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FMCG lessons for the newspaper industry

By Sumantha Rathore , afaqs!, Jaipur | In Media Publishing | April 18, 2011
Hemant Malik, chief operating officer, trade marketing and distribution, ITC, spoke about the learning parametres of the FMCG sector that newspapers can use.

INMA (International Newsmedia Marketing Association) hosted its first ever Circulation Growth Seminar, a one-day event for South Asian newspapers, under the theme 'Circulation 3Gs: Growth, Growth and Growth'. The seminar was held on April 15, at Hotel Clarks Amer, in Jaipur. Its mission was to bring together the best practices and strategies that will sustain the growth of circulation among newspapers in India, Pakistan, Bangladesh and Sri Lanka.

Hemant Malik, chief operating officer, trade marketing and distribution, ITC, spoke on 'A leader in the FMCG Sector'. His presentation dealt with ITC's expertise and challenges in distribution, segmentation, promotion, training methods and other experiences to spark off innovative ideas for the newspaper business.

Malik shared glimpses from ITC's FMCG journey which started some 10 years ago and since then, has shown exemplary growth. He said that the entire FMCG business of ITC, be it personal care, cigarettes, safety matches, agarbatti, or food and lifestyle products, has a common grounding - a common sales and distribution. With the passage of time, as well as diversification of the business, it has only expanded. The total FMCG business is estimated at about Rs 1,40,000 crore.

In today's environment, with growing organised retail and changing lifestyles, tremendous media exposure, growing acceptance of branded products, and the increasing role of social networking, the use of technology is very important, while reaching out to the dealers.

Talking about the transformation of ITC's FMCG business, he cited an example. He said that while the group dealt with only one category in 2001, in 2010, it has 15 categories under its belt. Also, while the number of channels employed then was only two, the group today, has seven direct and passive channels of distribution.

The direct channels of ITC make about 60 per cent of the business for the FMCG division of the group. The group has its presence in about 2 million retail outlets across the country today, more than double that of the figure in 2001.

He said that the company puts in a lot of effort in trade and marketing to sustain its growth trajectory. In order to manage multiple categories and brands and to combat competition, it is vital to ensure that the right product is available in the right market and at the right outlet, in the right quantity, at the right time, and with the right visibility.

"Availability, visibility and freshness are the key drivers in selling the fast moving products," Malik said. The company has 26,000 salesmen to ensure this.

While reaching out to the grocery stores, which are plenty in number, he said that it is important to tap those stores first which generate the maximum business - stores with less footfalls can be dealt with later. The ideal situation should be to tap 40 per cent stores in a market, which would account for 80 per cent of the business.

Another medium to watch out for is modern trade, which as of now, contributes only 6 per cent of the revenue, but is growing at a fast pace. Malik stressed that there is a need to enhance sales infrastructure productivity by maximising service efficiency in order to capture superior value customers.

He also stressed on the importance of product knowledge and sales training and said that of the two, product knowledge training is the most important aspect. Also, measuring distributors' performance at regular intervals is vital for better results as 70 per cent of the sales conversions actually happen at retailers' recommendations.

"And, a retailer would only talk about your product if he sees value in it and can connect with the brand emotionally," Malik concluded.

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