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Route to Market ; Sales and Distribution Transformation
Our client which is a long-time player in skin care and plaster market in Indonesia was facing a problem with their sales volume that was shrinking in three years. On average, only 30% of their 35,000 outlets across Indonesia buying their products each month. Even only 16% of the outlets buying skin care brand. The direct operational selling cost was increasing disproportionately to revenues.
To resolve this issue, the client seeking a more effective & efficient route to market for their products. To realize this, Relogica with the team from the client implemented a new product distribution strategy aiming for stronger penetration to the market. This distribution transformation project resulted in a significant increase in sales in the following year.
The client uses 3rd party LPs and outsourcing sales force for direct distribution. One of the brands is strong at modern trade channels while the other brand is strong in the traditional trade channel. The product distributions have been declining for 18% in the last 3 years. This why the client needs an effective & efficient route to market for both product brands.
The client requires distribution expansion in order to cover 1.8 million outlets and continue to be the dominant market leader in the plaster market.
Its current sales and distribution model is limiting in terms of bigger coverage in the Traditional Trade channel and has proven to be less effective in sustaining the 84% product distribution had been achieved few years back.
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On the other hand, one other product requires more focus in the Modern Trade group and overall there is a need to drive business in the Modern Trade through innovative key account management and supply chain expertise. With broad and flexible distribution system they expect to be able to penetrate deeper into the market with the right products to the right channels
Using the SWOT Analysis, client had identified the best route to market strategy with a drastic transformation in its distribution arrangement.
The transformation program defined and implemented the most efficient and effective Road to Market, ensuring superior customer service and outstanding brand availability while addressing the specific needs of Modern Trade & Traditional Trade in relation to both products.
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This includes implementing the new distribution model (from 3 large national distribution partners to more than 30 regional distribution partners), selecting potential partners for logistics and distribution, reorganization of the sales forces. The transformation program has resulted in a significantly stronger penetration to the market and recording a highest sales number ever in the following year after program completion.