veronique stephan, sales & business development director, johnson & johnson innocos rome...
DESCRIPTION
Translating Consumer Trends Into New Product Development, Innovation & Marketing Strategies Uncovering valuable and profitable insights from market research and studies Working with suppliers and partners to share knowledge, combine resources and find new insights Translating future trends into innovative products and/or processesTRANSCRIPT
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Utilising third-party intermediaries
as innovative way to drive your
Brand in Emerging Markets
InnoCos Conference, Véronique STEPHAN
Rome, May 23rd, 2014
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Why I am talking to you today
• Efficient go-to-market model is required to succeed in new markets
• Third Party Sales Intermediaries are often underestimated
• Sales Intermediaries can provide innovative solution
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The background
• In today’s economic context, generation of revenues is a priority
• Revenues to be created by geographical expansion
• Emerging markets identified as a great opportunity
• More risk averse culture to protect current profit
• Essential to strive for cost efficient and low risk market entry
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Key requirements for a successful launch
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What do we need to understand?
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What are the local commercial
policies?
What are the sales channel/
retailers?
What are the local
commercial policies?
What is the strategic
role of the channel/retailer?
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Enablers of sales executional capabilities
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Adequate sales structure
Passionate and skilled sales force
Negotiation power with the trade
Relationship to the trade
internal
external
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We need a Mr. “Right” organization for efficient go-to-market
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Muscle Mr. “Right”executional skills
Brain commercial knowledge
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We need to make a decision: own or rent?
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Shall we rent the services of Mr. Right
organization at a third-party?
Shall we build our own Mr. Right organization?
In-house Outsourcing
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Different solution to outsource the selling function
Involvement level + services
Cost $
Sub-distributor / Non exclusive
Exclusive distributor
Exclusive distributor with marketing budget
Full Market ManagementAccess outsourced
Trading Relationship
providing Access
Wholesaler
Agent model
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Key benefits of outsourcing Mr. “Right” organization vs. full-fledged own organization
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Speed
Financial
Limited HR challenge
Focus on brand-building
Flexibility
Quality
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Saving time and accelerating launch
.No need to establish legal entity.Limited recruitment.4 months to launch with a distributor
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Various compensation models
Conventional model
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Innovative modelRevenues based on
market share company profit
Mixed model
Flat fee for services
Mark-up/Margin
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Financial benefits
.Lower cost.No upfront spending, “pay as you go concept”.Less financial risks.Easier to secure money collection
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Third-party need to be managed properly
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1. Market evaluation, distributor selection
2. Appointment. Legal, Training
3. Management. Goal setting, Motivation, On-going training
4. Termination
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Changes in the retail environment impacting the profile of the distributor
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Yesterday
• Unstable economy• Fragmented trade• Few local KAs• Focus on
distribution, not display
• Technical distributor capabilities
Today
• Maturing free market economy
• Rapidly increasing trade concentration (top 10>50%)
• First international KAs
• Competition among retailers
• Focus on display and distribution
• KAM required from distributor
Tomorrow
• Growing economy• High trade
concentration (top 5>50%)
• More international KAs
• Free cross-border trade
• Focus on display, not distribution
• KAM skills as key success factor
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5 key success factors to work with TPI
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Relationship based on partnership and trust
1.
• Understand the role of your brand for the distributor
2.
• Clarify roles and responsibilities
3.
• Share and align on brand potential and plan
4.• Strive for transparency
5.
• Educate your own organization on specificities of the go-to-market model
• Clarify roles and responsibilities
• Share and align on brand potential and plan
• Strive for transparency
• Educate your own organization on specificities of the go-to-market model
• Understand the role of your brand for the distributor
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Misconceptions towards distributors
• They are an “intermediate step” until we reach critical mass
• They do not “own the business, they do not feel it”
• Their staff are not as competent or well trained as us
• Distributor margins are too high, these costs reduce our top line
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Conclusion
• Key to have a “Mr. Right” organization to ensure commercial execution
• Often more beneficial to outsource
• Innovative and tailor-made
• Specific distributor management approach
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GRAZIE