Video
An ongoing challenge for consumer products makers in both developed and emerging markets is knowing how to get the right products in the right stores and improve sales execution. The importance of this issue was confirmed in Bain’s recent survey of 120 consumer products executives—90% of the executives ranked in-store execution as one of their top five business priorities. In our continuing series of conversations with consumer products leaders, Bain Partners Giovanni Arnese, Marcello Tripodo and Louis Lim discussed this topic with senior executives from Kraft and Heineken. Both companies have boosted in-store sales in emerging markets, where the dominance of small mom and pop retailers makes sales execution even more challenging, but essential.
Bain: We view in-store execution as a key growth lever for consumer product companies. In this video, we sat down with executives from global consumer product companies to discuss their experience in sales execution in emerging markets.
What led you to focus on sales execution?
Nico Nusmeier, regional president for Central and Eastern Europe at Heineken: The sales execution program at Heineken, which is called “The Extra Mile” and which we designed here in Central and Eastern Europe, has been set up precisely to focus on sales execution. We wanted to make sure that what our sales reps do at the point of sale is well linked to our company’s strategy.
Kostas Vlachos, managing director at Kraft Foods Turkey: We started the program about a year ago--after the acquisition of Cadbury--when we were faced with the challenge of matching the category. Having three impulse categories at the same time makes it more and more important to look at what you’re doing actually in the store and how much effort and attention you are putting into the presence of those stores, as well as into the visibility of the product.
Heineken’s Nusmeier: Seeing the difference between what you think of on paper in terms of your marketing and your general strategy, and then going into the field and discovering that your sales guys are executing something else led us to think, How can we change that? You really want to measure what they’re doing because what you cannot measure, you cannot control. What you cannot control, you cannot target. And what you cannot target cannot be a real part of your strategy.
Bain: Describe the program’s cornerstone concept.
Kraft’s Vlachos: The most powerful concept is a change in mentality. You enter the store, and you’re not thinking anymore about today’s sales. Instead, you’re thinking about what you will do today in order to create sales tomorrow.
Heineken’s Nusmeier: One of the key elements is that we give our sales reps a focus, a limited set of activities—anywhere from three to five activities that people should execute in their stores. The second key element of the program is measurement of the results that we want to focus on. The combination of focus, measurement and continuous feedback of results is the key element for any successful sales execution program, in my view.
Bain: What sort of results have you seen?
Kraft’s Vlachos: We started with a gum category a few months ago, and in seven stores where we are tracking like-for-like sales, we have seen up to 10% volume upside.
There’s another side of this success, which has less to do with measurement. I see every day, more and more, our sales team being happier, being more motivated with what they are doing, and having simpler, but at the same time, more successful lives. So it is about sales development, but it’s also about people’s satisfaction with what they are doing.
Heineken’s Nusmeier: In my perspective, sales execution is the most important element of a comprehensive marketing and sales strategy for consumer products. That is because, at the end of the day, the battle is won at the point of sale. What we like about this program is obviously the results. We see the results in terms of market share. We see the results in terms of distribution. We see the results in terms of rotation. Of course, it’s a multiyear commitment to do something like this—and I’m talking about continuous improvement. That means continuous improvement over a number of years, and actually, in principle, sales execution never ends so this is a system which can be used for eternity.
First published in Oktober 2011