Sales and marketing-two key functions.

Sales and Marketing...the tug of war....

Episode 6.

In my 4 decades of professional life I have never seen a day go without some issues cropping up between marketing and sales! Its amazing and not a single company can boast of 'no conflict' between these two functions? During the initial days of my salling career, it never was an issue as once a while, we used to get someone from marketing for a market visit and they would go around with us, visit some outlets, try to understand the shelf movement, enjoy local cuisines and leave next day..We need to ensure they carry good impression about us as they are from HO and a nice word from them would help us. Even as ASM never bothered about the marketing guys as most of our activations are customer oriented with visibility drives and on pack offers. The on pack offers are on allocation basis and hence not much of fights or difference of opinion. Things started looking different once I got a taste of 'pull' based markets like AP those days. Those in the alcohol trade and are very much used to TN, Kerala and the current AP, Chattisgarh 'pull' doesn't play any major role in these markets but if you look at Maharashtra, Goa, Delhi, Calcutta it's a different ball game. I started to understand the role of marketing only after I moved to Hyderabad as ASM-HL in 1986 immediately after my wedding. After joining IDV/Diageo the understanding of marketing/trade marketing/consumer activation became very clear and the disagreement and fights started. Lets understand the fundamentals first. Just the FUNDAMENTALS only...am not going deep.

The difference between marketing and sales. Many use the word 'marketing' even if they are just doing selling activities only. Someone who is in to managing a region like Madurai in TN to deliver his monthly numbers and when asked his role, he would say he is in marketing. This I had come across many a times. I used to take the trouble of correcting them.

So a typical marketing guy would be working on how to pull the consumers to a particular product/brand whereas the sales guys job is to ensure the stocks are made available in the right kind of outlets when the consumers demand them. In simple term, marketing is all about 'pull' (pulling the consumers to the brand) and sales is all about 'push' (pushing the brand in the outlets for meeting the consumer demand). Clear?

In marketing you start as product manager and later move on to become brand manager /marketing manager et al. Same in sales too...you start as TSE and move upwards as RSE-ASM-BM-RSM-National Sales Manager/GM Sales.

First an idea emerges which is developed further and then the idea/concept is given a shape in terms of a product. This is for any new product innovation...an example here would be Bailey's Irish Cream in alcohol industry...this was the first product with irish whiskey and irish milk cream perfectly blended-in consumer category the detergent bars. These would come under new product innovation and development. Where as many companies today do not bother to get into innovation as it is not only time consuming but also very expensive. So what they do is, copy existing concept and come out with their own variations. For example 'Viagra' was the invention of Pfizer and many just copied content and concept and came out with their own brands. In alcohol industry no one comes out with any new concepts. Baileys, RTD's (Ready to Drink) are exemptions. So let's take the case of  a new entrant with lots of aspirations and big pocket. Be it alcohol industry or FMCG. First the top team/promoters discuss what kind of products they should have in their portfolio, the markets they would start with, dynamics of the market, sales data, route to market, kind of team they require and finances. They would first appoint a CEO giving him the objectives and the CEO would look at the road map and go for recruitments. When it comes to product development it would be done in conjunction with the marketing, sales, finance and manufacturing. Once the road map is cleared, the product/brand development team-marketing- would start working on the product and get it ready. Once the product is ready, consumers research is conducted (in terms of content, comparisons, packaging and price et al) and based on the findings would tweak/change and come out with the final product. This would be submitted to the leadership team, discussed and cleared. The most important thing in NPD is differentiation or USP (unique selling proposition). Differentiation is all about the 'why' factor. Why the consumer should change from his existing choice to mine...what is that differentiating factor for the consumers to switch? This is so true if you are positioning a product in a category which has many similar products. And what is the USP of my product? Unless this is clearly stated, the product would fail to take off and sooner become more of a 'push' brand. If it's innovation, we have to clearly communicate to the prospective consumers on the 'what' factor of this brand. For example, take Viagra or Bailey's-initially it's all about the content -the what- and 'how' it would work. This is where the marketing has to get it right. Once these are all figured out, the marketing guys will sit down with the sales team and also with the Trade marketing guys and chalk out consumer activations. Trade Marketing is the connect between marketing and sales. The Trade marketing key responsibility is to execute all the marketing activations through the sales team as planned. In terms of activations also there are two kinds. One is tactical and another one is strategy. In simple terms ATL (above the line) and BTL (Below The Line). ATL is all about media advertising, visibility drive, digital marketing, celebrity endorsements et al. BTL is all about trade push and also consumer offers. ATL is to get the consumers on your side and for long term gains. For example, take Coca Cola. This company would be spending huge amounts on media be it conventional or digital, celebrity endorsements and also in BTL with purchase linked discounts to the customers/trade and periodical consumer offers. Offer for the customer is to block his space with Coke. The consumer offer gets good publicity by huge displays in the retail outlets and also media advertisements, where possible. Many companies focus on the Point Of Purchase (POP) or Point of Sale (POS). In the current scenario, hyper/supermarkets play a big role and hence POP/POS plays a huge role. And this comes with a cost which has to be factored in the brand cost summary sheet. What happens with these kind of consumer offers is two fold. 1) We retain our own consumers by offering them some freebies for their loyalty and 2) pulling competition to Coke during the offer period. There would be some %age of competition switching over to Coke even after the offer gets withdrawn. This is the idea behind any consumer offer. In alcohol industry only the MNCs and National players focus on ATL whereas the regional players due to lack of resources focus on BTL only with trade discounts, offers for consumers, window displays, Counter Salesman schemes et al. The problem here is that the counter salesmen would shift loyalties quite often based on which side the butter is stronger. And also from my experience, most of the salesmen do not promote any product unless it is TASMAC kind of situation. Also the consumers, mostly are brand conscious when it comes to things which are consumable-be it alcohol or cigarette. One has to really have a winning strategy to convert the consumers. That's why in alcohol industry the trade plays a huge role and also the distribution. 

So when I was in sales, I used to have my share of fights with the marketing guys but as you keep moving up and maturing you realise there are ways of managing the conflicts. First of all one should understand the role of these two important functions as explained above. In FMCG companies the roles are well defined but in the spirits industry, due to restrictions in marketing there are still unresolved issues between these two functions. My opinion on this is that the marketing guy, let us call him the brand manager, has to take ownership of the brand in terms of its overall performance encompassing everything. He is the guardian of the brand. He has to set very clear goals for his brand and explicitly share the same with the sales guys. The major issue here is that many of the brand managers, tend to become, what we call, 'armchair managers'. They google search for everything and rush to their agencies for even minor things. They dont, most often, take the pain of keeping their ears to the ground. Get confined to their table, agency meetings and fail to take notice of what the consumers are seeking. They can become great brand managers if they take time to visit the customers, spend time with them to understand the consumer and market trends. Spend time in the super markets to figure out the shopping trends of consumers in terms of what they are looking for, how they get influenced and what role the displays, promoters, billboards, offers and the sales team play. They should never compromise and make the agency to work hard to create the right kind of proposition! Many a times brands fail due to lack of propositions. Why should a consumer change from a particular brand to a new one? The brand managers have to always look for insights. WHY & What should be the question asked frequently to arrive at breakthroughs. The sales team have to also understand this and dont get excited with cosmetic things. They should always figure out how they would make an impact with the ammunitions they are given with. At the end of the day, especially in adult beverages business, it is the sales guys who have to not only make the product available but also ensure it is moved off the shelf. If one is launching a bathing soap, you can air few commercials on whatever medium available and drive demand. In adult beverages that's not possible in many markets in India and also in Middle East, due to restrictions on advertising. Also it is not like taking the goods in the van and going for spot sales. There are processes involved in every step in the alcohol industry. IF one is working for an FMCG and launching a shampoo, it can be made available the same day across a city but in alcohol industry it would take some time as the processes have to be followed. The government controls the movement of stocks from manufacturing to distribution points and to retail point. Each point one has to take an approval in writing to move the goods. The Trade Marketing guy, the brand manager and the sales guy have to work in tandem to achieve the desired results. Many a times i had seen this '11th hour' rush. The promotion has to start on the 1st of the month and the guys would be running for gift items logistics till the 31st. Planning is so important as you have to make a huge impact of whatever activity you are doing! Remember, consumers are not fools. They always look for value. The challenge is communication with the consumer. How do you attract their attention? How would you stand out? How do you ensure that they hear you out before they hear out competition? The sales guys, if they want to be successful and climb the ladder faster, have to understand brand commercials. The difference you know! Instead of just pushing and looking at numbers, start looking at creating value. Managing for value is the mantra here! Especially when the market is becoming tighter and more competitive. The sales guy must provide periodical feedback on the brand performance, market trends and competition to the brand guys. Ensure you capture everything and pass it onto the brand guys. There is no competition here between the marketing and sales guy! They are part of the same organization and both functions are equally important for the success of the organization. Empathising with each other and helping each other is the key for the success. Both the brand manager and the sales manager should know what the brand contributions are. Brand Contribution (net sale value-cost of goods-manufacturing-cost of sale-discounts), is so vital and hence should be clear to both the functions. Periodic customer and trade visits together would help to 1) understand and 2) iron out issues if any. There is no 'ego' war here. The guy in sales today would get transferred to brand management tomorrow and vice versa. So to be a complete manager, a stint in both sales and marketing should be made mandatory by every single company.

The advice to both marketing and sales guys-pl understand the cost card...this is the 'Gita' followed by the management. Understand every bit of the cost especially if you are in marketing as sometimes due to market dynamics there could be cost push which may have to be absorbed by the brand....so one has to understand the value engineering also. How one can cut cost without compromising on the content or quality of the product. Brand communication has to be uniform.

What we do for the brand at the consumer level would leave a lasting impression so be very clear about it. 

Also the seasonality factor depending upon the category you are in. For many the Diwali-Xmas-NY-Holi-Pongal are major selling seasons. If you are looking at achieving your 60% of the volume during this period, plan your activations well in advance and keep things ready. Always keep an eye on what's new. Avoid repeats as consumers would get bored of taking the same.

I will give you some examples here for some great promotions-tactical. 1) Value packs ( buy a lit at the cost of 750 or 3 for 2 et al). 2) Upgradation offers. Take JW series of whiskies. What's the company would be looking at..upgrade consumers from Red to Black to Double Black to Gold to Blue--right? So if you want to run a promotion on JW Red and at the same time remind consumers that Black is more premium and they should go for it on special occasions then the offer should be 'buy two bottles of Red and get a 20cl Black free...or in the bars, Black at the price of Red-only today...this will increase the trials and should result in conversions too. Once during my trip to India from Dubai, on landing I find out that on Blue label the shop was giving 50cl Black free. I immediately called my colleague in Bombay and told him to stop it as it leads to downgrading. When you visit supermarkets you would get lots of ideas. Sometimes it is better to copy and spin than reinventing the wheel. One of the best promo we reaped maximum was a SS Table spoon free on every bottle of whiskey. Initially there was lots of objections as the distributor was not able to relate these two but the consumers grabbed it. Communicating the offers at the POP level is vital here. Be it consumer brands or adult beverages. 

Compared to 90s and 2000s the market dynamics have changed a lot now. Consumers preferences are changing. They are getting influenced right left and center. They have huge choices to exercise from. So as a sales/marketing guy how you are going to play your role efficiently?

My key learning is that marketing and sales have to work in tandem for exploiting the market potential and also within the allocated budgets. Key is right thing at the right time. WHAT-WHY-HOW...

As stated, I have touched upon only the basics....in my future posts will also look at specifics...

Till next post....

Stay safe and enjoy life.