Holistic route-to-market strategies conquer consumer products’ markets
08 October 2014
Somboon Prasitjutrakul, Human Capital Alliance Senior Advisor looks at efficient route-to-market strategies.
Urbanization throughout Asia in the past decade has drastically changed how consumer products are marketed. The ability to develop effective and efficient holistic route-to-market strategies and platforms are now critical success-factors in today’s highly-competitive markets.
A route-to-market process is a how a company reaches its target audience or where consumers buy its products.
In today’s fast-moving global business environment, companies must now be imaginative in extending market reach, through a well-balanced mix-of-channels.
Well-formulated routes-to-market can be competitive advantages. More and more Asian companies now realize that if they formulate and select the right routes-to-market, today’s hyper-competitive market can be conquered.
Pre-sale and direct store distribution models – no longer efficient
Two decades of economic growth has dramatically changed how consumer products are marketed through Asia, especially in Thailand.
In the past, consumer goods were predominantly sold through tens of thousands of mom-and-pop retailers. Today big box global retailers have now become significant players.
Globalization, has also resulted in huge brand-portfolio and SKU expansions that require effective new holistic route-to-market strategies and platforms.
Online shopping and smart phones have also developed many new distribution channels that successful companies must effectively and efficiently address.
Two inherent problems have made traditional pre-sales and direct store distribution models, wherein sales and delivery personnel visited accounts weekly, no longer efficient or effective.
Initially, companies are unable to maintain reasonable cost-to-serve ratios across larger and more varied customer bases. Field sales and service staff often spend the same amount of time with all customers and the model becomes too expensive for servicing small-independent and low-volume retailers.
More importantly, because some important accounts remain underdeveloped and underserved, sales potential is not fully captured. Higher unnecessary service costs also reduce resources available to establish, maintain and develop new accounts.
Well-designed holistic route-to-market models
To succeed successfully in today’s fast-moving consumer products’ markets, companies must develop route-to-market platforms that are able to regularly reevaluate individual go-to-market models.
Well-designed models must be strongly customer-focused and aligned with the company’s strategic goals and product-value offerings. These attributes must also be supported by strong operational capabilities.
These go-to-market models must also balance customers’ needs, revenue growth targets and cost-to-service for each customer channel. Most importantly, all models must be flexible enough so that they can be easily adapted to changing strategic goals and inevitable competition.
Any successful route-to-market platform must also enable managers to easily identify key activities and tasks required to best serve individual customer segments and provide managers with the tools to test design-alternatives in their quest for more efficient and effective routes-to-market.
Critical model elements
Effective go-to-market models must include several critical elements. They must be market-driven and be designed from the market back to the company to ensure proper customer and consumer alignment.
Too many go-to-models fail because companies take the easy way out by using their own strategic goals and current operational framework as an initial design basis.
At the same time, however effective go-to-market models should also be properly aligned with the company’s overall customer service framework. These coherent go-to-market models support overall corporate goals and most importantly receive support from important stakeholders.
Perhaps, most importantly, high-quality go-to-market platforms must provide management the flexibility to effectively service a diverse customer base with differentiated go-to-market models.
The ultimate benefit
Consumer product companies in Asia that successfully design and implement holistic route-to-market platforms can expect to have right-size sales and services forces and better allocation of critical human resources.
With effective cost-to-service elements, they should also be able enhance the funding of critical point-of-sale product presence and customer experiences. More time can also be spent on promoting and developing high-profit SKUs.
In the end, lower and more effective cost-to-service will result in a much stronger and sustainable corporate consumer product presence.