Regular supply of the product by the principal is another major concern of the dealer. If the firm is unable to supply the product regularly after he has pushed the brand with his customers, he not only loses face with them, but also runs the danger of losing out his other business.
Effective Servicing
We shall cover this point in the section on servicing and administering the dealer.
Advertising and Sales Promotion Support
Dealers also expect adequate advertising and sales promotion support from the principal, In particular, they expect good point of purchase promotion support. Such support besides helping them to achieve higher sales, also serves as a good motivation.
Trade Relations Mix must Provide Satisfaction to both Dealer and Principal
The name of the game is to ensure that the trade relations mix provides satisfaction to the dealer as well as the principal. The firm must offer a viable business proposition to the dealer. That is the baseline; it must also remember that dealers act more as a purchasing agent for the consumers than as a selling agent for the principal. And, it must hence enthuse the dealers by supplying products/brands which they would be happy to purchase on behalf of their customers.
Servicing and Administering the Dealers
Dealers expect effective servicing from the firm. Prompt supply of the product is one part of effective servicing. Prompt supply of the product helps the dealers not only to achieve larger sales. But also faster turnover and lower cost on inventory carrying. Technical support is the other part. Technical support must be forthcoming promptly from the firm wherever necessary. In any bazaar, one can see several cases of retailers switching their loyalty from one company to another purely on the basis of their servicing standard.
Effective servicing; example of Electrolux: In the white goods business, Electrolux has scored an edge through effective servicing of dealers. They have picked up one crucial aspect in servicing-replenishment of stocks-and have scored high. They have enabled their dealers to achieve larger sales and simultaneously reduce their inventor~ Now, they can draw their supplies from a ring of warehouses around the country and receive the stocks within 24 hours. Electrolux has actually reached a point where its dealers need not carry any inventory at all; the company delivers the products directly to the consumer, once the dealer enters the order on his computer, which is connected to company’s stock points. Earlier, the dealers had to wait for two weeks or more; they had to carry heavy inventory; to avoid ‘lost sales’ due to ‘stock outs’.
Regular visits by field force: Largely, the field sales force of the company/its C&F agents stockiest provides dealer servicing. The dealers expect regular visits by the field sales force, so that seated in their shop they can have all their problems addressed. The dealers also expect to be kept updated on all vital matters relating to the business. This is possible only if the salesman visit the dealers regularly.
Securing Shelf Space and Merchandising Support from Dealers
Securing shelf space and merchandising support from dealers is another important aspect of dealer management. By enlisting the willing cooperation of the dealers in the merchandising effort, the firm derives multiple benefits. Effective merchandising accelerates the buying process as it serves as an on-the-spot reminder to the consumer to buy. A quick glance at the way in which the dealer aids/point of purchase promotion materials supplied by a firm are used in a retail shop, can help one judge the firm’s dealer management.
In the contemporary Indian context, getting shelf space and merchandising and display support from the retail outlets is of special significance as competition among brands is fast building up at the retail level. For example, in CTV’s s since a number of firms compete for the limited shelf space available at the retail shops, the ones who score in this matter enjoy an overall edge in marketing.
Even big firms and major brands have to fight for shelf
With the growing competition and the explosion in branded FMCG products, the premium on shelf space has been going up steadily: The competition for grabbing shelf space usually becomes more intense during stagnant market conditions. Even big firms and well-known brands have to earn their shelf space and display the hard way; they are not in a position to demand it as a matter of right from the retailers. For example, some time back, even a firm like HLL was not in a position to demand from its retailers’ shelf space and display arrangement for its internationally acclaimed brand Denim, by merely citing that it was a Lever product and an international brand. Nor could it get it by touting its bazaar power of a million retail outlets. The dealers wanted to be convinced about the consumer preference for the brand before he considered it for shelf space and display. Meter all, he now had the choice of a whole host of products brands with international affiliations and he could pick and choose the products/brands to which he would allot shelf space.
Many companies are now running special communication programmers with a view to acquainting retailers with their products and brands, and convincing them of the benefit that would accrue to them if they patronized them. Companies are also now forced to meet a major part of the expenses involved in display in the shops. In fact, they are even expected to meet the expenses of general decoration of the shops. ITC, for example, has been earmarking a substantial portion of its promotional budget to the decoration of retail outlets. The company now sets up at its cost special counters, which add considerable glamour to the shop and serve as point of sale advertising.
Today, in most companies, merchandising accounts for more than 15 per cent of the total marketing spend. Many companies are also devising their own quality control checks on merchandising fronts. Kellogg has about 20 staffers doing the rounds of the outlets once every fortnight. And, at Pepsi, the merchandising teams stir out every two or three months and, even more frequently during the peak season, carrying with them scissors, cello tapes, dusters, nails, board pins, hammers, thread and, of course, the usual POP material. They clean the bottles, dust the racks, put up new posters and rearrange the bottles so that the brand fails the customer.
