Streamlining sales & distribution: the BATB way, an analysis of stock rotation phase of project accord

Abstract

The 2013 act amendment was scheduled to bring in some drastic changes. The new law adds to the 2005 acts and forbids the use of imageries or any kind of descriptors in the outlets. In an increasingly dark market, BAT recognizes that the future of the business lies with the Trade Marketing and Sales & Distribution function. BATB has developed a unique sales and distribution model to ensure maximum reach and off-take the brands from the retail outlets to gain the competitive edge. Cigarettes have a shelf life of only 4 months. But it falls to only 3 months in Bangladesh because of the humidity. The freshness of a cigarette is determined by checking whether the stick is damp or not. Smokers consider it as a very important factor. DTI lost its market leadership in the low cigarette segment in 2011 because they failed to clear the stock of cigarettes at retailer’s end before the budget period. As a result, there was a huge amount of their damp stocks of cigarettes in the market and consumers turned away from their brands. Furthermore, they failed to take back their Quality Complaint product, for which the retailers stopped lifting their products. They still haven’t been able to retrieve the leadership in low segment which was once their private property. In 2018, BATB was facing a similar kind of challenge. From the beginning of the year, the C&Cs (wholesalers) and big retailers have started to hoard the brands of BATB. To offset the losses they have incurred, since there was no change in price at the Premium, Aspirational Premium and Value for money segments. As a result, there was an artificial price increase due to speculation at small retailer’s end which the C&Cs (wholesalers) capitalized on. To combat this BATB launched Project Accord and supplied the market with more actual demand. The price of cigarettes stabilized but the market was flooded with cigarettes which could have resulted in damp products at the market. To maintain the freshness of the products, BATB launched the Stock Rotation phase which was named Project Accord. The theme of the project was to change all the products of Graphical Health Warning – 4 with the products of Graphical Health Warning – 5 and to avoid the mistake that cost DTI their leadership. This was also to avoid QC product from being delivered to the end consumers. The whole project and its results at Barguna Territory is highlighted in this report along with how Trade Marketing and Distribution functions were implemented while executing the activities of the project.