A Review of the Food & Beverage Sector – Part 4 (First posted 2020)

Partners are just sales opportunities

These eight relationships were viewed remotely via a local consultant and hence detailed information was not available. However, the characters of the teams were very clear and it was obvious that collaboration was far from their minds. The consultant was amazed at the power of our investigation and the insights we are able to reveal.

Manufacturers & Retailers 2009

Background

In this section we describe 8 ASEAN relationships between manufacturer’s key account managers and their retail customers. We have used a story telling approach to highlight the key features of these relationships. Their overall relationship performance is compared in the chart below.

It was the end of the fiscal year. I was wandering through the very exclusive Galactic Hotel when I happened to notice a couple of parties going on. Corporate hospitality was obviously flowing freely, or so I thought but, on moving a bit closer I overheard the following conversation snippets:

Party 1

KAM Team getting drunk, noisy, whooping it up:

“It’s been a good year! We’ve done great! We’re in line for the company prize; bonuses on the way. Who’s buying the next round? Customers? Where are they? I’m sure they’re here somewhere.”

Customers sitting in a dark corner looking very cheesed-off:

“Dunno why we’re here, they always ignore us. They don’t listen to what we say on a good day far less for when they’re having fun which is almost always. Our goods arrive late, sometimes damaged. Look at all this money they’re spending, we clearly need bigger discounts.”

Party 2

KAM Team looking morose; keep peeking at their watches to see if they can leave yet; drinking orange juice and still water:

“The customers seem to have the whip hand here. They’re always demanding more margin and our management kowtows to them. We should have back-up but it never comes. Fred and Amy are counting down their notice period. Think I’ll look around as well.”

Customers whacking into the lobster and smoked salmon, steadily working their way through the cases of champagne, faces are red, voices raised, laughter raucous.

“Ah it’s been a great year. Profits are up and we’ve been squeezing some great margins out of these guys. The salesmen keep whingeing but they are only thinking of their bonuses. They don’t seem to realise that we are the ones who have to take flak for their iffy products. Open another bottle Paddy, they’re footing the bill.”

‘Party Culture’ Conclusions

Relationships that are treated solely as sales opportunities and managed by an approach that categorises its customers according to revenue generation ability can result in poor collaboration from both sides and self-centred behaviours. Relationship management is the management process for co-ordinating all the business activities that are essential to the success of a joint/multi-party endeavour. Collaborating organisations work together to achieve objectives that satisfy all partners’ needs. This was not happening here.

“We feel that our suggestions are not taken into consideration.”

“The quality of packaging is not good when the product reaches us.”

“Other companies give us better discounts.”

“We are unhappy with the reward system which demotivates us from improving the relationship further.”