Optimization of Market Coverage

A Rs. 2000 cr confectionary MNC had split its product range into two, with a separate team of salesmen for each. As the revenue per salesmen was very low, the distributors were not viable, resulting in the Company having to subsidize them. The Company’s retail coverage was only 50% of the market leader’s and wholesale dependence was very high.

A pilot was carried out in Chennai. There were two key insights developed from studying the market and the team’s current work – (a) the frequency of coverage of all retailers was uniform, irrespective of their current business/ potential and (b) Retailers under company’s market coverage included many who were not significant to the category while many larger retailers were being missed out.

The company re-worked its market coverage plan after re-looking at the current sales/ potential of retailers. Retailers were re-categorized and provided bi weekly/ weekly/ fortnightly service, depending on size/ potential.

Better quality of market coverage, leading to a 54% increase in revenue/ salesman. This sparked off new thinking within the company, leading to several changes in distribution strategy over the next few years.

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