As digitization rapidly matures, consumer packaged goods companies are increasingly building and supporting a new route to market strategies. Although in-store retail sales will maintain its dominance in the years to come, e-tailing will continue to grow at a breakneck pace during this transitional period. This necessitates companies in the CPG industry to implement the best route to market strategy to ensure products reach customers in an efficient and cost-effective manner. Route to market intelligence deals with analyzing the market, understanding customers’ requirements, and their needs.
The client is a well-known consumer goods supplier based out of Asia. The client served their customer base using traditional direct store distribution (DSD) model. But, this distribution model was expensive and was unsatisfactory from service level point-of-view. This further precluded the client from doing business with top-tier-organizations in the market. Also, as customers shifted between online and offline channels to make their purchases, the client realized the need to revamp their sales channel.
The client, therefore, approached Infiniti Research to implement a distribution model that will help them have a better relationship with their customers while reducing cost and increasing customer service.
The experts at Infiniti Research visualized the client’s distribution networks and identified inefficiencies in their channel selection. Also, the team reviewed sales activities and channels preferred by the top competitors of the client.
Infiniti’s route to market strategy engagement helped the client to identify the sales model to be used in each region in Asia. They also recommended the best routing system to be used for sales and delivery. The experts also helped the client to analyze the potential vulnerabilities and risks in distribution channels. This subsequently helped them resign and revolutionize their distribution channels.
In addition, Infiniti’s route to market engagement helped the client to achieve a much wider geographical scope at greater speed with methods such as franchising, licence agreements, network marketing models, and retail concessions.
Additionally, Infiniti’s route to market strategy engagement helped the client to:
- Increase their market share by 13% in eight months
- Enhanced CX by 2X
- Provide significantly better service levels
- Identify a scalable approach to discover new growth opportunities
- Reduce cost-to-serve (expenses associated with product distribution process)
What is route to market strategy?
Understanding distribution options in a market is essential for businesses. For example, if your target customer base does not engage with e-commerce, planning to sell your products through an e-commerce website will be futile. Conversely, partnering with international sales agents will be ideal while making a foreign market entry. A route to market strategy provides a roadmap for companies to get their products from the warehouse to the end-users. Determining the best route to market is not an easy task for companies. This involves identifying low-cost channels for improved profitability and balancing between market penetration and control.
How to choose the right route to market?
Stage 1 – Identify customers buying patterns
Companies need to identify their customers’ buying patterns before choosing their sales channel. If target customers prefer online purchases, companies need to concentrate more on marketing online. Understanding the needs of customers is imperative for businesses to succeed in the competitive marketplace.
Stage 2 – Choosing the best sales channel
Today, organizations will need to shift from one channel to another frequently. While choosing a sales channel, companies must look for an inexpensive route to market. This can help them to reduce cost and enhance profitability.
Stage 3 – Measure result from each channel
Analyze all the sales channels frequently and identify the one that has generated more sales. Measuring return on investment can help companies understand the cost of implementing different sales channels.