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Distribution woes

September 5, 2007

I recently ran a number of workshops for a beverage company in Bangkok, Johannesburg and Dar es Salaam. One central theme kept popping up. Distributors.

Furthermore two questions were continuously asked:

How to manage distributors in emerging markets?

How to keep control of the outlet base?

The following key issues were highlighted:

Distributor selection criteria. Operations do not spent sufficient time drafting a distributor selection criteria. Sales professional are under constant pressure to “make the numbers” and in the process, poor distribution partners are selected.

Distribution means. Optimal vehicle configuration and poor utilization can add substantial cost and affect distribution penetration negatively.

What gets measured gets done. With a lack of capital and IT solutions it is challenging to track and monitor distributor performance in emerging markets. Some distributors question all the paper work and fail to see the value in good measurement systems.

The retail landscape and environment are evolving fast. What worked today is probability not going to work tomorrow. Some emerging operations have used push-carts in the past, and now find them banned by local authorities or unviable with increased traffic.

High staff turnover. Some organizations in fast growing markets complain of staff turnover of 50-100% in distributor networks. Distributor remuneration is unattractive and new recruits are constantly in search of better opportunities.

Successful companies spend substantial time and resources gaining a clear understanding of the distributor environment and dynamics. Adapting to changes in the market as they happens.

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