20 steps implementation guide 2020

The 20 Steps Model provides a methodology for developing a route-to-market strategy. It consists of 4 phases - Assessment, Strategy, Design, and Implementation. The Assessment phase involves reviewing the current RtM performance, portfolio analysis, consumer behavior, distributor assessment, and competitors. The Strategy phase develops an overall RtM strategy and 4D approach linked to commercial goals. The Design phase includes designing sales territories, RtM structure, data and metrics, sales incentive programs, and trade toolkits. The Implementation phase focuses on executing the new approach through distributor partnerships, third party partnerships, training, and continuous improvement.

The 20 Steps Model Examples of Use

Case Studies

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Route to Market Strategy (or Trade Marketing & Distribution

Strategy, or Sales Execution Strategy or whatever name is

used), provides a roadmap to get your products, from your

factory, plant or warehouse to your customers, distributors

and/or end-users, in the most efficient and effective

manner, with the aim of growing sales while satisfying

customers.

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The 20 Steps to Route to Market Excellence model is a

methodology or framework to allow FMCG leaders, to

review, transform or build their RtM capability in a

structured manner, covering all elements of the RtM

strategy.

The 20 Steps are split into 4 phases, Assessment,

Strategy, Design and Implementation.

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RtM Strategy can be looked at, developed, reviewed or built

at different levels which is up to the individual

The Steps & Phases are less important than the CONTENT

The goal of the methodology is to make sure we cover all

areas.

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Levels & Application

Review and understand every element of your current RtM set up

Review your ‘current’ 20 steps across your RtM– what ever is present

In the absence of ‘hard facts’ – we use best commercial estimates

Include the performance of current and available distributors, field force, back

office, sales management, operations, CRM, etc.

Review RtM operations of competitors & best in class non-competing

companies

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Phase 1 - Assessment

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3

4

Review Current RtM Performance – Strategy, the Existing

20 Steps that are present, SWOT, Work Practices, Metrics, Portfolio Analysis (Pricing & SKU Segmentation) & effect

on RtM, advanced RtM Data Analytics, etc.

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Phase 1 - Assessment

Consumer & Market Mapping – Consumer Behaviour &

Trends, Specify Geographic Realities, Trade Landscape, Point of Sale (Direct/Indirect), Key Battlegrounds, Must Wins.

Distributor Assessment (Direct/Indirect/3rd Parties) – Visit Client Distributors, Access Current Distributors

Competitor Analysis – Competitive, Non-Competitive, Best

Distributor Performance Assessment (Quantitative

& Qualitative) vs Best in Class

Competitors – Model of Competitor RtM, Competitor Portfolio and Best in Class RtM Models Market Map – Current Consumer Behaviour & Geographic Nuances, Outlets by Channel and Coverage Map (Direct & Indirect)

Based on the extensive review in Steps 1 to 4

Mapped the entire marketplace, the total number of POS Understand customer trends & needs, detailed reality of our marketplace, Assessed current/potential distribution models, analysed the competition

Looking strategically across the 20 steps

Working closely with your cross functional and interdepartmental teams

Map out your customised RtM Strategy and approach to deliver your strategic

goals.

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Phase 2 - Strategy

5 Overall Approach to RtM linked to commercial goals

Detail what success looks like Define the DIME Approach (Direct, Indirect, Mix &

Everything in between) – See example later Define requirements across 4D’s (Distribution, Display, Dialogue, Digital)

Link them to the organisation goals Strategy Map to Define Dependencies & Ensure Organisation Buy-in

RtM Strategy & the 4D Approach

Phase 3 focus is to design the specific steps that deliver the RtM strategy

This includes classifying each point of sale/outlet against chosen criteria

Segmenting these into channels, building sales territories, designing RtM structure The right data and metrics, Sales Incentive Programme to support RtM goals

Sales force need to be equipped with the required toolkit

A Trade Incentive Programme to partner with your customers

All supported by the right technology & Digital RtM integration

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Phase 3 - Design

Data & Metrics – Define Current Capability, New Data Requirements, Revenue Management Model, KPIs, Reporting, etc.

Structure – Defined Field Force – Type, Numbers, Structure Cost to Serve Model

Data & Metrics –Roadmap including Requirements, Capture & Systems, New KPIs, Defined Qualitative & Quantitative Reporting

Phase 3 - Design

11 Sales Incentive Programme (SIP) – Successes, NewTargets including Volume, Brand Distribution, Point of

Sales, Visits, etc.

SIP – New Sales Incentive Programme & Training Plan

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Trade Tool Kit – New Trade Tool Kit, Tool Kit Processes, Agreed Approach & Training Plan

TIPs – New Trade Incentive Programme & Training Plan

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Trade Tool Kit – Outlet Execution & Activation, Define Must Haves, e.g Order Capture, Order Method, POS Material Placement & Management, Planograms, Portfolio and Pricing Process & Initiatives, Trade Incentives &

Promotions, Trade Engagement Options, etc.

Technology – Digital RtM Roadmap & Plan

Phase 4 focus is on implementation Depending on the strategy chosen either

pilot, scenario plan or implement the new approach with your teams.

This includes implementing the Distributor Partnership Programme

Effective Third Degree Partnerships (3DPs) Researched & Implimented

A Key Account Management (KAM) Department & Approach

A programme of Training & Upgrading, Functional Integration with all departments Supportive Culture & Leadership, Ensuring Continuous Improvement

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Phase 4 - Implementation

Phase 4 - Implementation

15 Distributor Partnership Programme – Develop ModelDistributor, Strategy, Approach, Development Plan &

Execution for each Distributor

Distributors – Define & Agreed Model, Development Plans, New Contracts & SLAs, New Performance System, Transition Plans

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Training & Upgrading – Rollout Training across all steps.

Include ‘Steps of the Call’, ongoing Training Programme.

Roll out New RtM Development (NRD) approach to ensure Continuous Improvement

Training – Programme, Workshops, the-Trainer, On-The-Job Coaching

New RtM Development (NRD) - The Continuous Improvement Programme (Covering 20 Steps), How to Capture & Spread Success

Functional Integration – New Functional Interfaces Embedded, Sales & Operational Planning (S&OP) and RtM Integrated

Culture & Leadership – Develop & Execute Supporting Change Management Plan Develop & Execute Clear Messaging Develop Cross-Functional Buy-In & Support

NEXT STEP Continuous Improvement –Monitor 20 Steps effectiveness, review the approach and ensure continuous improvement

Culture & Leadership – Change Management Plan, Workshops to Support Plan

Continuous Improvement – Follow Up Plan

to ensure sustainability and continuous improvement

The 20 Steps model provides great flexibility

Depending on your specific need

You may need a full Route to Market Transformation Covering all 20 Steps, or

You may require a focused interaction (e.g on Distribution)

You must identify those needs & tailor any program.

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Flexibility

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Distributor or Distribution Assessment is Step 3 the model It consists of:

Macro - what is available in the market and, Micro - the current or potential performance of each option

Some key advice here is not to assess one without assessing the other

Best practice is to complete Macro first and then Micro

To do this, we use our DIME Approach (Direct, Indirect, Mix & Everything in

between)

Direct Distribution is where you distribute your own products and explicitly

control each element of the distribution network In assessing direct

distribution options, you need to evaluate all the potential direct options in

the marketplace, rank them based on a specific criteria, and then perform

detailed assessments on the top ranked options

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Step 3 - Distributor Assessment

Indirect Distribution is where you utilise you own customers to pass your products

through the supply chain This can take many forms but is usually FMCG company

to distributor(s), potentially on to wholesalers, cash and carry’s, and then on to outlet

level, including retail and Horeca In assessing indirect distribution you need to:

Firstly, map out all of the potential first line distributors, including their national

or regional coverage map then, Rank them based on specific criteria, Finally, perform detailed assessments on the top ranked options

Feel free to gain inspiration from our Distributor Assessment Guide and Distributor Assessment Tool available for download.

Mix is where we use a combination of direct and indirect distribution For example,

you may directly distribute to the top 4 cities in your market as they account for 60%

of the volume and you may use distributors for the rest of the market In assessing

mixed distribution, you need to map the potential options for each mix element, rank

them based on set criteria, and then perform more detailed assessments on the top

options.

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Step 3 - Distributor Assessment

Everything in between is essentially a stand back, stop and pause moment This is

where so-called blue-sky, left-field, total market disruption ideas come in It is where

we try to model the new and emerging trends distribution options to see where they

will fit into the new normal and how we can capitalise and gain competitive

advantage.

We have provided a list of questions you can ask under each DIME element,

designed to kick start the process on how to protect your distribution options in this

new normal.

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Step 3 - Distributor Assessment

Enchange has pioneered a Route to Market programme (RtM) that delivers

maximum distributor performance without the cost ofmaintaining own

direct distribution

It is particularly suitable for Producers who use a multi-distributor model in

markets with a high degree of ‘traditional’ non key account trade

Enchange has a suite of RtM tools to measure distributor performance &

distributor compliance to producer standards

It always delivers a sales uplift (15%+) & improved customer service for

Step 3 - Distributor Assessment

Measure current performance vs international best practice, use Enchange toolset

Visit to Distributor HQ (Discussion/Evaluation with Senior & Ops Management, Rep Trade visits, etc.)

Analysis of Distributor Data Assessment of Distributor using Enchange Distributor Assessment Tool Tools adapted for each client & measure up to 10 categories including:

Performance bands – we generally measure 3 levels of performance

GOLD (LEADING EDGE) SILVER (INTERMEDIATE) BRONZE (BASIC)

Strategy Relationship Demand Management

Inventory Management Warehousing Sales & Ops Management

HR & Organisation

Finance, Plan & Budgeting

IT/ Information Performance

The analysis & distributor categorisation provides invaluable data to target implementation effort

It will identify high potential distributors where a significant sales uplift is achievable

It will also identify High performing distributors where market share protection is critical

Step 3 - Distributor Assessment

In this region the priority was Distributor D (high potential - large territory, low m/s), &

Distributor E

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Distributor A (protect high sales & m/s)

As an example, in one region only, if all distributors achieved the

national average market share, the increase in volume would

deliver a bottom line impact of €1.3m.

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Our client had a multi-distributor model with a mix of good & poorly performing distributors The localmarket had experienced decline in the previous 2 years with all major international players present.

An RTM programme established new international

benchmarks for distributor performance & measured all

distributors against the benchmark

The results identified specific targeted sales-led initiatives

with distributors & drove a distributor development

programme in time for the new high season

Distribution network optimised with mix of distributor exits,

territory extensions & new distributor contracts

Bottom line impact > €11m pa

First season – sales & market share increased at expense of

2 other key players (in declining market)

Results

New channels were mapped for the FMCG Co.

Existing distributor refocussed on single channel

New distributor engaged, terms were negotiated and contracts agreed

Initial Financial Results:

Year 1 Cost to Serve savings of €840,000 p.a agreed Year 2 Cost to Serve savingsof an additional €400,000 p.a identifiedResults - WIP

Importation Model

Channel analysis to understand current Cost to

Serve structure versus competition and market

If you need any help or guidance, please contact usand we would be delighted to discuss your issues orprovide you with more information.

www.enchange.com/contact-us

+44 (0)1403 275576improve@enchange.com

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Read our blog series by Ross Marie on each

step of the 20 Steps Methodology

Learn more about Enchange and see how

we can help you to transform your Route to

Market

FURTHER READING