Be careful what you wish for.
The channel-mix is the litmus test of profitability.
Here is what I've learned and my advice:
Very often, a brand in a new market struggles with sales.
Usually a wrong target-setting has made your budget unreachable.
Chased by stakeholders one goes for the "easy fix":
At first sight, a modern off-trade seems to work, let's push more.
One goes for the catch 22:
- deeper price promo
- more often promo
- both (bingo!!!)
Volumes in modern off-trade grow like magic, becoming the main channel in the mix...
Sooner or later someone will analyze those SKU and channel margins...Oops: the more we sell the more we lose...
Why did it only seem to work?
Because you were subsidizing your volume growth with marketing budget. You were buying volume.
It doesn't matter if that was marketing, trade marketing, or sales budget. Left or right pocket are still the same trousers.
Off-trade is often seen as the volume saver.
Right, but it can also be a value drainer.
Challenge those targets.
Think wisely before chasing quick volume in modern off-trade.
Brands are built bottom up, not top down.