’’’’An Objective Study of Current An Objective Study of Current Merchandising Activities of Nestle Merchandising Activities of Nestle

Bangladesh Ltd. (NBL) and It’s Role on Bangladesh Ltd. (NBL) and It’s Role on Point of Purchase Along With Some Point of Purchase Along With Some

Recommendations for Improvement’’Recommendations for Improvement’’

Problem DefinitionProblem Definition

Point of PurchasePoint of Purchase

MerchandisingMerchandising

Outlet SpaceOutlet Space

Acquiring SpaceAcquiring Space

Point of Purchase???Point of Purchase???

The Point of Purchase is any place where the The Point of Purchase is any place where the shopper makes a decision to purchase a certain shopper makes a decision to purchase a certain product.product.

It is a decisive moment when all previous marketing It is a decisive moment when all previous marketing activities stand or fall.activities stand or fall.

It is commonly known as retail outlet which is called It is commonly known as retail outlet which is called

by Nestle as trade.by Nestle as trade.

Merchandising???Merchandising??? Merchandising is the systematic display Merchandising is the systematic display

of product to inform customers about of product to inform customers about product attributes and thus maximizing product attributes and thus maximizing opportunities to purchase a brand from opportunities to purchase a brand from that of its competitors. that of its competitors.

It is a vital factor to win at POP.It is a vital factor to win at POP.

Effect of Space Allocation on Effect of Space Allocation on SalesSales

Space allocation has no effect on completely Space allocation has no effect on completely brand loyal consumers.brand loyal consumers.

Consumers’ brand choice may be influenced by Consumers’ brand choice may be influenced by one or more in-store merchandising factors- one or more in-store merchandising factors- including space.including space.

Objectives:Objectives:

General Objectives:General Objectives:

To discuss about merchandising activities of NBL at To discuss about merchandising activities of NBL at point of purchase.point of purchase.

To discuss about trade space acquiring strategy of To discuss about trade space acquiring strategy of Nestle Bangladesh limited.Nestle Bangladesh limited.

Specific objectivesSpecific objectives To find out trade point of view regarding merchandising of To find out trade point of view regarding merchandising of

products. products.

To compare the sales status between space & non space To compare the sales status between space & non space outlet.outlet.

To find out the impact of product visibility.To find out the impact of product visibility.

To compare the sales status between outlets based on To compare the sales status between outlets based on frequency of Merchandiser visit.frequency of Merchandiser visit.

To identify the role & importance of planogram for proper To identify the role & importance of planogram for proper merchandising.merchandising.

Specific objectives (Contd.)Specific objectives (Contd.)

To discuss about bad goods control through proper To discuss about bad goods control through proper merchandising.merchandising.

To identify problems regarding merchandising of products & To identify problems regarding merchandising of products & trade space management & also to provide some feasible trade space management & also to provide some feasible solution.solution.

To identify the problems in different activities regarding trade To identify the problems in different activities regarding trade space management and making effort to provide feasible space management and making effort to provide feasible solution. solution.

MethodologyMethodology

Primary DataPrimary Data

Unstructured interview with Unstructured interview with traders of different area. traders of different area.

Formal conversation with some Formal conversation with some managers and employees of managers and employees of Nestle Bangladesh Limited Nestle Bangladesh Limited

Observation of the office works Observation of the office works and different activities of the and different activities of the officials during internship period. officials during internship period.

Secondary Data:Secondary Data:

Periodic Sales Data from Periodic Sales Data from NBLNBL

Journal of NBLJournal of NBL

Related booksRelated books

Website of NestleWebsite of Nestle

InternetInternet

Strategy of NBL at POPStrategy of NBL at POP

Regular Display of NBL products by permanent Regular Display of NBL products by permanent merchandiser operations.merchandiser operations.

Conducting Space Management Program for acquiring Conducting Space Management Program for acquiring permanent shelf space.permanent shelf space.

Implementation of channel focused Plan-o-gram.Implementation of channel focused Plan-o-gram.

Customer engagement through periodic display Customer engagement through periodic display drives/contests.drives/contests.

Merchandiser Activities 0f NBLMerchandiser Activities 0f NBL

Permanent MerchandisersPermanent Merchandisers

Frequency of Merchandiser Visit(F2,F4,F8) Frequency of Merchandiser Visit(F2,F4,F8)

Benefits received by NBL from Benefits received by NBL from MerchandisingMerchandising

Better VISIBILITY Better VISIBILITY

Ensure FRESHNESS of Ensure FRESHNESS of StocksStocks

Helps in REPEAT SalesHelps in REPEAT Sales

Stimulates purchaseStimulates purchase

Increase the sales of Increase the sales of other related productsother related products

Increases PROFITSIncreases PROFITS

Bad goods controllingBad goods controlling

Sales Impact of MerchandisingSales Impact of Merchandising

0

20

40

60

80

100

120

140

F-8 F-4 F-2 F-0

Marchandiser Frequency

Gro

wth

Growth

Figure 6: Growth comparison between outlets of different frequency of merchandiser visit

Bad Goods Controlling by Bad Goods Controlling by MerchandisingMerchandising

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

0.30%

0.35%

0.40%

0.45%

F8 F4 F2 F0

Merchandiser Frequency

MR

% MR %

Figure 7: MR comparison between the outlets of different frequency of merchandiser visit.

Bad Goods Controlling by Bad Goods Controlling by MerchandisingMerchandising

Market Return(Bad Goods)

0.00%

0.05%

0.10%

0.15%

0.20%

0.25%

1

Type of Outlet

MR

% MR of Space Outlet

MR of Non space outlet

Figure 8: Market Return Comparison between space & non space outlet

Problems regarding Problems regarding

merchandisingmerchandising

Lack of cooperation from retailer Lack of cooperation from retailer endend

Insufficient product stockInsufficient product stock

Different store formatDifferent store format

Merchandiser waste timeMerchandiser waste time

Planogram???Planogram???

PlanogramPlanogram is a diagram of fixtures and products is a diagram of fixtures and products that illustrates how and where retail products that illustrates how and where retail products should be displayed, usually on a store shelf in should be displayed, usually on a store shelf in order to increase customer purchases.order to increase customer purchases.

C3-MxF 400g

L1-400g

L2-400g

NSC- N

S

Mag-Box

Mag-Box

L3-400g

C1-3F 400g

C1-3F 400g

C1-Wh 400g

C1-Wh 400g

C2-ApC 400g

C2-ApC 400g

N1-200g

C3-MxF 400g

L2-400g N1

-200g

N2-200g

N2-200g

N3-200g

N3-200g

L1-200g

All110

Nid3+

Nid2+

Nid-Gm

Nid-gm

NSC-5

NSC-50g

NBL PlanogramNBL Planogram

Sequence-as per Sequence-as per age of feedingage of feeding

Stage conceptStage concept Guideline on BIB Guideline on BIB

packpack

Problem Regarding PlanogramProblem Regarding Planogram

Retailers are not familiarRetailers are not familiar Planogram guidelines are not always Planogram guidelines are not always

accepted by retaileraccepted by retailer Planogram is not properly maintained.Planogram is not properly maintained.

Space Management ProgramSpace Management Program Acquiring permanent shelf Acquiring permanent shelf

space through space space through space remuneration which remuneration which strategic goals are:strategic goals are:

Competitive advantage in Competitive advantage in a stable waya stable way

Motivation of tradersMotivation of traders Dominate the outlet Dominate the outlet

through capturing more through capturing more shelf spaceshelf space

Sales DevelopmentSales Development Building corporate imageBuilding corporate image Ensuring Product VisibilityEnsuring Product Visibility More influence on TradeMore influence on Trade

Space Capturing by Space Management Space Capturing by Space Management ProgramProgram

Sq. FtSq. Ft Sq. FtSq. Ft Sq. FtSq. Ft Sq. FtSq. Ft No. of No. of OutletsOutlets

No. of No. of OutletsOutlets

No. of No. of OutletsOutlets

No. of No. of OutletsOutlets

20042004 20052005 20062006 20072007 20042004 20052005 20062006 20072007

48,00048,000 54,30454,304 60,73360,733 6414164141 48004800 50485048 59605960 62786278

Positive influence of SM programPositive influence of SM program

Outlet dominationOutlet domination

Trade Motivation Trade Motivation

Attract customerAttract customer

Improved efficiencyImproved efficiency

Business developmentBusiness development

Informed Consumer Informed Consumer Choice.Choice.

Increasing stock depth Increasing stock depth

Competitor blockingCompetitor blocking

Simplifying Shopping Simplifying Shopping Experience Experience

Corporate image Corporate image Development.Development.

Negative Impact of SM ProgramNegative Impact of SM Program

Greater impact during out of stock Greater impact during out of stock

The space fee can make the The space fee can make the retailers greedy.retailers greedy.

Problems regarding SM programProblems regarding SM program

Unused shelf space & Cost Effectiveness of Unused shelf space & Cost Effectiveness of SM programSM program

Inappropriate forecusting of customer Inappropriate forecusting of customer demand & retailer purchasing abilitydemand & retailer purchasing ability

Acquiring shelf space without space Acquiring shelf space without space

remunerationremuneration

Personal Personal relation relation

High off-takeHigh off-take

Technical Technical binding binding

Display contestsDisplay contests

Comparative Status between Space & Comparative Status between Space & Non Space OutletNon Space Outlet

Sales Contribution of SM & Non SM Outlet

Non SM Outlet Contribution

56%

SM Outlet Sales

Contribution44%

Non SM OutletContribution

SM Outlet SalesContribution

Figure 2: Percentage contribution of total SM & Non SM outlet in Savar

Figure 1: Percentage of total SM & Non SM outlet in Savar

Generating demand through Display Generating demand through Display schemesschemes

Display Contests for the top 3 Display Contests for the top 3 BrandsBrands

Display linked Trade Display linked Trade PromotionPromotion

Impact of display program on SalesImpact of display program on Sales

Visibility Effect

0%50%

100%150%200%250%300%350%400%450%

Outlet (With DisplayContest)

Outlet (without displaycontest)

Outlet Type

Gro

wth

Series1

Figure 5: Growth Comparison between display outlet & non display outlet

Display UnitDisplay Unit

Customized display unitCustomized display unit

Acquiring more spaceAcquiring more space

Brand image developmentBrand image development

More brand visibilityMore brand visibility

Trade Perception Regarding Nestle In Trade Perception Regarding Nestle In

Store Merchandising ActivitiesStore Merchandising Activities

Product DisplayProduct Display

Merchandising ActivitiesMerchandising Activities

Corporate Image DevelopmentCorporate Image Development

SatisfactionSatisfaction

ConclusionConclusion

Differentiating outlet by innovative in store Differentiating outlet by innovative in store merchandisingmerchandising

Enrich the experience of consumers with a Enrich the experience of consumers with a mutual benefit of retailers and the company. mutual benefit of retailers and the company.

RecommendationsRecommendations Proper forecasting of customer demand for Proper forecasting of customer demand for

specific outlet.specific outlet.

Facing criteria should be aligned with retailer’s Facing criteria should be aligned with retailer’s consistent purchasing ability.consistent purchasing ability.

Customized & store-specific solutionsCustomized & store-specific solutions are are needed.needed.

Planogram concept should be made more Planogram concept should be made more clarified among merchandisers and retailers.clarified among merchandisers and retailers.

RecommendationsRecommendations Greater emphasis to improve merchandiser Greater emphasis to improve merchandiser

influence on tradeinfluence on trade

Maintaining proper stockMaintaining proper stock Further Study is needed to know the percentage Further Study is needed to know the percentage

benefits of getting extra facing of specific benefits of getting extra facing of specific product.product.

Focus on SM outlet because there is a huge Focus on SM outlet because there is a huge investment in these outlets.investment in these outlets.

QuestionQuestionss

??????

Thank YouThank You