What Is Routes-to-Market?

To see the big picture for Routes-to-Market (RTM), let us look at one of the biggest challenges faced by general managers: determining the total budget to set for marketing, sales, and customer service, and how that budget will be allocated across these departments. Without a method to determine objectively how much to spend in each area, management team meetings become debates between different factions trying to convince the general manager to adjust the budget in their favor. If revenue last quarter came in below expectations, the marketing and sales department heads may advocate spending more. Which of the two departments should get more funding, or should both departments’ budgets be increased by the same percentage? Should money be pulled from the advertising budget to spend on direct marketing? Or should it be used to hire more sales people? Each department head may recommend redirecting spending from the other’s department to his. Should the cash incentives for the distribution channel be increased, or should a new “buy 2, get 1 free” promotional campaign be targeted directly to customers? Many proposed initiatives may impact pricing or other components of the five Ps – product, positioning, price, promotion, and place. Is the problem the level of spending, or is it coordination between the departments? For example, marketing claims that it has generated hundreds of leads that sales has not followed up on, but sales complains that the leads are worthless. Meanwhile, no one has contacted the leads to determine which of them are qualified prospects.