Today’s successful fast moving consumer goods (FMCG) brands don’t just deliver their products to retail outlets and wait for potentials shoppers to buy their products. With the help of the field marketing specialists they actively increase product availability and visibility in the retail space to turn shoppers into buyers.
The economic climate has considerable impact on the global retail sector, which represents around one third of the gross world product. To capitalize on current opportunities and temper risks in a volatile economic climate, it is critical for retailers and brand owners to expand their businesses in and to promising, future markets. Avoiding the pitfalls of shifting retail markets, however, requires a strategic mindset about expansion. Each market has unique challenges and unique opportunities.
Malaysia decidedly is a promising land for the consumer goods sector. With a forecasted GDP growth of over four percent in 2017, the country is still among the fastest-growing economies in the region. The country is also one of the most attractive markets worldwide in retail development, according to consulting firm ATKearney.
These attractive market conditions awake the interest of new market participants. Aside from the established Western brands, many Asian companies are expanding to new markets such as Malaysia, leading to increased competition. Domestic consumer goods companies are getting more competitive in their offerings, too.
Launching new products is one way to increase market share. This however requires significant R&D and marketing investments and space on supermarkets’ shelves is very limited. Of the newly introduced products in South East Asia, just ten percent remain available on the shelf of retailers beyond their first year, highlighting the significant risk involved in investing to take a new product to market.
Beyond expanding to more outlets and introducing new products, field marketing can help grow Malaysian FMCG companies. The discipline is a relatively new and broad activity within marketing. Its main benefit is to drive growth for brand owners and manufacturers by increasing product availability and visibility in the retail space.
In addition to merchandising, field marketing also includes product demonstrations and consulting, promotions, event management and design of promotional material such as product displays, promotion booths and uniforms for promoters. Field marketing aims to actively convert shoppers into buyers for FMCG companies. These value-adding services have increasingly become important over the years as they increase the demand for products directly at the point of purchase, thus enabling attractive growth opportunities for consumer goods manufacturers in a competitive environment.
Increasing on-shelf availability is one of the main targets of field marketing. At any given time, approximately one out of every twelve products globally is out of stock. Research shows that when a shopper’s favorite product is not available, nine percent doesn’t buy any product and leaves the shop empty-handed and 37 percent buys a different brand. Many shoppers never switch back to the original brand. Every two percent of extra on-shelf availability leads to a one percent increase in extra sales. In an Asian market that is more competitive, improving availability is a key to success.
Studies for South East Asia show that actively managed field marketing activities can increase overall on-shelf-availability considerably by up to ten percent. These additional percentage points can be decisive for the commercial success, especially in the highly competitive FMCG sector in Malaysia.
This article was featured in the May 2017 edition of Malaysia’s magazine Business Today.
DKSH is active in the field marketing business through its joint venture DKSH Smollan Field Marketing (DSFM). DSFM is the largest field marketing provider in South East Asia with more than 4,000 specialists servicing over 70,000 retail stores across seven countries.
In Malaysia, DSFM employs more than 750 field marketing specialists with 280 dedicated to DKSH who drive sales growth in the last mile of the supply chain journey, effectively turning shoppers into buyers. DSFM’s field marketing specialists give DKSH’s clients and customers access to real-time, reliable data (from an integrated IT platform) on product availability, promotion compliance, pricing and competitor activities. This enables DKSH and its business partners to take quick actions to improve product availability and visibility.
Bjorn Kruizenga is based in Malaysia and is responsible for regional Business Development and M&A in North and Southeast Asia for the DKSH Smollan Field Marketing joint venture.