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 ModelExamples of Use

Case Studies

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Route to Market Strategy (or Trade Marketing & DistributionStrategy, or Sales Execution Strategy or whatever name isused), provides a roadmap to get your products, from yourfactory, plant or warehouse to your customers, distributorsand/or end-users, in the most efficient and effectivemanner, with the aim of growing sales while satisfyingcustomers.

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The 20 Steps to Route to Market Excellence model is amethodology or framework to allow FMCG leaders, toreview, transform or build their RtM capability in astructured manner, covering all elements of the RtMstrategy.

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 builtat different levels which is up to the individual

RtM Strategy can be at

the market cluster levelthe country level

the city, town or territory level

Regardless, the base principals are the same.

The Steps & Phases are less important than the CONTENT

The goal of the methodology is to make sure we cover allareas.

Levels & Application

Review and understand every element of your current RtM set up

Review your ‘current’ 20 steps across your RtM– what ever is presentIn the absence of ‘hard facts’ – we use best commercial estimates

Include the performance of current and available distributors, field force, backoffice, sales management, operations, CRM, etc.

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

Phase 1 - Assessment

Review Current RtM Performance – Strategy, the Existing20 Steps that are present, SWOT, Work Practices, Metrics,Portfolio Analysis (Pricing & SKU Segmentation) & effecton RtM, advanced RtM Data Analytics, etc.

Distributor Performance Assessment (Quantitative& Qualitative) vs Best in Class

Competitors – Model of Competitor RtM,Competitor Portfolio and Best in Class RtM ModelsMarket Map – Current Consumer Behaviour &Geographic Nuances, Outlets by Channel andCoverage 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 strategicgoals.

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 & EnsureOrganisation Buy-in

RtM Strategy & the 4D Approach

Phase 3 focus is to design the specific steps that deliver the RtM strategyThis includes classifying each point of sale/outlet against chosen criteria

Segmenting these into channels, building sales territories, designing RtM structureThe 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 customersAll supported by the right technology & Digital RtM integration

Phase 3 - Design

Territory Planning – Geography, Link to MarketMapping, Trade Coverage, FTE

RtM Structure – Define Field Force & Back Office –Distribution, Merchandising, Promotions, Telemarketing,Customer Services, Events, Trade Marketing, HoReCa, etc.

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

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

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

TIPs – New Trade Incentive Programme &Training Plan

Trade Tool Kit – Outlet Execution & Activation, Define MustHaves, e.g Order Capture, Order Method, POS MaterialPlacement & Management, Planograms, Portfolio andPricing Process & Initiatives, Trade Incentives &Promotions, Trade Engagement Options, etc.

Trade Incentive Programme (TIPs) – Review Successes,Develop Options

Technology –RtM Digital Integration Roadmap, DefineTechnology Requirements for CRM, Hand Helds, OrderCapture, Trade Marketing, Trade Data capture, TradeCensus Management, Track customer compliance to terms,Planogram Compliance, RtM Data Analytics, etc.

Technology – Digital RtM Roadmap & Plan

Phase 4 focus is on implementation Depending on the strategy chosen eitherpilot,

scenario plan or

implement the new approach with your teams.

This includes implementing the Distributor Partnership Programme

Effective Third Degree Partnerships (3DPs) Researched & ImplimentedA Key Account Management (KAM) Department & Approach

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

Phase 4 - Implementation

16 Third Degree Partnerships (3DPs) – based on currentDistributor needs & issues, identify 3DPs and implement

17 Key Account Management (KAM) – Define KAM Needs,Relationship Management & Negotiation, Trading terms

Phase 4 - Implementation

Functional Integration – Map Out & Execute RtM links toother Functions, especially Marketing (Portfolio, Pricing,SKUs, POS) & Supply Chain (Sales Forecasting/InventoryManagement/Out of Stocks Prevention) Also includeFinance, Operations, IT & HR Integrate new RtM with S&OP

Training & Upgrading – Rollout Training across all steps.Include ‘Steps of the Call’, ongoing Training Programme.Roll out New RtM Development (NRD) approach to ensureContinuous Improvement

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

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

Functional Integration – New FunctionalInterfaces Embedded, Sales & OperationalPlanning (S&OP) and RtM Integrated

Culture & Leadership – Develop & Execute SupportingChange Management Plan Develop & Execute ClearMessaging Develop Cross-Functional Buy-In & Support

NEXT STEP Continuous Improvement –Monitor 20 Stepseffectiveness, review the approach and ensure continuousimprovement

Culture & Leadership – ChangeManagement Plan, Workshops to SupportPlan

Continuous Improvement – Follow Up Planto ensure sustainability and continuousimprovement

The 20 Steps model provides great flexibility Depending on your specific need

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

You may require a focused interaction (e.g onDistribution)

You must identify those needs & tailor any program.

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 inbetween).

Direct Distribution is where you distribute your own products and explicitlycontrol each element of the distribution network In assessing directdistribution options, you need to evaluate all the potential direct options inthe marketplace, rank them based on a specific criteria, and then performdetailed assessments on the top ranked options.

Step 3 - Distributor Assessment

Indirect Distribution is where you utilise you own customers to pass your productsthrough the supply chain This can take many forms but is usually FMCG companyto distributor(s), potentially on to wholesalers, cash and carry’s, and then on to outletlevel, including retail and Horeca In assessing indirect distribution you need to:

Firstly, map out all of the potential first line distributors, including their nationalor 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 andDistributor 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 assessingmixed distribution, you need to map the potential options for each mix element, rankthem based on set criteria, and then perform more detailed assessments on the topoptions.

Step 3 - Distributor Assessment

Everything in between is essentially a stand back, stop and pause moment This iswhere so-called blue-sky, left-field, total market disruption ideas come in It is wherewe try to model the new and emerging trends distribution options to see where theywill fit into the new normal and how we can capitalise and gain competitiveadvantage.

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 thisnew normal.

Step 3 - Distributor Assessment

Enchange has pioneered a Route to Market programme (RtM) that deliversmaximum distributor performance without the cost ofmaintaining owndirect distribution.

It is particularly suitable for Producers who use a multi-distributor model inmarkets 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 forproducers.

The Process:

Step 3 - Distributor Assessment

Step 3 - Distributor Assessment

Measure current performance vs international best practice, use Enchange toolsetVisit to Distributor HQ (Discussion/Evaluation with Senior & Ops Management,Rep Trade visits, etc.)

Analysis of Distributor Data

Assessment of Distributor using Enchange Distributor Assessment ToolTools adapted for each client & measure up to 10 categories including:

Performance bands – we generally measure 3 levels of performanceGOLD (LEADING EDGE)

SILVER (INTERMEDIATE)BRONZE (BASIC)

StrategyRelationshipDemand Management

Inventory ManagementWarehousingSales & Ops ManagementHR & Organisation

Finance, Plan & Budgeting

IT/ InformationPerformance

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

Distributor A (protect high sales & m/s)As an example, in one region only, if all distributors achieved thenational average market share, the increase in volume woulddeliver 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 internationalbenchmarks for distributor performance & measured alldistributors against the benchmark.

The results identified specific targeted sales-led initiativeswith distributors & drove a distributor developmentprogramme 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 of2 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 toServe structure versus competition and marketnorms.

New distributor options identified.Negotiations Undertaken

FMCG Multinational

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

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