Navigating Key Account Management: Risks and Strategic Imperatives in Highly Concentrated Markets

Abstract

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In recent decades, extensive research has explored the benefits of developing key account management (KAM) for manufacturers and distributors. Key account management is a strategic approach where businesses prioritize and manage relationships with their most important clients to foster mutual growth and profitability. This concept has proven particularly advantageous in sectors where customer relationships significantly impact business performance. However, there exists a significant lack of quantitative research into the risks associated with KAM for manufacturers, specifically as a consequence of their relationships with large, concentrated, and increasingly powerful customers. This is especially pertinent in markets characterized by high competition and rapid turnover, such as the fast-moving consumer goods (FMCG) sector. The FMCG market is unique due to its high competitiveness, low margins, short product life cycles, and high transaction volumes. These characteristics necessitate a thorough examination of how KAM strategies impact manufacturers in terms of risks and opportunities.