Marketing Mix – 8 Ps

Marketing Mix – 8 Ps:

1. Product
2. Price
3. Promotion
4. Place
5. People
6. Process
7. Physical evidence
8. Productivity

1. Product
The core of any marketing effort, the product must be something customers desire. The best marketing in the world will have difficulty selling a product for which their is no demand. Therefore, the marketing manager must understand how the product helps the customer solve a problem or achieve a goal. The marketer must also understand the product's relationship in the market -- how is it superior to the competition? One of the most helpful tools available at this stage is product testing. There are different types of product testing, as you can see. Placing a product into the hands of the customer allows you to gain insights unavailable any other way. What does the customer believe the product will do for them? How do they see your product in relation to the competition? Remember that "the customer is always right" -- what they believe is what they will use to choose what to buy -- and it's easy to understand how this information is more valuable than anything said in a meeting or boardroom.

2. Price
Contrary to popular opinion, price is not the main reason customers buy. An inappropriate price can still cost you a great deal of money, though -- whether it's in lost sales or in "money left on the table." Therefore, check that prices of products and services are appropriate both to the reality of the market and the cost of delivering them. Often, changing terms of sale or combining products together may create a negligible effect on the cost while creating a tremendous effect on the perceived value. These "extra bonuses" may cost next to nothing while making your prices instantly far more attractive.

3. Promotion
Promotion is the heart of what most people think of as "marketing." Promotion encompasses every aspect of packaging, advertising, sales methodology, and salespeople. Promotions may use small items such as these or contests to induce the customer to engage with the brand or the product. Small changes to promotion may produce dramatic changes in your profits. A tiny tweak to your advertising, for example, can easily double your sales. As you work, keep in mind that no marketing works forever. Stay prepared to develop new approaches, strategies, and offers on an ongoing basis in order to keep ahead of the market's changing tastes.

4. Place
Where the customer meets the salesperson is the "place." Direct sales methods put the place in the customer's home or office, with a salesperson personally going out to talk with the prospect. (Mail order and catalogue marketers replace the salesperson with printed matter.) Other companies use retail establishments or trade shows as their "place." In many instances you'll find that a combination of these methods produces the best results. Now, let's look at the "New Four Ps," which extend this model to service-based businesses and a customer-service oriented world.

5. People
Selecting, recruiting, hiring, and retaining the people who will do the job that needs to be done is among the most important parts of business.

6. Process
As tempting as it is to think of process in terms of your needs, to marketers process is in fact what your customers experience. The process issues that are most annoying for a customer are the process elements which put the provider's convenience ahead of the customer's. Therefore, design your process to maximise the customer's enjoyment throughout.

7. Physical evidence
All the visible and tangible traces of your business that a customer encounters prior to buying are the physical evidence. Advertising, signage, your reception area, your corporate brochure, even staff clothing are part of the physical evidence of your business. Use physical evidence to stand out from the competition and create a strong brand image.

8. Productivity
As with process, this is less about your internal productivity than your ability to deliver to your customers. Productivity in this regard is always combined with quality - you supply the best quality every time.

Collected from Internet

Traditional FMCG Distribution System in Bangladesh

Traditional FMCG Distribution System in Bangladesh:

The goal of every manufacturer/importer is to make their products available to the end customers. In doing so, companies need to engage intermediaries to make sure that products are traveling from the point of origin to the hands of customers.

Traditionally in our country these intermediaries broadly falls into two categories:

a.  General Trade

b.  Modern Trade

General Trade:

This channel includes distributors, wholesalers, and retailers. They are the independent business entities who buy products from companies with a purpose to sell to their customers at a profit.

Retailers and wholesalers are managed by distributors under the guidance of Territory Managers. Distributors are appointed by companies by a sales agreement. They have their own capital, human resources, and logistics to run the business operations. Distributors buy products from manufacturers at “Dealer/Distributor Price” and sell to retailers/wholesalers at “Trade Price”. The difference between these two prices is the source of distributor’s earning. Distributors are managed by Territory Managers who are employed by the manufacturers.

How products reach at retail outlet?

In FMCG distribution system, sales order is taken from retailers a day prior to product delivery. Distributor’s Sales Representative (DSR) visits retail outlets and collects sales orders from them. The next day a delivery unit (deliveryman + driver) makes sure the delivery of the products to all the outlets from where sales orders were taken by DSR and collects “payments” against each successful delivery.

Day-1: DSR Collects Sales Order from Retail Outlets

Day-2: Delivery Unit Ensures Product Delivery to Retail Outlets and Collects Payment

Companies sell to distributors at dealer price, distributors sell to retailers at trade price, and finally retailers sell to customers at MRP. Companies time to time offer trade promotions to encourage distributors and retailers to buy more of company’s products. It is assumed that retailers will sell to their customers at MRP but sometimes retailers sell at a discounted price (below MRP) to attract more customers on which companies do not have any control. Generally, dealer price remains same for all the dealers/distributors and at the same way trade price also remains same for all the retailers.

Note: Companies may have their own Sales Officers (instead of DSR) to collect sales orders from outlets. In such cases, distributors are only liable to make sure the delivery of the products in exchange of payments.

Modern Trade:

Modern Trade consists of the super shops like Agora, Swapna, Meena Bazar, etc. who buy products directly from companies (some exceptions are there e.g. some companies deliver products from distributors) and directly sell to customers. Modern trades are the retailers in the eye of manufacturers. Some companies manage modern trade channel directly whereas some other manage them by distributors. There are some dedicated Territory Managers who look after this channel based on geographical demarcation. The entire modern trade channel is supervised by a dedicated Key Account Manager.

Companies make sales agreement with each super shop and fix a trade price at which super shops buy products from them. Generally, different trade prices are set for different super shops e.g. the same product may have different trade price for different super shops. Generally super shops buy product from companies on credit and sell to customers at MRP.

In “general trade” Companies mostly offer promotions for the traders (retailers) whereas in modern trade Companies offer promotions for the customers. This promotion may be in the form of discount or kinds (kinds mean giving a product free with the purchase of another product or same product). Whatever is the promotional form e.g. cash or kind, the manufactures need to pay for it to the super shops based of promotional sales quantity made by that respective super shops. Without promotional offer, super shops at their own normally do not sell any product at lower price than MRP which general traders (retailers) do.

In modern trade it is very much common to showcase products in Gondolas for which Companies have to pay monthly rentals in favor of the super shops which is a major source of earning for them.

Common terminologies used in Trade Marketing

Common terminologies used in Trade Marketing:

Before going to ‘Common Terminologies’ I would like to describe something about Trade Marketing.

Trade marketing can be defined as the discipline of marketing/sales that relates to increasing the demand for company’s brands/products at retailer, wholesaler, or distributor level and ensures the brand bondage so that the channel/supply chain partners advocate for the products to the customers and influence the buying decision of buyers in a competitive scenario.

Normally, a company’s sales has three wings – 1. General Trade (GT), 2. Modern Trade (MT), and 3. Alternate or B2B. Trade marketing especially deals with GT and MT.

Sales Chain Partner: This is also termed as Supply Chain Partner or Channel Partners who play a vital role to reach products from manufacturer to customer. They include retailer, wholesaler, and distributor.

In some organizations Trade Marketing is also called B2B marketing or business-to-business marketing because all the promotional activities are aimed at increasing the demand for the products among the various supply chain partners.

The main objective of Trade Marketing is to ensure the consistent supply and availability of the product to the end consumer through different trade promotions. Incentives are given to the intermediaries for effective promotion of the product at their end.

Various forms of trade promotion include activities such as – cash discount, free product, purchase scheme, display of the product, branded merchandise, more shelf space, and even word of mouth.

Common Trade Marketing Terminologies:

Retailer: The businessmen who normally operate a shop/retail outlet who buy products from distributor/wholesaler and sell to customers at a profit.

Wholesaler: The businessmen who normally operate a shop/retail outlet who buy products in bulk quantity from distributor/manufacturer and sell to retailer at a profit.

Distributor: The businessmen who normally operate a business organization commonly termed as “Distribution House” who buy product from manufacturer and resell to retailer/wholesaler at a profit. Distributors are also called commission agent or merchant. In Bangladesh Distributors are mostly appointed at district level; may also be appointed at thana level depending on business volume. There are some National level distributors also under whom local district/thana level distributors are appointed. For example, Fair Distribution, Transcom, Kallol, etc. are National level distributors. Distributors are supposed to invest in products, space, infrastructure and human resources. Distributor earns commission after selling products to retailers/wholesalers and compensate his costs by his earned commission.

Retailer, wholesaler, and distributor buys product but do not necessarily take the ownership of the product. Ownership lies with the manufacturer until they are sold to the customer.

Vendor: Vendors are the third parties used by the manufactures to design/run any promotional activities on manufacturer’s behalf. Vendors possess special skills at doing some special activities. Vendors are paid by the manufacturer for their jobs.

DSR: Distributor’s Sales Representative also called Sales Officer (SO), Customer Executive, Sales Executive (SO), Retail Sales Officer (RSO), etc. is employed by the distributor and supervised by the Territory Managers who is mainly responsible to make available of company products to retail outlets. In some cases, they are also being employed by the manufacturers. Whoever employs them (manufacturer/distributor), their responsibility remains the same.

TM: A Territory Manager also called Territory Sales Manager or Territory Officer is stationed at Distribution House and is mainly responsible for managing distributors of his assigned territory. Territory Managers are employed by the manufacturer.

AM: Area Manger also called Area Sales Manager is employed by the manufacturer and supervised by the Regional Manager to manage/supervise the Territory Managers of his assigned area.

RM: Regional Manager also called Regional Sales Manager is employed by the manufacturer and supervised by the National Sales Manager to manage/supervise the Area Managers of his assigned region.

NSM: National Sales Manager also called Sales Manager is responsible to drive national sales. Normally NSM reports to the CEO/MD of any organization.

Discounts: Discounts offered to distributor and/or retailers to promote sales either in the form of cash or kinds.

Cash Discount: It refers to certain discount percentage or amount offered to distributor/retail. For example, 10% discount on 12 pcs purchase or Tk 10,000 purchase at a single invoice.

Kinds: Kinds refer to free products offered to retailers to promote sales. For example, 1 pcs free with the purchase of 12 pcs.

SKU: It is the short form of Stock Keeping Unit commonly used to describe all the items produced by a manufacturer. For example, 75 gram lux soap is a SKU, 100 gram lux soap is another SKU, 200 gram lux soap is another SKU, and so on.

Market Visit: TM/AM/RM is supposed to make regular market visit as per their PJP to understand/monitor the market.

PJP: It refers to Permanent Journey Plan, the visit plan that every TM/AM is supposed to prepare and submit to his immediate supervisor on monthly basis.

JC: It is Journey Cycle that refers to monthly meeting held in regional office or head office once in a month, usually at the start of a calendar month.

Primary: It refers to product purchase by a distributor from a manufacturer.

Secondary: Secondary refers to sales of products by a distributor to his retailers at the prices set by the manufacturer. It is also termed as IMS or In Market Sales. A distributor’s earning (commission) comes from this secondary.

Claim: Generally claims are expenses made by distributors on manufacturer’s behalf to run different activities designed by manufacturers at trade under the direct supervision of TM. Different forms of claims include Secondary Claim, Damage Claim, Signboard Rent, Sales Officers Salary/Incentive, etc.

Secondary Claim: Secondary claims are the expenses incurred by the distributors to run manufacturer’s trade promotions designed for retailers/wholesalers. Secondary claims need to generate by a distributor after the end of calendar month to get reimbursement from manufacturer. For example, a manufacturer designs a trade promotion like a retailer will get 1 pcs free with 12 pcs purchase. Distributor is supposed to give this free 1 pcs to retailer while selling 12 pcs to him and after end of the month the distributor will claim it to the manufacturer in the form of secondary claim with necessary supporting documents.

Primary Claim: Primary claims are claims that are paid to distributors in advance during distributor’s primary lifting. Primary claims need not to generate rather, it is automatically paid to distributors during their primary lifting.

QPS: QPS refers to Quantity Purchase Scheme, can also be termed as Value Purchase Scheme (VPS), which is designed for retailers under which retailers are supposed to purchase certain quantity/amount of products within a defined period which is generally longer than one month. It is slap based purchase scheme. For example, a retailer is offered certain cash/kind upon purchase of a definite slab like buy Tk 50,000 (or 100 pcs) and get an electric Iron free, buy Tk 100,000 (or 200 pcs) and get a Blender free, or buy Tk 200,000 (or 400 pcs) and get a smartphone free, etc.

DM: It refers to Deductible Merchandise offered to retailers with certain amount of purchase as per promotional scheme. For example, 1 pcs free with 12 pcs purchase, this free item is called DM. So, a retailer will get 13 pcs and will pay for 12 pcs.

ROI: It is Return on Investment expressed in percentage by which a distributor can understand his profitability doing business with manufacturer. ROI equals to Yearly Net Profit divided by Total Investment.

Damage: ‘Damage’ refers to the goods that are not in salable condition and returned by retailers to distributors. Distributors take back damaged goods as per manufacturer’s Damage Return Policy from retailers and claim to manufacturer for adjustment.

POSM: POSM is the short form of Point of Sales Materials that refer to different communication tools used by the manufacturer at the retail outlets.

Permanent POSM: These POSMs are made for longer period of time such as backlit or signboard.

Temporary POSM: These POSMs are made for shorter period of time to communicate monthly promotional offerings such as danger, bunting, poster, etc.

Backlit: It refers to signboard placed at the top of the retail outlet. It is equipped with light bulbs that makes the signboard visible at night. Usually manufacturers pay for the light bill on monthly/quarterly basis to retailers.

Flex: Flex refers to signboard that are not equipped with light bulbs. For flex no rent paid to retailers.

Fascia: Fascia refers to the banner used in the backlit/flex to print the communication.

Shelf Display: It refers to trade promotion designed to ensure display of products at retailer’s shelf for a certain period in an organized way for which retailers are paid.

Some FMCG Sales Terminologies

Some FMCG Sales Terminologies

Some basic FMCG sales terminologies for the fresher who are planning to start their careers in sales


FMCG: Fast Moving Consumer Goods, goods that moves faster from a retail outlet.

For example rice, dal, sugar, soap, etc.

Primary Sales: These are sales from the company to the distributor e.g. the amount of product that a distributor purchases from the company. Normally Area Manager's and Regional Manager's targets are set on Primary Sales.

Secondary Sales: These are sales from the distributor to the retailer. Usually, TM/TSM's targets are always based on secondary sales.

Offtakes (Tertiary Sales): These are sales from the retailer to the customer. While offtakes are not tracked by the company, trends of offtakes are tracked by some market research agency like Nielsen.

Beat: This is the route that a salesman (DSR/SO/SR) follows on a particular day. For example, beat on Saturday is Location X, and beat on Sunday is Location Y. If the salesman visits his each beat on every alternative day, all the retailers/stores/outlets in his sales territory will be covered in two days. Thus, he will visit the same outlet of his beat thrice per week.

Numeric Distribution: The number (or percentage) of outlets where company's product is present (outlets that have at least one SKU of a product) e.g. at how many outlets a company's product are available is measured by numeric distribution.

Weighted Distribution: The percentage of the total sales volume that comes from the served outlet.

Let's clear this by an example,

For example, you have 10 outlets in a beat, now out of these 10 outlets if your product is present in 4 outlets then numeric distribution is 40%. If that 4 outlets contributes 75% of your total sales, in that case weighted distribution would be 75%. Numeric distribution gives you an idea of the reach of distribution whilst weighted gives you an idea of the quality of distribution.

Stock Keeping Unit (SKU): This refers to a specific product from a range of product of a company. For example, 100 gram Dettol original soap is an SKU of Dettol soap of Reckitt Benckiser (Reckitt Benckiser has other SKUs of dettol soap like 50 gram Dettol soap, 200 gram Dettol soap, etc.).

DSR: Distributor's Sales Representatives are employed by distributors but managed by TM/TSM; DSRs are the salesmen who are responsible to make sales of company's products (SKUs) to retailers.

Wholesalers: An outlet of a beat is considered as wholesaler if that outlet contributes more than 50% sales of that particular beat (this assumption may differ for different companies).

Modern Trade: Super shops who mainly sell to premium customers e.g. Agora, Swapna etc. (Modern Trade is managed by the dedicated sales channel)

Trade Schemes or Trade Promotions (Widely Known as TP): These are schemes that are given out in the market to boost sales from time to time. Trade Schemes are designed for the trade i.e. Retailers/Wholesalers and the Distributors.

Trade Promos are of two types:

Quantity Purchase Schemes (QPS): To inspire the retailers to buy more, sometime company offers QPS.

These typically look like this: Purchase of 144 pieces at a time and get 8% discount

Basically these are discounts offered on purchasing a particular quantity of products.

Value Purchase Schemes (VPS): These are same as QPS, the only difference is that these are offered on value purchased instead of quantity.

These would look like this: Purchase of Tk 10,000.00 at a time and get 8% discount.

These are discounts offered on purchasing products of a predefined value.

Trade schemes are further divided into two types depending on who they are offered to:

Primary Schemes: These are those that are deducted while the invoicing is done to the distributor from the company’s end. This may be done to give the distributor an additional margin.

Secondary Schemes: These are those which the distributor is supposed to first extend to the market as per company declared trade scheme and then claims it back to the company.

ROI (Return of Investment): This is calculated on monthly/quarterly/yearly basis to understand distributor's profitability. ROI calculation is very important as it is a tool to negotiate with your distributor to manage/deploy required investments.

The equation is simple: ROI= Return/Investment, Return = (Earnings – Expenses).

FOC: Free of Cost (Goods offered as free). Sometimes company offers FOC goods to retailers as a part of special promotion.

Display: This refers to Shelf of an outlet that a company pays for (can also be a floor standing unit (FSU) in Modern Trade). Company usually hires shelf space of an outlet on monthly rental basis to display its products.

Strike Rate or Productivity: It is the % of all successful sales calls out of total calls made by a DSR. This is generally measured on daily basis.

Other Popular Terms:

EC: Effective Coverage, PC: Productive Call, LPC: Lines Per Call, LPD: Lines Per Day, LPM: Lines Per Month, LPI: Lines Per Invoice, KPI: Key Performance Indicator, TBTL: Time Bound Trade Load, DLTL: Display Linked Trade Load, NPLP: New Product Launch Process, CP: Consumer Promotion, CO: Consumer Offer, L&D: Leakage & Damage, DD: Direct Distributor, SD: Super Distributor, OSDP: Out Stationed Distribution Point, JC: Journey Cycle, TMR: Town Market Report, Discounts: Primary Discounts, Secondary Discounts, Cash Discounts.