Part 3 · FMCG trade practice · Chapter 3.9
What brands measure
Draft: the wording may change.
The idea
A brand cannot visit every shop, so it watches a few numbers that show how well its products reach the market. Most of them can be counted from the stockist's own bills. A stockist who knows these numbers, and works them out before the SO does, is talking the company's language.
The numbers
| Number | Question it answers | How to count it |
|---|---|---|
| Numeric distribution (ND) | In how many shops is the product available? | Shops that stock it ÷ all shops that sell the category |
| Weighted distribution (WD) | Are those the shops that matter? | Category sales of shops that stock it ÷ category sales of all shops |
| Outlets billed | How many shops bought from us this month? | Count of different retailers with at least one bill |
| Productive calls | Of the shops visited, how many gave an order? | Bills ÷ shops visited |
| Lines per call (LPC) | How many different products does each bill carry? | Total product lines on bills ÷ number of bills |
| Fill rate | Did we deliver what was ordered? | Quantity delivered ÷ quantity ordered |
Numeric and weighted distribution need data on all shops, including the ones you do not serve. Big brands buy this from research agencies. The other four you can count yourself, from bills and the beat plan (chapter 3.18).
Numeric and weighted, side by side
A town has 100 shops that sell detergent. Our brand's 1 kg pack is in 40 of them. ND = 40%.
Those 40 shops include the big ones near the bus stand and the market. Together they sell 70% of all detergent in the town. WD = 70%.
When WD is much higher than ND, the brand is in the big shops and missing the small ones — the next salesman should open small outlets. When ND is higher than WD, the brand is in many small shops and missing the big ones — the SO should chase the few big counters.
At the counter: one DSR, one month
Beat plan for Murugan, the DSR on the north-side beats: 6 beats, 180 shops, each shop visited once a week.
| October | |
|---|---|
| Shops on his beats | 180 |
| Shop visits made (about 4 per shop) | 700 |
| Bills raised | 420 |
| Different shops billed | 132 |
| Product lines on all bills | 2,940 |
| Cases ordered | 610 |
| Cases delivered | 562 |
From these:
- Outlets billed = 132 of 180. 48 shops on his beat bought nothing all month. That list is worth more than any other report.
- Productive calls = 420 ÷ 700 = 60%.
- Lines per call = 2,940 ÷ 420 = 7. Each bill carries 7 different products on average.
- Fill rate = 562 ÷ 610 = 92%. 48 cases ordered were not delivered — probably out of stock in the godown.
Each number points to a different fix. Low outlets billed: visit the 48 shops. Low lines per call: the DSR is selling only the fast items; teach him to offer two more lines per shop. Low fill rate: the godown is short; the primary order is too small or too late (chapter 3.11).
Fill rate works at two places
The company measures its fill rate to the stockist: did the 300 cases ordered arrive? The stockist measures his fill rate to retailers. If the company's fill rate is low, yours will be low too, and the retailer will buy that product from someone else. Keep a note of every short supply from the company — it is your answer when the SO asks why secondary fell.
Common mistake
Counting outlets billed by bills, not by shops. Ravi Stores billed four times is still one outlet. A report that adds up bills and calls it "outlets" makes coverage look three or four times better than it is, and hides the 48 shops nobody is selling to.
Where you'll use this
Chapter 3.16 builds salesman incentives on outlets billed and lines per call. Chapter 3.18 shows the beat plan these numbers come from. In Part 4, these are the daily reports — counted straight from the bills, with the list of unbilled shops one tap away.
Check yourself
- A product is in 30 of 120 grocery shops in a town. What is its numeric distribution?
- 250 bills carry 1,500 product lines. What is lines per call?
- Ravi Stores is billed four times in a month. How many outlets billed does that add?
Answers
- 30 ÷ 120 = 25%.
- 1,500 ÷ 250 = 6.
- One.