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Distribution systems of FMCG companiesThe influence of the crisis |
In summer 2009, Deloitte CIS surveyed the consumer products market and analyzed how the crisis had affected the distribution systems of FMCG companies.
The survey was of a qualitative nature, mainly consisting of interviews with leading global manufacturers of food, alcohol, cosmetics and household cleaning products. During the interviews, participants discussed the changes in corporate distribution systems amid the crisis, which primarily affected the following areas:
- Basic distribution architecture
- Commercial terms for distributors
- Geographical breakdown of distribution
- Interaction with Key Accounts
- Organization of sales function
If you would like to review the survey’s key findings and our commentary, please e-mail us.
Deloitte services for FMCG companies in distribution system development
The economic downturn significantly affected the distribution systems of FMCG companies. Erosion of purchasing power, changes in consumer preferences, distributors in a weak financial position, overdue payments from key clients, difficulties in accessing external financing – this is only a short list of the issues that FMCG producers currently face. Changes such as these often require companies to review their route-to-market (RTM) distribution strategies. As a result, a constantly growing number of companies are in search of answers to the following questions:
- What is the potential of different regional markets?
- What is the optimal number of partners/distributors? What is their role?
- How to service Key Accounts most efficiently?
- What is the optimal structure of KPIs and partners’ fees?
- Is the proposal attractive enough for partners?
- What is essential for securing the stability of the distribution system and material flows?
- Is it necessary to review policies for distributors, wholesalers and Key Accounts?
- What is the optimal number of sales representatives? Should we change the organizational structure of the sales function?
- What is the optimal logistics scheme?
Our approach provides you with a system concept when searching for answers to these and other distribution system-related questions. We’d be glad to discuss the challenges your company faces when developing its distribution system. You can send us a request for providing professional services in this field.
