Lizeo Group
Data Blog by Lizeo
A panel is an essential tool to understand the market in order to reflect the reality of the distributor’s sell-out market. In a supply chain as complex as that of tires, it is crucial to implement a panel. In this context, panellists play a key role - that of collecting, processing, unifying and consolidating data. This task provides a response to the different challenges facing tire manufacturers and distributors. What are they, and how do you use panel data to your advantage?

Sell-insell-out: what is the difference?

"Sell-in" refers to sales made to a tyre manufacturer's B2B customers (wholesalers and distributors).

"Sell-out" refers to sales made by a distributor to its own customers (potentially final consumers).

Challenge n° 1: monitoring performance

Suivi des performances

Distributor side

panel is a tool to manage a distributor’s performance in the market, as well as being an excellent analysis tool. Panels provide the distributor with complete and efficient performance monitoring which allows it to measure its competitiveness and get a better understanding of the market in which it operates. Grouping all of this data will then allow the distributor to see where its performances are best (segment, brand, etc.) and what must be improved.

Panels also measure the efficiency of certain marketing actions (advertising campaigns, special offers, etc.), with respect to the competition. From a strictly operational point of view, the distributor will use this tool to manage its offer at the sales outlet, its prices, and even the organization of work in sales outlets.

Finally, through the panel, a distributor will be able to determine its contribution to the sales of a brand - information that can be a valuable resource during negotiations with the tire manufacturer.

Tire manufacturer side

For the tire manufacturer, this monitoring is essential: this tool will allow it to measure if its brand products perform well in the market (analysis of sales volumes, overall market share and by segment - sizes, price, etc.). If there is a loss of performance or in the event of competitor actions, this essential information will allow it to identify levers to progress and respond precisely.

Tire manufacturers have often managed their sell-in through a push effect, i.e. pushing their products with distributors without taking their sales into account. Problem: it has quickly become obvious that the push lever alone will no longer allow manufacturers to develop and gain market share. In question? The sell-out market is now the crux of the matter, and manufacturers do not have complete control of it.

To reverse the trend, the objective is to trigger a pull effect with final customers, which means influencing the choice of customers so that they demand the brand’s products from the distributor. This is only one of the possible strategies - many more are available to help control the sell-out.

Challenge n° 2: a better market understanding

Compréhension du marché

Distributor side

Panels give the distributor access to a better understanding of the market and its trends. The panel is therefore an essential tool for the Category Manager, insofar as detecting opportunities (for example, a growth segment or increase to market share).

Another key indicator: the average sales price. Through this indicator, the distributor will understand how its prices are positioned compared with competitors so as to re-adjust them, if necessary.

Tire manufacturer side

Extracting market insight will allow the tire manufacturer to identify the development areas for its offer. By identifying major market trends, the tire manufacturer will be able to anticipate what the sell-out market will be. Result: it will be able to offer its customers products which will be in high demand in the future and also develop its sales.

Product, price, volumes, etc. The tire manufacturer must understand the workings of its market to make relevant suggestions which will allow it to align its offer with the demand of the sell-out market. A poor understanding of the demand and the market can have several repercussions: too much inventory, re-positioning of prices, loss of attractiveness, etc.

Control the sell-out to better manage its sell-in: a key issue for the tire manufacturer

Sell-in Sell-out
Don’t forget that tire manufacturer’s customers are wholesalers and distributors. Tires are sold to these players in sell-in, whereas distributors sell-out to their final customers. Remember: at the start of the chain, the tire manufacturer must know the sell-out to manage its sell-in.
This data, which comes from the panel, will allow the tire manufacturer to study the major trends. However, it must couple it with additional information from the eco-system (inventory information, for example), to draw relevant conclusions.
As an example, let’s take the Michelin Alpin 5. If, over a given period, the sales of the latter slow down considerably in sell-out, there may be two main reasons.
  1. The demand has changed: sales have perhaps moved to a substitution product, like all-season tires. In this case, it will be necessary to review the product offer.
  2. There is a blockage at the distribution level (inventory volatility).
Again, price data is of utmost importance. The data collected on this subject allows the tire manufacturer to set the right price - the one that not only corresponds to market trends, but also the margin required by the different players of the distribution chain.
good knowledge of its sell-out market gives the tire manufacturer a major advantage. It will be able to support its arguments in relationship with its own customers, while acting as a driving force, in order to help its customer develop its sales. If the tire manufacturer’s customer develops its sales of the brand, it will also develop its sales and may gain market share.

Where the tire manufacturer will try to drive its product development plan, the distributor will aim to optimize its range. The challenges facing these two players are different but overlap on one point: the management of performance through the panel. A powerful marketing tool, essential to measure performance, the panel provides a practical and strategic basis to establish and justify actions. However, the involvement of a data expert only makes sense if it is initially conditioned by a detailed analysis of your needs and objectives. It is up to you to define the needs and choose from the different types of panels that are available. Do you need help reviewing your situation?
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