The importance of retail

Due to the nature of our brands both MT and GT are equally important to us. The proportionate contribution of MT has been increasing in the last three four years. Earlier it used to be hardly 2%-3%, but now it has gone up to 7-8 %. This does not mean that GT has become less important, it only means that MT requires certain special strategies compared to GT and it is more organized compared to GT. We know that MT is generally frequented by premium consumers, and hence we will focus more on premium brands there. In GT we will focus more on regular mass brands.

Approach to Retail

Consumers in metros and towns are turning towards the modern trade because of the environment which it affords. Consumers also get a variety of SKUs to choose brands from in MT. In GT you will hardly find any SKUs. But then in GT there are more choices in terms of price points and weight and they can choose as per their requirement. So we plan our visibility accordingly.

Communication at the point of purchase

Communication at the point of purchase is a different ball game all together. When it comes to branding in GT, the number of outlets we are covering is too high. We are covering around 60 million outlets and it becomes very difficult to drive visibility for so many outlets. In MT we do year long deals with retailer chains at the beginning of the year which contains most of the outlets in that particular chain. For eg, we look at different cities and the outlets which are doing best in that city. We also have a lot of offers cyclically for different brands so that there is a certain percentage of margins coming in. And we give special focus during festival times.

Retail Activation

Golden Arc is a premium brand we have recently launched and we focused a lot at retail outlets for maximizing its presence. We did sampling activations at MT outlets where promoters were positioned to offer sampling of Golden Arcs and at the same time a lot of emphasis was on at ground level branding. We did selective A class outlets - GT premium stores which contribute maximum sales to category. We generally measure activations before and after the activation takes place. And then we plan the changes which need to be done on a sustained basis.

Merchandising at Retail

For our merchandising solutions we collaborate with Kruti Promotions which help us with our presence in MT and GT. A lot of coordination is required when translating a retail strategy. Sometimes you have gap in communication with the sales team and they have to be taken in to confidence first. They have to show interest in the project as without their interest the project will not be successful. We have to assure them that their contribution is vital to increasing the market share and increasing  the presence of the brand in retail. Over a period of time with frequent coordination meetings, all the challenges are usually sorted out. There are three entities involved here: one is the market informant, then there is the sales department and the third is the manager of the retail outlet.

We have our own standards for merchandising and we share it with the merchandising agency and they follow that.

Budget for Merchandising

 It can come to almost 5% - 15%

Investment strategy

Every year there has been a 10-15% increase and in the last two years it has gone up by 15-20%.  As already mentioned, in the last two years there has been a continuous focus on MT. It has been growing and has made us increase our investments. But then like I said, today GT visibility is important too. These two factors: increased emphasis on MT and evolving GT visibility criteria together have made us increase our investments. The retail level marketing is definitely going to grow in the near future.

Shopper Study

The ad agency does the shopper study which they share with us. We don't commission shopper study ourselves. The agencies conduct the study themselves and share their model with us time to time.

We have seen that the consumer is very open to trying out new brands and premium brands in MT. They do not mind paying extra too. Earlier, even Rs 20-25 used to be a price barrier in this category , but now it has been broken and shoppers are even willing to pay Rs 50-60. And this is happening in smaller towns too.