product
Maxwell House
2,000
Store
100
Nescafe Sales in these
100 stores is 1500 / Store
Nescafe
Average sales = 200 / Store
Rate of sales = 200 / Store
153
Dell Inspiron
123
Acer TravelMate
82
Toshiba Dynabook
76
Dell Latitude
64
Fujutsu LifeBook
56
MacBook
49
Dell Precision
46
HP Compaq Notebooks
41
Acer Extensa
39
Dell Studio
33
HP Omnibook
32
Acer Aspire
30
$50
$35
$10
Retailer
$5
$5
Government
Manufacturers
Suppliers, Wages,
other Costs
Manufacturer
Retailer margins lie between 5 and 30% (fmcg). They vary across
categories, brands and retailer. Because of the sensitivities involved,
margins are rarely disclosed
Sales Volume
Price
Sales Value
Numerical Distribution
PC Weighted Distribution
# Supermarkets
Sales per store
Rate of sales
Sales per store ($)
Cash Rate of sales
Margin
Rate of Gross Profit
= 9,000 packs
= $3 per pack
= 27,000 $/month
= 50%
= 75%
= 600
= 9,000/300 = 30 units/store
= 9,000/450 = 20 units/store
= $27,000/300 = $90/store
= $27,000/450 = $60/store
= 35%
= 0.35 x 60 = $ 21 / Store
Feather
Sunsilk
45
450
1200
36
(20%)
180
Dove
250
70
Pantene
325
90
thousands of litres
thousands of $
35
(50%
)
18
thousands of $
Rate of Gross Profit for Dove is comparable to that for Sunsilk, despite
much lower Rate of Sales
- Share in handlers
12.5%
- FairPrice should consider stocking as its selling well in
competing stores
Share in handlers
Sales per point of distribution
rate of sales
rate of gross profits
with that of competing brands
If your product fares better, you have a case
Item 1
Item 2
Item 3
Forward
Stock %
5.0
5.0
5.0
Sales %
7.5
5.0
3.5
Ratio
67
100
143
20
15
10
Share of MARKET
0
0
10
15
20
25
5000
4500
4000
Whatsthe
relationship
betweensalesand
distribution?
Linear?
3500
3000
2500
2000
Logistic?
Exponentialdecay?
Linear
1500
Logistic
1000
Exponential
500
0
10
20
30
40
50
60
70
80
90
100
Weighted Distribution
=
500
=
80
=
400
= 100,000
=
250
OOS. Distribution
Number of stores OOS.
Average sales per store
Total lost sales
=
10
=
50
=
250
= 12,500
Assumes:
1. Probability of OOS at any store, at any point in time (during the period
under investigation) is 10%.
Brand loyalty
Product loyalty
Store loyalty
Urgency to use
Her response is determined by which of the above is of
greatest importance at the time of purchase
Consumer alternatives
Low
24
37
6
61
7
Brand
5
Loyalist
13
91%
22
6
11
6
5
16
4
8
3
Delay buying
Buy other variant
Buy other packsize
Brand
Switcher
3
56
39
53
Liquid Milk
Breakfast
Cereal
67
69
9
Infant Milk
Go to another store
18
Store
16
Switcher
Instant
Noodles
Chocolates
Carbonated
Drink
Source: Nielsen.
Based on a survey
in Singapore in the
late 1990s.
High
Low
%
Delay buying
Switch store
7
61
6
37
Infant Milk
Liquid Milk
24
22
Breakfast
Cereal
Instant
Noodles
16
16
Chocolates
Carbonated
Drink