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1. Utilising third-party intermediaries as
innovative way to drive your Brand in
Emerging Markets
InnoCos Conference, Véronique STEPHAN
Rome, May 23rd, 2014

2. Why I am talking to you today
• Efficient go-to-market model is required
to succeed in new markets
• Third Party Sales Intermediaries are often underestimated
• Sales Intermediaries can provide innovative solution
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3. The background
• In today’s economic context, generation of revenues is a priority
• Revenues to be created by geographical expansion
• Emerging markets identified as a great opportunity
• More risk averse culture to protect current profit
• Essential to strive for cost efficient and low risk market entry
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4. Key requirements for a successful launch
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5. What do we need to understand?
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What are the local
commercial
policies?
What are
the sales channel/
retailers?
What are
the local
commercial
policies?
What is the
strategic
role of the
channel/
retailer?

6. Enablers of sales executional capabilities
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Adequate
sales structure
Passionate and
skilled sales force
Negotiation power
with the trade
Relationship
to the trade
internal
external

7. We need a Mr. “Right” organization
for efficient go-to-market
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Muscle Mr. “Right”
executional skills
Brain
commercial knowledge

8. We need to make a decision: own or rent?
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Shall we rent the
services of Mr. Right
organization at a
third-party?
Shall we build our own
Mr. Right organization?
In-house Outsourcing

9. Different solution to outsource the selling
function
Involvement level + services
Cost $
Sub-distributor /
Non exclusive
Exclusive
distributor
Exclusive
distributor with
marketing
budget
Full Market Management
Access outsourced
Trading
Relationship
providing Access
Wholesaler
Agent
model

10. Key benefits of outsourcing Mr. “Right”
organization vs. full-fledged own organization
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Speed
Financial
Limited HR challenge
Focus on brand-building
Flexibility
Quality

11. Saving time and accelerating launch
.No need to establish legal entity
.Limited recruitment
.4 months to launch with a distributor
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12. Various compensation models
Conventional model
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Innovative model
Revenues based on
market share company profit
Mixed model
Flat fee
for services
Mark-up/
Margin

13. Financial benefits
.Lower cost
.No upfront spending, “pay as you go concept”
.Less financial risks
.Easier to secure money collection
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14. Third-party need to be managed properly
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1. Market evaluation,
distributor selection
2. Appointment
.Legal,
Training
3. Management
.Goal setting,
Motivation,
On-going training
4. Termination

15. Changes in the retail environment impacting
the profile of the distributor
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Yesterday
• Unstable economy
• Fragmented trade
• Few local KAs
• Focus on
distribution, not
display
• Technical
distributor
capabilities
Today
• Maturing free
market economy
• Rapidly increasing
trade
concentration (top
10>50%)
• First international
KAs
• Competition
among retailers
• Focus on display
and distribution
• KAM required
from distributor
Tomorrow
• Growing economy
• High trade
concentration (top
5>50%)
• More international
KAs
• Free cross-border
trade
• Focus on display,
not distribution
• KAM skills as key
success factor

16. 5 key success factors to work with TPI
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Relationship based on
partnership and trust
1.
• Understand the role
of your brand
for the distributor
2.
• Clarify roles and
responsibilities
3.
• Share and align on
brand potential and plan
4.
• Strive for transparency
5.
• Educate your own
organization on specificities
of the go-to-market model
• Clarify roles and
responsibilities
• Share and align on
brand potential and plan
• Strive for transparency
• Educate your own
organization on specificities
of the go-to-market model
• Understand the role
of your brand
for the distributor

17. Misconceptions towards distributors
• They are an “intermediate step” until we reach critical mass
• They do not “own the business, they do not feel it”
• Their staff are not as competent or well trained as us
• Distributor margins are too high, these costs reduce our top line
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18. Conclusion
• Key to have a “Mr. Right” organization to ensure commercial
execution
• Often more beneficial to outsource
• Innovative and tailor-made
• Specific distributor management approach
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19. GRAZIE
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