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Some FMCG Sales Terminologies

Published on May 4, 2017

Golam Mohiuddin Follow

Divisional Sales Manager at Square Food &
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Beverage Ltd.
3 articles

Some basic FMCG sales terminologies for the freshers who are planning to start their
careers in sales:

FMCG: Fast Moving Consumer Goods, goods that moves faster from a retail outlet.

For example rice, dal, sugar, soap, etc.

Primary Sales: These are sales from the company to the distributor e.g. the amount of
product that a distributor purchases from the company. Normally Area Manager's and
Regional Manager's targets are set on Primary Sales.

Secondary Sales: These are sales from the distributor to the retailer. Usually, TM/TSM's
targets are always based on secondary sales.

Offtakes (Tertiary Sales): These are sales from the retailer to the customer. While offtakes
are not tracked by the company, trends of offtakes are tracked by some market research
agency like Nielsen.

Beat: This is the route that a salesman (DSR/SO/SR) follows on a particular day. For
example, beat on Saturday is Location X, and beat on Sunday is Location Y. If the salesman
visits his each beat on every alternative day, all the retailers/stores/outlets in his sales
territory will be covered in two days. Thus, he will visit the same outlet of his beat thrice per
week.

Numeric Distribution: The number (or percentage) of outlets where company's product is
present (outlets that have at least one SKU of a product) e.g. at how many outlets a
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company's product are available is measured by numeric distribution. 1 Try Premium Free
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Weighted Distribution: The percentage of the total sales volume that comes from the
served outlet.

Let's clear this by an example,

For example, you have 10 outlets in a beat, now out of these 10 outlets if your product is
present in 4 outlets then numeric distribution is 40%. If that 4 outlets contributes 75% of
your total sales, in that case weighted distribution would be 75%. Numeric distribution gives
you an idea of the reach of distribution whilst weighted gives you an idea of the quality of
distribution.

Stock Keeping Unit (SKU): This refers to a specific product from a range of product of a
company. For example, 100 gram Dettol original soap is an SKU of Dettol soap of Reckitt
Benckiser (Reckitt Benckiser has other SKUs of dettol soap like 50 gram Dettol soap, 200
gram Dettol soap, etc.).

DSR: Distributor's Sales Representatives are employed by distributors but managed by

TM/TSM; DSRs are the salesmen who are responsible to make sales of company's products
(SKUs) to retailers.

Wholesalers: An outlet of a beat is considered as wholesaler if that outlet contributes more

than 50% sales of that particular beat (this assumption may differ for different companies).

Modern Trade: Super shops who mainly sell to premium customers e.g. Agora, Swanpa
etc. (Modern Trade is managed by the dedicated sales channel)

Trade Schemes or Trade Promotions (Widely Known as TP): These are schemes that are
given out in the market to boost sales from time to time. Trade Schemes are designed for the
trade i.e. Retailers/Wholesalers and the Distributors.

Trade Promos are of two types:

Quantity Purchase Schemes (QPS): To inspire the retailers to buy more, sometime
company offers QPS.

These typically look like this: Purchase of 144 pieces at a time and get 8% discount

Basically these are discounts offered on purchasing a particular quantity of products.

Value Purchase Schemes (VPS): These are same as QPS, the only difference is that these
are offered on value purchased instead of quantity.

These would look like this: Purchase of Tk 10,000.00 at a time and get 8% discount.

These are discounts offered on purchasing products of a predefined value.

Trade schemes are further divided into two types depending on who they are offered to: Messaging
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Primary Schemes: These are those that are deducted while the invoicing is done to the 1 Try Premium Free
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distributor from the company’s end. This may be done to give the distributor an additional
margin.

Secondary Schemes: These are those which the distributor is supposed to first extend to the
market as per company declared trade scheme and then claims it back to the company.

ROI (Return of Investment): This is calculated on monthly/quarterly/yearly basis to

understand distributor's profitability. ROI calculation is very important as it is a tool to
negotiate with your distributor to manage/deploy required investments.

The equation is simple: ROI= Return/Investment, Return = (Earnings – Expenses).

FOC: Free of Cost (Goods offered as free). Sometimes company offers FOC goods to
retailers as a part of special promotion.

Display: This refers to Shelf of an outlet that a company pays for (can also be a floor
standing unit (FSU) in Modern Trade). Company usually hires shelf space of an outlet on
monthly rental basis to display its products.

Strike Rate or Productivity: It is the % of all successful sales calls out of total calls made
by a DSR. This is generally measured on daily basis.

Other Popular Terms:

EC: Effective Coverage, PC: Productive Call, LPC: Lines Per Call, LPD: Lines Per Day,
LPM: Lines Per Month, LPI: Lines Per Invoice, KPI: Key Performance Indicator, TBTL:
Time Bound Trade Load, DLTL: Display Linked Trade Load, NPLP: New Product Launch
Process, CP: Consumer Promotion, CO: Consumer Offer, L&D: Leakage & Damage, DD:
Direct Distributor, SD: Super Distributor, OSDP: Out Stationed Distribution Point, JC:
Journey Cycle, TMR: Town Market Report, Discounts: Primary Discounts, Secondary
Discounts, Cash Discounts

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varun saxena 2h
Territory sales officer at Hindustan unilever limited

Sir plz define effective coverage in simple terms …see more

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Abhijeet Gupta 2h
Student at XLRI, Jamshedpur

Sir, how can I benchmark numeric distribution? What are the factors affecting it? …see more
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Golam Mohiuddin
Divisional Sales Manager at Square Food & Beverage Ltd.

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