Maximising Channel Productivity in Semi Urban and Rural Areas

current receivables management policies

Client Challenge

One of the largest, Indian pharmaceutical companies was following a strategy of acquisition led growth, which resulted in an uncommon and overpopulated distributor base with varying credit policies being followed across divisions. This resulted in an increase in the company’s cost to serve its distributors and unhappy distributors due to loss of market share and limited market reach of the company across its seven divisions. The client required assistance in improving return on sales effort and increasing market reach of each of its seven divisions in existing locations, especially in semi-urban and rural areas

Our Approach

To rationalise distributor base and maximise channel productivity, UC Strategy adopted the following approach:

  • Developed a distributor classification framework and classified distributors nationally and for each division into Class A, Class B and Class C, based on a set of parameters and overall ratings
  • Recommended key initiatives to address the channel management issues and increase market reach
    • Rationalise Distributor Base
    • Identified the number of distributors that could be rationalised across seven divisions, with negligible impact on sales
  • Outlined a 3-phased approach to implement the rationalisation initiatives
    • Defined stringent credit policies to facilitate implementation of Phase-1, Phase-2 and Phase-3
    • Obtained Market Potential Value (MPV) for each state and district in India
  • Calculated MPV for each town in India, based on the population figures
  • Mapped distributor presence in existing locations
  • Defined methodology for appointment of distributors in existing and new locations for increasing market reach of seven divisions

 Our Impact

The client achieved increased channel productivity, and gained a better understanding of definitions of credit policies and increased market reach by evaluating potential of various states and appointing distributors in existing and new locations.

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