PERF RMANCE 04 - The Performance Portal - Ernst & Young

Given this situation, organizations
need to relook at their “distribution
equity,” i.e., their ability to drive market
share performance through their
distribution network.
The various elements that need to be
addressed while evaluating and leveraging
a firm’s distribution equity are shown in
Figure 1.
Background
Figure 1. Factors affecting firm’s distribution equity
Client: a top three agricultural equipment
manufacturer in India, facing deteriorating/
stagnating market share in some key states
in India.
The root cause identified during the initial
assessment was an ineffective channel, i.e.,
the inability of the company to drive sales
in line with market growth.
Distribution structure
Deployment of the distribution network structure
Distribution funding
Presence of adequate network funding to enable
flow of credit as required
Market coverage
Effective coverage of the markets allocated
Additional sales
enablers
Enablers including BTL activities, advertising, pricing mechanisms
Each of the elements mentioned typically
gets addressed as part of separate
functional structures (sales, marketing,
dealer development/management,
finance, etc.) and consequently do not
get adequate attention as part of an
overarching strategy.
The remainder of this study looks at how
the various elements of the distribution
equity of an Indian manufacturing company
were addressed as part of an initiative to
yield significant improvement in marketshare
performance.
Competitive environment: the existing
Indian market consisted of a large number
of domestic and international players
comprising well-entrenched market leaders
and aggressive new entrants.
How we addressed the challenge:
we carried out a detailed assessment
(see Figure 2) of our client’s existing
performance structure, evaluating
both brand and distribution equity. We
conducted in-depth primary interviews
with more than 750 respondents
comprising customers (farmers) and
influencers (bankers, NBFCs 5 , competition
dealers, etc.) to identify the key areas for
improvement.
5 Non-banking financial institutions