Summer Behavior in UAE.-Aaliya Mohamed (AUD4537) Statement of the

    Summer Internship on: Evaluate FMCG product distribution and Employee Behavior in UAE.-Aaliya Mohamed (AUD4537)              Statement of the ProblemEvaluate FMCG product distribution and employee behavior.IntroductionEver wondered why companies spend so much on product planogram and visual planograms in retail? To answer this, we need to understand that what is retail visibility and what effects it has on the brand.Most of the market leaders are now making efforts to enhance the visibility of retail outlets. They are thinking of creating retail displays for their products while focusing on brand image and communicating product features and characteristics. Idea behind this is to stand out in the retail with a competitive edge.You might have visited a mall on a bright spring day in search of an outfit for a special event. As you pass multiple stores, you saw an outlet where merchandise grab your attention that shouts “Sale” so you are drawn through the store. As you pass through the store you are amazed that how the red blue & yellow color schemes are matched in a way that each color complements the other one giving store a classy look. While scrolling through few outfits you saw different mannequin wearing a well-coordinated outfit, layered with matching merchandise. That’s it, you ask the executive that you wanted to try the complete outfit of the mannequin. As you leave the dressing room you make a decision to purchase all the items including the matched jacket. However, you were not there to purchase the jacket. So they implemented the retail visibility strategy & not just the visual merchandising. He influenced the walk-ins to enter into the store, followed by impacting his sub conscious mind with the multiple color combinations & patterns of outfits which directly attracts the customers. It enables sales of those items as well which customers were not willing to buy earlier.Distribution channels are pathways along which products travel from producers and manufacturers to ultimate consumers. They are routes along which products, information, and finance flow. While some manufacturers deal directly with their customers, most manufacturers use a distribution channel to take products to consumers. Considerable thought, effort, and investment are required to create and maintain a distribution channel. Channel margins and the expense of sales efforts in managing channels can form a substantial proportion of total marketing costs. An effective channel can be a source of strategic advantage for companies. Channel design and channel management are therefore important elements in a company’s competitiveness. Channels are also important from a public policy perspective since they employ a large number of people and are critical to the unhindered availability of food items and other products to customers across the socio-economic spectrum. Although channels are very important, little research exists about UAE distribution channels.  Review of LiteratureBeing in retail industry for three years now, proper distribution of products and services is a challenge. As you know, Dubai is a competitive and ever changing demanding market and every other day new brands, better competition, profile, goods and services keep emerging in the retail market and that’s where our challenge lay. In FMCG retail outlets, the visibility or the space is purchased from the outlet where you display your goods, numerous SKU’s and brands. But unfortunately, another competitive brand acts like a parasite and tries to capture the visibility space your company has payed for. That’s unfair! Isn’t it? Well, anybody would agree to it but nobody takes an action. As I said earlier, Dubai is a competitive market, thus with each emerging brand, FMCG retail outlets cannot keep on increasing the space and hence is a disadvantage for companies like mine where they shrink our space and give it to the competitor. Even though we payed for it. Thus, we need to go there as mystery shoppers and check the availability of all the items, check how the merchandisers are keeping the products and whether they are following the planogram or not. Otherwise known as Plano’s, shelf space plans, schematics or POG’s, a planogram is a tool used in visual merchandising. It’s also a model or diagram that indicates the placement of retail products on shelves as well as the number of facings each product should be allocated. And don’t forget the fact that planograms can dictate the layout of your store. All the SKU’s are available on shelf or not, if not then why not? Are the fast moving goods kept at eye level for the customer, is full shelf properly stocked or not, is there extra stocks kept back store for the fast moving goods or not and a variety of other factors like merchandiser behavior with the customer and all.The amount of space or facings a product is allocated has a significant impact on the sales of your products. It is thus imperative that the products which are both popular and profitable are given enough space allocation on the shelf. A sure fire way of ensuring this happens is through the use of the right data.If the space allocation is done right, the shelf space will return the highest profit. On the other hand, when this principle is not fully leveraged, the cost to you as a retailer is significant since it affects everything from your sales to out of stocks.Thus by this research we will review how distribution works and what methods to approach in order to evaluate the distribution.    Methodology/Methods/ApproachMystery Shopping: A method which provides interesting results for clients who wish to measure their employees’ performances or gain a picture of their product distribution.We always select mystery shoppers according to the profile required. Blend in as regular shoppers, they give life to specific scenarios to test the promoters behavior.The objective is to measure employees’ professionalism /training level, support promotions, check store cleaning and efficiency level, catalogues and advertising materials display, price and discount applied, product availability, observe competitors’ price policies and behavior. Data collected is registered on a check-form after the visit and later uploaded as an online assessment or discussed with someone at a managerial or top level. If a company wants a good return on its mystery shopping then they need to think like a scientist. That’s because mystery shopping isin fact a scientific study. It’s designed to test a company’shypothesis about the in-store experience by collecting unbiased, unambiguous data. To ensure validity of results, the entire process is subject to strict controls and guidelines such as:>Mystery shoppers must be qualified, objective, well-trained professionals.>Mystery shopping criteria must reflect the companiespurpose for the study.>Mystery shopper survey questions must be designed to elicit clear, precise, measurable responses.Is the visibility/distribution, products or procedures, or the pace of the operations negatively impacting sales? Responses to questions like these will shed some light.Was every item you wanted to purchase available? If NO, please list unavailable item(s).Did all perishable merchandise (salads, sandwiches,etc.) appear fresh (not brown/old)?Observe 5 dairy/perishable items (sandwiches, salads, fruit cups, yogurt, milk, etc.). Were all items that were checked for freshness found to be within code (not expired)? If YES, please specify the product for any items out of code.Were the products well stacked as per the planogram? Did the merchandiser/promoter treat you well, answer your queries?Were any damaged products displayed on shelf?    Result findingsScenario #1: Was every item you wanted to purchase available? If NO, please list unavailable item(s).Answer: No, Many SKU’s of Shan brand were out of stock like biryani masala, chicken tikka masala, dhal masala, 1 kg of India gate rice, 10 kg packing of Aashirwaad aata. Rest all items were available from the list I had wished to purchase.Scenario #2: Did all perishable merchandise (salads, sandwiches,etc.) appear fresh (not brown/old)?Answer: Eggs which were displayed on bottom shelf were not clean, some only had a weeks expiry on wherein it should be two- three weeks in a minimum. Near expiry eggs were sold at the same price and the longer expiry ones. No promotional offer was availed on them. Some packing of eggs were opened and were still kept on display. Breads and sandwiches were okay and seem fresh. Scenario #3: Observe 5 dairy/perishable items (sandwiches, salads, fruit cups, yogurt, milk, etc.). Were all items that were checked for freshness found to be within code (not expired)? If YES, please specify the product for any items out of code.Answer: Three pieces of cheese had fungus on them which was still displayed on shelf and any consumer was likely to purchase it including me. Milk which was only two days left for expiry was still displayed on shelf. Cake was damaged but still displayed, Rest of the items were okay.Scenario #4: Were the products well stacked as per the planogram?Answer: No, the fast moving items were displayed at lower level and slow moving goods were displayed at eye level. Promotional offers were displayed on top shelf whereas it should be displayed in the promotional pallet. And many SKU’s on the lower level only had one or two pieces left and merchandiser had not stocked the item. Scenario #5: Did the merchandiser/promoter treat you well, answer your queries?Answer: Promoter was not on her place. She had gone on break at the wrong time and not displayed an on-break template on her stand. She came fourty-five minutes later and was not interacting with the customers, I approached her later and asked about a few technical details about the product wherein she rejected saying she didn’t had an idea about it. She didn’t greet me and wasn’t properly dressed, she was wearing sports shoes instead of formal ones.Scenario #6: Were any damaged products displayed on shelf?Answer: Damaged packing of biscuits was displayed, Opened pack of detergent was on shelf and the detergent was scattered all around. Chicken franks had a lot of glazing and so did whole chicken, fish fillet and chicken breast but they all were displayed on shelf.Outcomes Scenario #1: Sales executive should visit the retail store every alternate day to have a stock count and order items accordingly which will result in less items getting out of stock. Also salesperson should check the fast moving items and order more stocks for it i.e. Chicken biryani is the fasted moving item.Scenario #2: If the customers by chance pick up the near expiry eggs and check the dates and realize that what they are paying for is not the very fresh items then they might stop buying that brand of eggs in the future and it is a very big disadvantage for the company. They might as well do negative marketing about it to their friends and fellow relatives. Hence, merchandisers should be very careful with the display and the top level manager should approve some special prices for the near expiry goods.Scenario #3: This was a very bad point for the company. If a customer purchased some item with fungi on it and found out later when he arrives home, high chances are that he will complain to the food and security department and the company with end up paying hefty fines on it. Moreover, the retail store might as well ban that SKU from the company for selling it to the end consumers or charge fines on irresponsible and careless behavior. Every morning first thing the merchandisers or promoters are supposed to do is check the expiry, look , of the goods whether its properly tidy , clean and ready to sell.Scenario #4: If the fast moving goods aren’t displayed on eye level then it might affect the company’s sales in millions because customer doesn’t have that much time to search for a product which isn’t very easily accessible even when it’s available. And if their slow moving goods are kept on eye level then it won’t do any good to the customer as customer won’t buy it. Also promotional offer should be displayed with the bundle offers on pallet. If they are kept on top then no one might pay attention to it. These are all minute details which if not taken care of could return in huge loos to the company.Scenario #5: Promoters are being paid hourly and if they aren’t working hard for what they are being payed for then what’s the point. It might happen that some really curious and willing buyers would want to seek knowledge about the product and the demo which she is giving but wasn’t possible due to her absence. Thus only smart, hardworking individuals should be hired who are willing towards the betterment of the company. And it’s important that they are briefed with all the details about the product because if the customer has some queries and they are not able to answer confidently then they might lose the customer. Scenario #6: Damaged products again do negative marketing for the company. Merchandisers think that those products might be picked up by some consumer during a busy shopping day but it never happens. Thus, it’s better to make returns of such products rather than spoiling the visibility of the shelf altogether.ConclusionsBeing a mystery shopper is more than just going to a store, buying something, and reporting it back. You have to have a keen sense of observation skills, a good memory, and of course, you have to play the part. But do not fret. You don’t have to be an actor to accomplish the different tasks. Some of the tasks are things that you already do as a normal citizen like ordering food, opening a new bank account, etc. On some assignments, you will be asked to write down or bring a recorder so you could record the transaction. There are no essential requirements to be a secret shopper, as shoppers don’t have specific appearance or qualification. Those who have a flair and passion to enhance the customer service and the quality of the product can plunge into secret shopping. Mystery shopping can be used to monitor and measure service performance and to see if standards are met. At the moment, that responsibility might fall to individual merchandisers or promoters, but they might be so familiar with their shelfs that blind spots have formed. Mystery Shopping allows you to get the big picture as well as the individual specifics from each product, region, store, or even individual employee. Once you’ve got those reports, you can act on them to increase efficiency. This is a good chance to get an unbiased review because the employees have no idea they’re being evaluated and they would act as they normally do every day. The feedback that comes from the mystery shopper can be useful for market research. It can help in knowing what areas of their business needs improvement, thus closing the the “gap” between the promise of businesses to its consumers and how well the actual performance is living up to their promise.A store manager keeps a vigil on his employees while they deal with the customers in person and over the phone. This often makes the employees nervous and they become inadvertent under pressure. Instead a mystery shopper brings out the true picture of the employees as they perform naturally. This helps to locate the fault and the drawbacks of each and every employee perfectly which subsequently helps in improving customer satisfaction. Sometimes the customers inquire about the products over the phone before coming to the store. In this situation, the employee’s ability to converse with them over the phone, in order to convert the caller into a potential customer, matters the most. To locate the faults of the employee, some fake calls are required, and only a mystery shopper can do it. A store can avail the same kind of services provided by the companies for the product distribution and marketing. 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