4 What actions are needed to straighten out the ‘matrix twist’?

CleanCo is a Polish manufacturer of cleaning products that serves the European grocery retailing market. CleanCo currently segments its customers on the value of customer accounts. The primary division is between national accounts, for which 10 accounts constitute 70 per cent of sales by value, and field sales, which comprise a long ‘tail’ of more than 200 accounts that together make up only 30 per cent of sales. Due to the size of the field sales structure, a secondary classification groups accounts by channel type: neighbourhood retail, discount and pharmacy. CleanCo recognises the need to reduce the long customer ‘tail’ and is introducing distributors for orders below a minimum quantity. CleanCo’s current approach to segmentation is summarised in Table 2.3.

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Table 2.3 CleanCo - Current approach to market segmentation National accounts 70% sales Fleld sales 10 accounts 30% sales, 200+ accounts Neighbourhood retall Discount sector Pharmacy