The Stock Check System

The Stock Check System

The Stock Check System

The importance of adequate shop distribution of the product has already been emphasized. The ONLINE MARKETING Manager, who achieves a good level of sale if his brand into retail outlets, cannot be sure of the success of his ONLINE MARKETING plan unless he can also establish the level of sale to consumers which is being achieved by the retailer. If he is to control the distribution of his product, he must know the pattern of consumption which has been achieved. This means having a method of checking the quantities of his brand bought and resold by retailers over a given period.

This information is available to him by means of the Retail Audit systems conducted by the Nielsen organization and by other exponents of distribution research. The basis of this research is the establishment of representative panels composed of many hundreds of retail outlets-independent shops, multiple and co-operative stores-throughout the country. It is a syndicated service, providing statistical information on the movement of all products which are of interest to subscribers by brand, size and quantity.

At agreed intervals (usually every two months), auditors of the research organization call upon each retail outlet in the panel. A check is made of the stock held in every brand whose manufacturers subscribe to the service. A note is also taken of all deliveries made of these goods during the two-month period. The following calculation is then carried out:

A. opening stock of each brand;

B. plus deliveries made of each brand during the period under review;

C. less the stocks held at the end of the period.

The final figure represents the sales made of each brand to the public during the relevant period. If the final stock figure is then divided by half the sales figure, the answer provides the number of months' supply of each product held by the retailer concerned.

Working to the same premise we examined in the case of market research, namely, that what happens in the control panel-because it is representative of its universe-must be true for the whole country, the research organization provides for its subscribers a set of statistics giving the following information:

1. The percentage of all the retailers in the country who stock each of the brands which have been checked.

2. The number of these retail outlets which currently hold stocks of these brands and the number which are currently out of stock.

3. Listed under each product field are shown the percentage of purchases made and stocks held of each competing brand and the sales made to consumers during the period under review.

4. Figures are provided of the average sales of each brand per outlet.

5. The number of months' supply of each brand stocked by retailers is shown.

The value of the Retail Audit to the ONLINE MARKETING Manager will depend upon the use he makes of the information it provides. He must assess the underlying factors indicated by the statistics. The great value of the audit is its continuity. At regular intervals of two months he is given a picture of the situation, not only of his own product, but of that of competing brands. In particular, the figures will indicate:

A. where distribution density is low;

B. the effect of competitors' promotion schemes and other merchandising activities on the movement of his brand;

C. the effect his own promotional activities are having on competitive brands.

A poor distribution result in any particular region will show up immediately from the audit figures. Sometimes, the ONLINE MARKETING Manager will be surprised by the degree of penetration achieved by competitive brands in areas where his own distribution is low. Obviously, he will look first at the sales effort being devoted to those areas; but this may not be the whole story. We have seen the importance of advertising in promoting consumer interest in a brand and the effect which this in turn has upon the propensity of retailers to stock the product. The cause of the weakness may, therefore, be insufficient advertising.

On the other hand, there may be resistance on the part of the retailers because they may not be happy about the presentation of the product. The point-of-sale material provided for their use may be unsuitable for these particular outlets.

Ambiguities of this kind should be investigated and the main value of the retail audit is that it pin-points for the ONLINE MARKETING Manager areas of weakness in his ONLINE MARKETING strategy.

From the retailer side, too, there has been a growing tendency for the use of statistics to assess the movement of branded products. Branch managers of the larger multiple concerns are given information on the gross margin earned by each product per square foot of shop space allocated to it, together with details of its shelf movement and shop stocks. Using these figures as a guide, it has been possible to plan the placing of orders more effectively.

Next - News Choice of Advertising Media