In FMCG (Fast-Moving Consumer Goods) industry, institutional sales refer to the selling of products to institutions, businesses, or organizations rather than directly to individual consumers. These sales are typically made in bulk or large quantities and are often characterized by longer sales cycles and different marketing strategies compared to retail sales to individual customers.
Institutional sales in FMCG can involve a variety of buyers, including:
B2B (Business-to-Business) Sales: Selling FMCG products to other businesses, such as wholesalers, distributors, retailers, or corporate clients.
HORECA (Hotels, Restaurants, and Catering) Sector: Sales to establishments in the hospitality industry, including hotels, restaurants, cafes, and catering services.
Institutional Buyers: Selling to various institutions like schools, colleges, universities, hospitals, government organizations, and other non-profit entities that require FMCG products for their operations.
Corporate Gifting: Selling FMCG products that are often packaged as gift sets for corporate clients, employees, or business partners.
Institutional sales are essential for FMCG companies to expand their market reach and increase sales volume. These sales can provide a stable and consistent demand for products, helping manufacturers optimize production and distribution processes. However, institutional sales can be more complex and require tailored pricing, distribution, and supply chain strategies to meet the specific needs of the institutional customers.
The sales approach in institutional sales may involve negotiations with procurement departments, providing volume discounts, offering after-sales support, and ensuring timely delivery to meet the institutions' requirements. Building strong relationships with institutional buyers and understanding their unique demands are crucial for success in this segment of the FMCG market.