MYPRODUCT50 From 12 To 32. Range Management Challenges

1.Situation

Until 2012 the range of anti-parasites for dogs and cats marketed by Veteco included 12 SKUs from Merial: Frontline Combo (pipettes), Frontline (pipettes) and Frontline (spray).

2.Task

However, between 2012-2015 the portfolio of anti-parasitic products for dogs / cats marketed by Veteco increased from 12 SKUs to 32 SKUs Merial, so range management became one of my priority responsibilities as Commercial Director Veteco.

But what are the main dimensions concerning the range management universe?

3.Action

From the above-mentioned position I coordinated and actively participated in launching and positioning the new generations of Merial anti-parasitic products for dogs / cats on the Romanian and Hungarian markets: Certifect, Broadline, Nexgard, Nexgard Spectra and Frontline Tri-act.

The new product ranges represented an evolution in terms of presentation form, active substances, mode of action, therapeutic’ options on external and internal parasites, benefits and results.

If until the release of the new products the commercial strategy was mono-brand (Frontline Combo / Frontline), the movement to 32 SKUs covering 7 different product ranges involved changes in the commercial approach by including the range management component.

The range management involved distinct analyzes, decisions and actions on product price corridors, distribution channels, client segmentation, dedicated promotion actions, professionalization of sales team, sales speech adjustment, sales and supply forecasting, cannibalization between ranges and more.

4.Results

All of these considerations are very important for implementing a correct range management.

But from my experience a successful range management must necessarily address three essential dimensions.

1.Psychological. When a commercial team worked for about a decade with mono-brand products, switching to multiple ranges involves overcoming a psychological barrier. Being aware of this psychological dimension is essential for the commercial manager in order to align the sales team to the new commercial context. This implies to provide tools and incentive in order the sales team to be motivated to change their sales and marketing habits and to move as quickly as possible to the sales of ranges. That is why in the target-bonus system detailed in MYPRODUCT28 one form included a special bonus for selling the new ranges.

2.Commercial Policy. Commercial policy adjustment is essential for a successful switch. In MYPRODUCT36 I detailed how since 2014 I switched from commercial policy based on monthly offers to annual contracts based on quarterly / yearly targets with customer incentives for new ranges acquisitions. In this way by the end of 2015, around a quarter of total anti-parasitic sales were represented by the new ranges.

3.Differentiation at Shelf. Even though the Merial anti-parasitic product portfolio increased from 12 to 32 SKUs, this does not mean that in the veterinary cabinets and pharmacies the exposure areas of these products changed significantly. In fact, these exposure areas remained the same, only the number of products (from us and from the competition) increased significantly, which implied a fierce battle for the shelf space.

If the psychological and commercial policy dimensions were in our direct coordination as a distribution company, the range management in terms of shelf exposure / differentiation was a direct attribution to Merial as the owner of the brands, the distributor being able to support the correct implementation of these policies based on the materials / recommendations received from the manufacturer.

As a result, I repeatedly raised to Merial the need to access tools, materials that involve range management at sales points.

Because this project was not an urgent matter on the producer’s agenda, I took the initiative to locally develop such tools that I then submitted to the manufacturer’s approval, inclusive from budget reason. So together with a specialized company I developed a special presentation stand for exposing our 32 SKUs. The stand was subsequently approved by Merial, went into production and then placed in selected locations from Romania (veterinary cabinets and pharmacies) offering a strong exposure, image and differentiation of our products versus competition.

5.Key Leanings

Switching from products to ranges is a critical process in the evolution of a company.

As a commercial, marketing or brand manager you must be aware of the inertia, psychological barriers of your teams, your customers and adapt your policies and actions to the new product / service matrix. The sooner, the better.

Notification: MYPRODUCT reflects my real professional experience and expertise as well as my subjectivity. I do have a profound respect for all the companies I collaborated to and for all the people I worked with. It is not my intention to approach any sensitive, confidential or offending information related to companies, projects or people. If you the reader deduct or recognise companies, projects or people in my examples, I kindly ask you to respect MYPRODUCT and my professional and ethic approach and to not share any detail, information, situation, name, company.