P&G REVAMPS SALES FORCE;MORE EMPHASIS ON CUSTOMER-SPECIFIC SALES TEAMS

By Published on .

Most Popular
Procter & Gamble Co.'s sales force restructuring unveiled last week could mean more account-specific promotion and advertising, but also could let P&G competitors make inroads in category management, industry analysts said.

The restructuring increases emphasis on the sales team working directly at the headquarters of individual retailers in representing all of the company's products and reduces the size of the more category-specific field sales staff. Those familiar with the plan said it will affect P&G's top 100 retail accounts in 1996 and the top 500 accounts by 1997.

P&G will cut up to 500 jobs and convert many full-time sales representatives to part time. A P&G spokesman said the company also would use contractors and telemarketers for duties now handled by full-time sales representatives.

The restructuring reflects retail consolidation and more decisions being made at headquarters rather than store level, a P&G spokesman said. It will reduce costs, but wasn't done for that reason, the spokesman said.

The sales force "was really too big a cost for Procter when they could reallocate those resources into direct and database marketing and [advertising] agencies with more efficient co-marketing through corporate chain customers," said independent New York industry consultant Burt Flickinger.

Top retail officials briefed on the restructuring expect increased trade promotion as a result, Mr. Flickinger said. Retailers won't see bigger allowance checks, but still value what P&G appears ready to invest, he said, "particularly in direct and database marketing, where it would cost [retailers] so much more to do it" themselves.

The reorganization is a logical step as P&G places greater emphasis on co-marketing, said Christopher Hoyt, principal of Hoyt & Co., Stamford, Conn., P&G's co-marketing agency of record. "They are starting to view the store as a communication channel, much like television or radio or print," Mr. Hoyt said.

"Most of [P&G's] competitors will try to follow them, as they did in brand management and in so many other cases," said Gary Stibel, principal of the New England Consulting Group, Westport, Conn. "And because Procter will have been the first and .*.*. one of the best, most of their competitors will lose more share."

Mr. Stibel and others said the move puts pressure on P&G's sales managers to handle category management for 1,000 SKUs with a smaller field-level sales force. More specialized competitors will likely make a case for taking over category management leadership from P&G, Mr. Flickinger said.

Mr. Stibel also expects some competitors to go in the opposite direction and pay more attention to "detail at retail."

Pat Sloan contributed to this story.

In this article: