6 Building Blocks to

General Trade
Development

Feb 2003

General Trade Academy--Asia

 What is General Trade?
To define GT, we need to define Modern
Trade….
 MT are self-service stores which primarily sell to
direct consumers on retail
 Usually, with at least 3 check-out counters
 Includes Supermarkets, Hypermarts and Big
Groceries

General Trade Academy--Asia

Any point of purchase
that does not fall
under this definition
is part of
General Trade!

General Trade Academy--Asia

 What is General Trade?
General Trade includes...
Mom and pop stores, drug stores,
wholesalers, street stalls, kiosks,
cigarette stands, cash and carry stores,
hawkers, ambulant vendors, public
markets
Stores in big numbers and wide reach

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General Trade Academy--Asia
Reasons for buying in MT stores

 Self-service
 Wider variety/More choices
 Cheaper than traditional stores
 Located in business districts
 Presence of other stores another forms of
entertainment
 Comfort
 Image
 Special promotions

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Reasons for buying in GT stores

 Near homes, convenient

 Well acquainted with shop owner
 Buys on credit
 Small item / amount of purchase
 break-cases or individual units
 Emergency purchases
 Impulse purchase

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 Who shops in GT stores?

 People who want convenience

 People who buy very frequently
 People with shoe-string budgets
 People who need individual units or small packs
 People in places where there are no MT stores
 People who buy impulse products
 People who need emergency items
 THEREFORE…for certain shopping occasions,
Everybody still buys from General Trade!

General Trade Academy--Asia

 6 Building Blocks of GT
Development

Training Outlet Supportive

towards Leadership Sales Systems
Field and Structures
Execution

Extensive, Effective Mutually Beneficial

Coverage Reach Distribution
Partnership

Consumer and Customer Understanding

 Consumer, Shopper
and Customer Understanding

 Consumer Understanding translated to relevant products and

promotions
 Who are the consumers who shop in these stores?
 What are their needs?
 How do they buy? How often? At what price?
 How can you talk to them? Media that reach them?
 What products appeal to them?
 Competition?
 GT Shopper research
 Continuous Updating of Understanding and continuous
Innovation to meet the changing needs

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 Consumer and Customer Understanding

 Customer understanding translated to effective channel

strategies
 What are different types of trade channels, from the
shopper’s point of view?
 What are each one’s unique shopper value proposition?
Why do consumers shop in this channel? What
shopping occasion does each serve?
 What are current and future trends on trade
development?
 What are the needs of each trade channel?
 Pricing practices?
 Merchandising and Promotions for each channel?

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 Consumer and Customer Understanding

 Customer understanding based on final customer

where consumers buy, not on Unilever strategy
 Flow of goods
 Distributor and Coverage Models based on
relevance to trade environment
 How can each trade channel be reached?

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 Extensive, Effective
Coverage Reach

 Fixed salesmen’s schedule/PJP/Beat plan

 each outlet covered same day, same time every
week
 Maximize direct coverage reach
 Direct coverage reach
stores covered regularly in a disciplined and
controlled mode
 Coverage Model for each trade channel
 Coverage Model for Urban and Rural

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 Channel Coverage
Strategy Modern
Trade
OPPORTUNITY!
Direct Accounts
Business Potential

Regular Distributor Outlets

OPPORTUNITY!!!

Wholesaler-covered

Accessibility (costs, distance, transport

available…)
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 Cost and Potential
 Viability of Coverage

POTENTIAL

Law of
Diminishing
Returns
COST
As one goes further into coverage, costs
increase while rate of return decreases.

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 Coverage Models

HP/LA HP/HA
1. Distributor Distributor
-Low cost teams -Pre-selling teams
2. Sub-distributor -Split Teams
Potential

LP/HA
LP/LA
1.Small Distributor
Wholesaler
2.Sub-distributor

Accessibility
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 Extensive, Effective
Coverage Reach

 Need to develop critical mass to expand reach,

especially in rural
 Do we have a viable portfolio?
 Lines sold per call do not increase as portfolio
increases (Average: 10-15 lines)
Ideal portfolio at 70-80 lines per team
Split Teams beyond 80 lines

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 Some Facts
 Average Lines per call:
 Pre-selling----18-35
 Ready-Stock--10-14
 Average no. of SKUs In-stock
(Single team, F4) (Single Team, F2)
 Pre-selling----66-85 36-52
 Ready-stock--49-68 18-34

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 Mutually Beneficial
Distribution Partnership

 Because of the goal to maximize direct coverage

reach, we need partners
 Distributors, Agents, Sub-distributors, etc.
 Terms of partnership in a contract
 Clear Roles and Responsibilities
 Expectations from each
 KPIs

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 ROLES
Role of Company Role of Distributor
 Brand Owner and
 Provides manpower,
Manufacturer
finance and other
 Pricing, Advertising and resources
Promo  Services outlets
 Product Innovation based  Implements
on consumer
merchandising plans and
understanding
promotions
 Designs Distributor  Provides credit judiciously
Network
 Breaks bulk
 Designs policies, systems
and standards  Builds trade relationship
 Monitors distributor  Provides UL customer
performance feedback and market info

Brand Owner Service Provider

and and
Strategy Provider Implementer
 What’s in it for the
Partners?
Benefits to Unilever Benefits to Distributor
 Expanded reach to more  Business that gives fair
customers return
 Point of purchase  Enhanced business image
merchandising and clout
 Local market presence  Business knowledge
 Cost Savings  Business that grows every
 Market Development year
 Reach with less risk  Long-term business that
can be passed on

Availability, Growth and an

Visibility in Attractive Return
more stores on Investment
 Syndicate Work
 Given the roles and responsibilities of both
parties in the distributor partnership,
 What roles and specific tasks should Unilever Sales
Executives do, to ensure both parties deliver on
their roles?
 What KPIs should each partner work on to make
the partnership effective?

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 Profitable Exclusive
Distributors

 All aspects of Distributor’s business are

supervised and controlled by Unilever
 Coverage Plan
 Field Operations
 Merchandising strategy
 Pricing and Trading Terms
 Inventory Management/ Order-Booking
 Reports and Systems
 Costs and Financial Management

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 Mutually Beneficial
Distribution Partnership

 Working towards mutual goals

 Relationship that builds long-term partnership
Joint business planning and regular performance
review
 The need to monitor Distributor Profitability
 Low-cost, Efficient operations that deliver coverage
requirements
Different models for different market situations

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 Mutually Beneficial
Distribution Partnership

 Business gives partner a fair return on

investment and time
 The need to monitor Distributor Profitability
ROI of at least 2X the regular bank rate
Absolute profit is based on level of happiness and
distributor profile
Minimize Working Capital, Minimize Fixed Assets to
reduce investment

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 Supportive
Sales Systems
and Structures

 Effective Market Price Control

 specific margins for specific trade channels
 consumer price levels are similar across channels
 Transparent Pricing Scheme
 Supply Chain should be able to service
distributors at highest frequency to allow
distributors to reduce inventory levels
 VMI/ Automatic Replenishment as best practice
 Customer service based on needs

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 Supportive
Sales Systems
and Structures

 Business Building Programs that support channel

strategies
 Field-activation programs, that address local
needs, especially rural
 e.g. Rural Promotions Vans
 Performance-linked reward systems for sales
people
 Based on Secondary Sales; Never on primary sales

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 What is the Last Mile?

{
Factory CDC Distributor

Last
Mile Stores

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 Company Standards
Up to the Last Mile
 Because distributors are means for customer and
consumer reach, Unilever standards need to be
enforced up to the time products reach
consumers
 Customer Service
 Warehousing and Logistics, to preserve quality
 Pricing
 Trading terms

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 Outlet Leadership

 How do we win the consumer at each point of

purchase?
 Relevant products at a pricing level that appeal to
shoppers
 Product Visibility and Brand Development
 Trade loyalty through relationship-building and
offering customer service

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 Outlet Leadership

 Consumer understanding translated to relevant

product development
 Not just small packs of premium products but
products that “talk” to low-income consumers
 GT-focused marketing mix
 Merchandising and Promotions that develop the
market and ensure steady growth
 Best customer service and trade relations that
build loyalty
 Products that meet needs of shoppers for each
trade channel

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 Factors that affect
Distribution
 Coverage Frequency
 Coverage Team Type
 Monitoring/Controlling measures
 Number of lines required for distribution
 Clear category/brand/channel strategies
 What lines are worth pushing across channels?
 One sales team to handle 60-80 SKU; Beyond 80
skus and a volume base, split!

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 Training towards
Excellent Field Execution

 Training conducted at all levels of organization,

addressing needs of the organization
 Field activities executed at the manner it was
intended through regular performance
monitoring
 Field coaching as an important tool for
continuous development
 Distributor HR policies that retain and reward
people based on performance

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Our Focus for the Next 2 Days...

Training Dominating Supportive

towards POS with Sales Systems
Field Relevant SKUs and Structures
Execution

Extensive, Effective Profitable

Coverage Reach Exclusive
Distributors

Consumer and Customer Understanding

General Trade Academy--Asia
 Syndicate Work 2
 Within 30 minutes...
 For each block, determine the following:
 What current practices, systems or policies
contribute to the delivery of the activities under
this block?
 What are the opportunities for each block?
 What activities, practices, or policies should be
implemented to address these opportunities?

General Trade Academy--Asia