Why Route-to-Market Strategy Matters for FMCG Success

What is Route to Market in FMCG?

In the Fast-Moving Consumer Goods (FMCG) industry, “Route to Market” (RTM) refers to the journey products take from the manufacturer to the end consumer. This journey involves every intermediary, such as distributors, wholesalers, retailers, and direct-to-consumer (D2C) channels, that plays a role in moving goods through the supply chain.

A well-structured route to market is essential for ensuring product availability, competitive pricing, and timely delivery, particularly in fragmented and demand-driven markets. Without an effective RTM model, even the best products may struggle with poor visibility and suboptimal sales performance.

Route to Market Strategy for Consumer Goods

Crafting a Route to Market Strategy for Consumer Goods

A Route to Market (RTM) strategy for consumer goods is a detailed plan that outlines how a company delivers its products to customers across different markets. It encompasses the following key elements:

1. Channel mix decisions: This includes options like traditional trade, modern trade, and direct-to-consumer (D2C).
2. Distribution partnerships and terms: Establishing agreements with distributors and setting the terms of the partnership.
3. Salesforce deployment and territory alignment: Effectively organizing the sales team and assigning territories for optimal coverage.
4. Logistics and warehousing infrastructure: Building the necessary logistics and storage facilities to support distribution.
5. Retail execution tactics: Implementing strategies for merchandising and promotional activities at retail locations.

For consumer goods companies, a successful RTM strategy goes beyond just logistics; it serves as a competitive advantage. It aligns brand objectives with market realities, ensuring effective market penetration, broad customer reach, and enhanced sales efficiency.

Read more for retail success: Instore Retail Execution Suite: Elevating Field Operations

What is Route to Market in Sales?

Route to Market in Sales: A Revenue-Driving Engine

In sales, the Route to Market (RTM) outlines how sales teams connect with and serve customers in their designated territories. Key components of this process include:

• Identifying sales channels and account types
• Defining go-to-market strategies for different retail formats
• Structuring Salesforce activities, including direct and indirect approaches
• Utilizing data to enhance coverage and productivity

Effective RTM strategies are especially crucial in emerging and high-growth markets, where field execution, territory coverage, and channel-specific incentives have a direct impact on both sell-in and sell-out performance.

Components of an Effective RtM Strategy

Market Segmentation

• Categorize consumers based on factors such as income, behavior, geography, and shopping habits.
• Helps in tailoring the RtM strategy to address the unique needs of each segment.

Channel Strategy

• Select optimal channels including general trade, modern trade, e-commerce, or direct selling.
• Understand the relevance of each channel in urban, semi-urban, and rural contexts.

Distribution Network Design

• Build a responsive and scalable distribution system.
• Decide between direct distribution, hub-and-spoke, or hybrid models depending on reach and efficiency.

Sales Force and Merchandising Strategy

• Allocate sales reps and merchandising resources in high-potential zones.
• Use Salesforce route planning tools and mobile apps to enhance productivity.

Trade Marketing and Promotions

• Design schemes and promotions to influence trade partners and consumers.
• Monitor ROI on trade spends and optimize allocations.

Performance Metrics

• Establish KPIs like numeric and weighted distribution, outlet coverage, in-store availability, and market share.
• Use dashboards and data visualization to track and refine performance.

Get more insights: Primary vs Secondary Sales in 2025: Tracking, Markets, and Inventory Planning Explained

Why RtM Strategy Matters in FMCG

1. Faster Market Penetration

With the right RtM model, FMCG firms can enter new geographies swiftly and efficiently. Micro-distribution and van sales models have enabled brands to reach last-mile retailers in rural areas.

2. Increased Efficiency and Lower Costs

Optimizing delivery routes, warehouse locations, and inventory levels ensures leaner operations. Better forecasting and demand planning lead to fewer stock-outs and lower carrying costs.

3. Stronger Retailer and Distributor Relationships

An RtM strategy that includes transparent communication, real-time data sharing, and joint business planning builds long-term trust with channel partners.

4. Consumer-Centric Availability

An effective RtM ensures product presence in outlets that your target customers visit frequently. For instance, impulse categories like beverages and snacks must be available across diverse micro-markets.

5. Better Adaptation to Market Dynamics

RtM strategies help companies quickly respond to changing consumer behavior, competitor activity, and seasonal trends.