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FMCG
Sales Boosting
(E)
by
Laurus Nobilis
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What
is the Impulse Purchase? Why to boost FMCG
sales? How to boost it?
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| Back |
Posted:
Sept 2008 |
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During
my career I had the opportunity to work for
non-profit as well as for profit-oriented company.
I must say that the difference is huge. Non-profit
organization does not have to earn the budget.
Their goal is to spend it. Of course, there
are some rules and
guidelines that
should be respected. In
such organization reporting and expenditure
justification to donors is crucial part, in order
to make an organization eligible for future
funding. |
On
the other side, working in a profit oriented is
something completely different. Still you have the
funding. But in this case your stakeholder is also a
shareholder, who expect profitable operation, with
certain return on investment. Further more, goal of
every successful company is to have continuous growth in
all directions; expanding the portfolio, market share,
increasing of sales, revenue and profit, while driving
the business at the optimal cost.
But
how
long the growth can be
continuous? Are there any limitations for market need?
Of course that there are limitations, but they
are imaginary, since the market demand is not something
that is firm. It changes, as it evolves through time.
But also it is changed by the influence of supplier,
i.e. Company is creating a new demand of their potential
consumer, by offering them a new and better offer of
products and services. This offer is done through
development of a new products and services, as well of
suitable ATL campaign.
On
the other hand BTL campaign
is something that is also very important for sustainable
growth. BTL marketing is very important, especially the
companies that deal primarily with Fast Moving Consumer
Goods ( FMCG ). While
capital expenditures as real estates or vehicles
are on the one side of demand scale, FMCG commodities
like food, soft drinks, alcohol drinks, cosmetics, etc
are on the other side.
FMCG
products are subject of planned purchase, but are very
often subject of impulse purchase.
| Impulse
for purchase can be triggered by clever
positioning and merchandising of product within
the shopping area. There are several basic rules
for successful positioning that will initiate the
shopping need of consumers, even when they didn't
even thought about buying some item. |
| Impulse
purchase
is the shopping that is not previously
planned by the Shopper, but is initiated by
visual input of well positioned product or
advertisement. Impulse purchase is a
phenomenon that can bring significant sales
increase of FMCG if fully explore
positioning opportunities. |
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- Corporate
Block is the section on shelf or separate
rack that is dedicated for product of one manufacturer
or brands owner.
Corporate block gives strength from brands
synergy, it creates visual impact and increase
brands value. Shopper is more likely to be
attracted by impressive, well arranged section
dedicated to one producer, than by the bunch
of products scattered around on different
shelves.
Corporate Block
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- Positioning
Before Competition is very important. Who
is the winner on 100 m race? That is the one
who first gets to the finish,
even if the second one is only 0,01 sec
behind. This is why is important to have
position before competition.
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- Eye
Level Rule say that whatever is in the eye
level and slightly below is at the reach of
the hand. What ever is at the reach of the
hand is likely
to be grabbed. People like easy and effortless
shopping, without stretching up or leaning
down. This is why you should avoid too low or
to high positioning.
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- Multiple
Shopping Points; more selling points means
more shopping
opportunities. For small size
outlets applies triangle rule, while for the
large outlets quadrant rule is more applicable
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- Triangle
Rule says that the best positioning in the
small outlet is capturing the golden triangle -
hot spots: entrance, the most frequent area and
the cashier. This is obvious, since, whoever
comes to the outlets is coming through all
mentioned spots, and therefore purchasing
possibility is the highest from perspective of
horizontal positioning.
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Quadrant
Rule says that product positioning is
recommended in all zones, but their strength
from entrance to the cashier is in decreasing
trend. Simply, at the entrance the shopper's
basket is empty
while wallet is full, shopper is eager to
shop. While moving to the exit the basket
becomes full, money already allocated and the
shopper is less enthusiastic,
since he is starting to think about the rest
of a day, rather than about shopping.
Therefore early positioning is important for
impulse purchase based products.
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- Merchandising
is the process of effective arranging of
product at the selling point. It covers
activities like stocking up, arranging
according the corporate merchandising
standards, placing the price tags,
cleaning
and rotating
products according the expiry date ( FEFO
).
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- X-Merchandising
is positioning the product next to the
other product that is complementary to
your products. Examples:
soft drinks next to snacks, or spices
next to the meat.
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These
are basics of successful positioning in the
shopping zone. This should be accompanied with an
optimal inventory stock, changes in portfolio,
smart price policy and fresh advertising material.
If the outlet is worthwhile investing, then
special promotions, presence of sales animators,
surprises for shoppers and other add-ons can be
used.
Impulse
purchase is the moment that must be used in the
FMCG industry. Just to be available is not enough.
It is necessary to be active and visible at same
time. There are many similar products that can
easily substitute your. Sometimes only the small
difference in position can make the judgment of
shopper about which product to buy. For shopper
that may not present a big difference. But what
about your product? |
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