roland berger shaping the future sales 2015 e 20110224
TRANSCRIPT
2010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
Munich/Berlin, November 2010
Results of the study conducted by Markenverband and Roland Berger Strategy Consultants
Shaping the future – SALES 2015
1
2 Participants and structure 9
Background of the study 3
Page
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3 Selected results 13
2 Participants and structure 9
4 Contacts 40
32010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
1 Background of the study
The smaller playing field for branded products and the driving-force retail trends will influence the future of selling
What does this
"SMALLER PLAYING FIELD"
EUR -20 bn
PLAYING FIELD FOR BRANDED PRODUCTS
1
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What does this
mean for the
future of
Sales?"DRIVING-FORCE RETAIL TRENDS"
Source:Roland Berger
EUR -20 bn
2
Undifferentiated brands are losing ground
Manufacturer
brands25%
Manufacturer
brands
60%
15%
TODAY FUTURE 2015
1
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Private
labels
Other food
retailers
20%
80%
Discounters
75%
Source:BBE; BTE; Roland Berger
Private
labels
Other food
retailers
40%
60%
Discounters
85%
EUR -20 bnPLAYING FIELD FOR BRANDED PRODUCTS
FMCG total, sales (volume)
10 major retail trends are driving this development
Efficient price-oriented formats are on the rise
2Bargaining power is increasing
1
From bargaining to bargaining "plus"
Less is more6
7
2
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Retailers want to become brands
2
3
increasing
4Retailers are learning to understand shoppers better and better
Professionalization and growth of private labels
5
Managers are moving from manufacturers to retailers
7
8
Selective backward integration
New services and business models
9
10
Source:Roland Berger
The resulting challenges for Sales …
Management organization
> Is there a "real" organizational structure?> Is a constant willingness to adapt needed?> Is the customer a management issue?
Key account > What is ideal international customer support?> How can one best deal with discounters?
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Key account management
> How can one best deal with discounters?> What new forms of cooperation are needed in addition to
terms and conditions?
Field organization> Does the field organization justify its existence
(POS impact vs. costs)?> What is the best organizational model?> How important is it to further develop skills?
Trade Marketing> How far advanced is the development (in terms of tasks)/
upgrading of the function?> Which structural foundation is being pushed?
Source:Roland Berger; Markenverband
… especially with a view to marketing
"When Sales and Marketing work well together, companies see substantial improvement on important performance metrics:
82010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
Philip Kotler
important performance metrics:sales cycles are shorter, market entry costs go down, and the cost of sales is lower"
Philip KotlerEnding the War between Sales and Marketing,
Harvard Business Review, July 2006
Source:Business Review
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2 Participants and structure
The issue is highly relevant, so many top players took part in the study
COMPANIES (extract)PARTICIPANTS
CEO 10%
46 top FMCG managers in Germany
102010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
Other (e.g. Business
Development)17%
Head of Key Account
Management5%
Head of Sales/
Sales director40%
Marketing/Sales
director28%
The study covered 30% of German FMCG sales
Source:Roland Berger; Markenverband
It encompassed a wide range of company sizes and categories
Characteristics of participating companies
BACKUP
SALES [EUR m] CATEGORY COVERAGE
500-1,000 13%
>1,000 11%Beverages 18%
112010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptxSource:Roland Berger; Markenverband
SALES GROWTH [%]
<100 28%
500-1,000
48%100-500
13%
>10% 13%
0-5%
15%5-10%
63%
<0% 9%
Oral/personal
hygiene11%
Frozen foods/
ice-cream8%
Confectionery/
baked goods17%
9%
37%
Fresh meat/
sausage
Other
The cogent structure of the study led to high response levels
> COMPREHENSIVE 55 detailed questions,interviews integrated
> SIMPLE Modular, can be filled outboth on and offline
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> SIMPLEboth on and offline
> FORWARD LOOKING
Integration of trends,challenges, etc.
25% response rate
Source:Roland Berger; Markenverband
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3 Selected results
Summary of the main results
Management organization
> Real structure?> Constant willingness to adapt?> The customer a management issue?
> Matrix organization!> Never stagnation in the organization> Clearly a management issue
> International customer support? > Great dissatisfaction, the future is in
CHALLENGES RESULTS
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> Further development (of tasks)/"upgrading"?
> Structural foundation?Trade Marketing
Key account management
> International customer support?> Dealing with private labels and
discounters?> New forms of cooperation vs. histories?
> Great dissatisfaction, the future is in "International Lead KAMs"
> Ever more focus on discounters> Fix the basics
Field organization
> Justified existence (POS impact vs. costs)?
> Organization model?> Future skills?
> Many field organizations lack the critical size
> New cooperation concepts are needed> Traditional visit concepts and KPIs> Develop skills!
> Almost no further development> Great potential not yet being exploited> Further development toward integrated
planning, shopper insights
Source:Roland Berger; Markenverband
General conclusion: Individualized solutions are needed – Ideas have to be embedded in the category context
What does that
mean for
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mean for
MY company and the future of
OUR Sales unit?
Source:Roland Berger; Markenverband
> FROM historically grown structures, characterized by
> TO individualized and effective solutions, adjusted to the
> Slow processes> Little understanding of the
retailer> Little knowledge of shoppers> Historically grown
organizational structures> …
> Brand positioning> Category drivers> Customer and retail structure> Corporate culture> …
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3 Selectecd results – Detailed
Organizational changes must lead to a better understanding of the customer
Management organization
1. Matrix organization is replacing functional organization
2. Organizational development never stops.
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2. Organizational development never stops. Constant adjustment is needed if growth is to be achieved
3. The cost component of Sales varies greatly
4. Sales is being recognized as a CEO management issue
5. Manufacturers still have too little understanding of retailers
Source:Roland Berger; Markenverband
Matrix organization is replacing functional organization
1
Management organization – Structure of Sales [%]
> The choice of organizational structure is independent of how the
TODAY
Functionalorganization
FUTURE
70 35
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independent of how the FMCG categories are covered
> In particular smaller companies(< EUR 100 m in sales) today have function-based organizational forms
organization
Divisional organization
Matrix-organization
International customer-business teams
Other
Source:Roland Berger; Markenverband
4
0
13
13
7
14
33
11
Organizational development never stops – Constant adjustment is necessary for growth
Management organization – Organizational changes [%]
2
FREQUENCY MAIN REASONS
Fundamental, major change 35 18 59
2 17 17 759Drive growth
192010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptxSource:Roland Berger; Markenverband
Reduce costs
Speed up realization
Sales excellence at POS
Sales excellence at the customer
Internal excellence of Sales
Category excellence
major change
Fine tuning
No change
Every year Every 1-2 years Every 2-3 years >3 years
35
27
18
4
2
394 4
594
17
46
39
33
44
39
35
17
26
23
28
34
7
9
9
4
7
2
20
24
35
26
30
46
Essential Important Less important No response
The cost component varies greatly, due to varying category coverage and market penetration
14>10%
SALES COSTS
3
> The share of sales costs
Management organization – Cost component [% of sales]
202010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
16
11
21
27
11
5-7.5%
7.5-10%
No
response
<3%
3-5%
Source:Roland Berger; Markenverband
1) FTE = Full time employees
> The share of sales costs varies greatly across all company sizes. No surprise because of respondents' varying category coverage
> Sales costs account for more than 5% of total sales revenue at half the companies
Sales is being recognized as a management issue –CEO is "CCO"
4
Management organization – Customer orientation (industry viewpoint)
Orientation of the company toward customer needs
Role allocation/clear separation of tasks
ROLE OF THE CEO …
212010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
… Feels responsible as the "Chief Customer Officer" (75%)
… Delegates tasks/ customer responsibility to the Sales Manager (25%)
Clear mirroring of customer structure/allocation of contacts
Clear definition of roles, which arethen also realized accordingly
Clear definition of the roles, but these are not lived out accordingly
91%87%
Less clearly defined
13% 9%
Source:Roland Berger; Markenverband
Manufacturers do not understand retailers well enough yet – Good cooperation at operational level, less knowledge of their strategies
5
Management organization – Customer orientation (retail viewpoint) [positive net value]1)
EVALUATION OF FMCG MANUFACTURERSSTAFF ORGANIZATION
-1Understands our specific 6
16
Business relationships
Overall evaluation
222010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptxSource:Advantage Group; Markenverband; Roland Berger
1) Evaluation of 20 leading makers of brand-name articles by German food retailers in 2009. Difference between positive and negative evaluations
CATEGORY DEVELOPMENT
25
-1
5
11
Understands our specific strategies/goals and reacts to them
Visits are productive
Makes objective category recommendations
Offers category development plans that help us achieve our growth/revenue goals
18
18
7
47
16
11
6
Customer service
Logistics/Supply chain
Trade marketing
Consumer marketing
Category development
Staff organization
Business relationships
Great need for improvement in KAM
1. KAM is highly relevant for sales
2. Satisfaction with international customer support is very low
Key account management
232010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
support is very low
3. "International Lead KAM" is today seen as the solution for the future, with clear responsibilities as the main challenge
4. More focus on supporting discounters
5. Fixing the "basics" is still a challenge. Companies try to overcome their past instead of being future- and shopper-oriented
Source:Roland Berger; Markenverband
The high sales revenue relevance of KAM is driven by retail consolidation
1
National key account management – Structure
NATIONAL REGIONAL
Structure [%]
87
Existence of regional KAM [%]
70Independent KAM YES
242010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
13
87
Coverage [% of sales]
10
10
9
28
43
30
70
Organizational foundation [%]
Regional KAM is part of a national KAM team
Regional KAM reports to the head of the field organization
Other/no response
Source:Roland Berger; Markenverband
40
7
53
Interdivisional KAM
Independent KAM
90-100%
70-90%
50-70%
<50%
No response
YES
NO
Great dissatisfaction with international customer support – Very few have found the best model
2
International key account management – Structure [%]
Support of international business
Satisfaction with the organizational foundation of the international KAM activities
59
252010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
41
52
7
Not satisfied
Satisfied
Highly
satisfied
59
41
YESNO
Source:Roland Berger; Markenverband
"International Lead KAM" is seen as the future solution – Clear responsibilities are the main challenge
3
International key account management [%] – Organizational structure
One KAM for both the national 23 15
> International Lead KAMs will
TODAY FUTURESupport of international key accounts
262010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
One KAM for both the national and the international business
One KAM for international business
One "internat. Lead KAM" in charge of a team of nat. KAMs for the international business
18
17
19
23
23
7
15
15
48
15
International KAM team
Other
Source:Roland Berger; Markenverband
> International Lead KAMs will increasingly take over the management of international customers
> A purely international perspective from one single KAM is becoming less relevant
> Responsibilities have to be clearly defined between countries, divisions and customers
TODAY FUTURE
Discounter support is more in focus – Specific management of the customers and the format
National key account management – Responsibility for discount [%]
Support of discounters (multiple resp. possible)
4
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> Specific management of discounters
> Discount support either by single KAMs or format KAMs depending on the size of the discount customer
One KAM for each discount customer
One KAM for the discount format
One KAM for each retail group, across all formats
7
13
44
48
4
22
48
37
Other
Source:Roland Berger; Markenverband
Basics are a big problem – One key challenge is learning to understand the customer better (1/2)
National key account management – Challenges [%]
5
Responsibility/competence Customer and shopper orientation
More empowerment ofKAMs
45 2233 0
Improved understanding of the customer and clearer 22
474
0
282010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptxSource:Roland Berger; Markenverband
KAMs
Ensuring category competence in cross-category teams
More responsibility for managing the agreed activities from beginning to end
45
38
41
22
28
22
4
37 0
30
33 0 the customer and clearer mirroring
Clarifying the own role with customers
Building up internal skills for the customer
Focus off conditions and on shopper orientation
50
59
23
37
15
8
4
67 2
26 0
13 0
Essential Important Less important No response
Basics are a big problem – The focus is still on overcoming the past, rather than on shopper-oriented cooperation (2/2)
National key account management – Challenges [%]
5
System of conditions Incentives/Internal efficiency
Reducing the growth of the share of terms and 2670
0More incentives/ performance orientation 41 2633 0
292010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptxSource:Roland Berger; Markenverband
share of terms and conditions in sales
Optimizing the terms and conditions system through customers
26
20 8
4
70 2
70
Essential Important Less important No response
performance orientationand cost transparency
Standardizing processes, tools and KPIs
More support of KAMs by IT, stricter control
54
65
20
15
422
20 0
More impact can be achieved at the POS
1. Many field organizations lack the critical size
2. There is more confidence in external
Fieldorganization
302010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
2. There is more confidence in external service providers than in intercompany cooperation
3. Traditional criteria determine the visit concept
4. Little formulation of variable incentives
5. The focus is on developing skills
Source:Roland Berger; Markenverband
Many field organizations lack the critical size
1
Field organization – Structure
Own field organization within the unit
Travel time per sales rep [minutes]
Yes 80%
312010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptxSource:Roland Berger; Markenverband
No. of sales reps [#]
Greater efficiency!
0-80
80-120
>120
No response 11%
16%
3%
70%
Size of the field organization [# sales reps]
Yes
No 20%
80%
External service providers are trusted more than intercompany cooperations
2
Intercompany cooperation
Alternative organizational models for the field organization[Share of companies without their own sales reps]
322010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
14%
86%
0%
Other
Outsourced to an external service provider
Intercompany cooperation
of field organizations
Source:Roland Berger; Markenverband
Traditional factors dominate the visit concept
3
Field organization – Management [%]
Relevant criteria for defining the visit concept
KPIs for managing the field organization (multiple responses possible)
61Assertion of
serviceFormat type 26 13 2239
332010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
36
36
39
43
55
57
Speed of
implementation
Adherence to
the planogram
Shelf share
Out-of-stock/
availability of
space
Distribution
Number of
customer visits
service
Source:Roland Berger; Markenverband
Format type
Revenue potential
Category driver
Levels of freedom at the outlet
Support of the outlet
26
26
37
33
30
13
28
17
39
22
22
20
20
22
15
39
250
9
30
Essential Important Less importantNo response
Often inadequate variable incentivation for sales reps – There is upward potential here
4
Field organization – Management
Share of variable remuneration for sales reps
9%0%
342010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
0%
0%
9%
38%
44%
60-100%
40-60%
20-40%
10-20%
0-10%
Source:Roland Berger; Markenverband
> Little incentivizing of sales reps through variable remuneration
> Little use of KPIs that have a major influence on the impact at the POS
The focus is on developing skills
Field organization – Challenges [%]
Responsibility/competence Efficiency/benefit Management/incentives
5
Further develop the sales reps' skills
Increased need to justify the use of sales reps
Improved management of the 28 2250 0 30 15 2430 37 15 2226
352010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptxSource:Roland Berger; Markenverband
sales reps' skills justify the use of sales reps
management of the activities at the POS
Separation into “simple" and “complex" skills
Focus on raising efficiency
Better support through IT systems
More incentive through less/more simple KPIs
22 242224
50 0
33
41
15
17
22
2220
30
30
41 13 2422
26
Essential Important Less important No response
Further potential can be realized in Trade Marketing
1. Hardly any development beyond classical category management and Trade Marketing
Trade Marketing
362010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
Marketing
2. The great potential of this function is seen but not yet anchored in the role
3. Commercial planning and shopper insights are the key challenges
Source:Roland Berger; Markenverband
Hardly any development beyond classical Category Management and Trade Marketing
All grouped in one
1
Trade Marketing – Structure [%]
STRUCTURE OF THE DEPARTMENTTasks within the org. unit under consideration(multiple responses possible)
Category 67
TODAY FUTURE
372010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
All grouped in onefunction
3
15
32
50
8
10
23
59
Divided up between two functions
Divided up between more than two functions
Other
CategoryManagement
9
2
28
35
50
67
67
Trade Marketing
Shopper insights
Channel management
Integrated commercial planning
Other
None
Source:Roland Berger; Markenverband
65%
75%
Great potential is seen in the function, but it is not yet anchored in the role
Trade Marketing – Role
CUSTOMER
CATEGORY Developing category know-how and category trends
Designing and evaluating retail-related
2
382010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
35%
50%
53%
63%
65%
Source:Roland Berger; Markenverband
PLANNING
TOOLS
CHANNEL
SHOPPER/CONSUMER
CUSTOMER Designing and evaluating retail-related customer analyses
Developing and evaluating insights and anchoring the knowledge of consumers/ shoppers
Developing channel-specific know-how and deriving retail strategies/tactics from it
Developing tools, guidelines, manuals, etc.
Integrated planning of channel, shopper, category and customer objectives
Commercial planning and shopper insights are key challenges
Trade Marketing – Challenges [%]
3
Role of the function Responsibility/competence Systems/personnel
Clear role definitionas link between division, country,
Putting together the commercial plan
Improved use of tools/
318
5011
46 2815 1150 22 1117
392010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptxSource:Roland Berger; Markenverband
as link between division, country, customer and brand
commercial plan tools/IT systems
Anchoring and introducing the function
High level of planning precision
Developing shopper insights
Reducing the no. of promotions (fewer, bigger, better)
Establishing overarchingcareer paths
31
29
28
41
28
17
15
11
8
5011
11
28
50
30
46
37
28
30 1320
15 11
Essential Important Less important No response
50
37
22
22
11
13
17
28
402010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
4 Contacts
Don't hesitate to contact us if you have any questions
Contacts
PATRICK MANNSPERGER ANDREAS GAYK
Roland Berger Strategy ConsultantsPartner
MarkenverbandHead of Sales Policy/Retail
E-mail: E-mail:
412010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptxSource:Roland Berger; Markenverband
E-mail:[email protected].: +49 89 9230-8798Mobile: +49 160 744-8798
E-mail:[email protected]. : +49 30 206 168 30
MARIA CONZELMANN MARIA FÜRNHAMMER
Roland Berger Strategy ConsultantsProject Manager
Roland Berger Strategy ConsultantsSenior Consultant
E-mail:[email protected].: +49 89 9230-8590Mobile: +49 160 744-8590
E-mail:[email protected]. : +49 89 9230-8488Mobile: +49 160 744-8488
2010-11-17_Markenverband-RB_Vertriebsstudie_Ergebnisse_E.pptx
Shaping the future –SALES 2015