The market is changing, consumers are changing, manufacturers' marketing tactics are changing, and clients are changing. The fiercely competitive cold drink sales have shifted from true promotions to mere selling. A dazzling array of promotional methods confuses the eye, bringing joy to some and sorrow to others.

Seizing warehouse space, expanding client inventory, and blocking competitors' distribution have become standard tactics for new product launches and attacking rival manufacturers. Incentivizing clients' distribution enthusiasm and shifting the promotional focus to one's own brand have become the competitive hotspots in distribution.

1. Tiered Rewards for New Product Launches Typically, a tiered purchase system is used. Some manufacturers offer 100 cases of best-selling products for a one-time purchase of 1,000 cases, 300 cases for 2,000 cases, 500 cases for 3,000 cases, and so on. To control quotas, an upper limit is set.

Drawback: Because of the new product promotion and the inclusion of best-selling products, clients are willing to stock up. However, if the market promotion fails, it will cause a large backlog of inventory. After recovering profits from gifts, the backlogged products may be sold at low prices, leading to price system chaos. Excessive backlog also occupies warehouse space, making it difficult to stock other items.

This method works successfully only when: The manufacturer has strong control over the terminal market, allocates quotas based on the number of outlets, and conducts rapid and forceful distribution to block competitors while ensuring a healthy inventory cycle.

Some manufacturers adopt a method of first delivering goods and then rewarding, which also yields good results. Others offer a discount on the total purchase amount, but this requires strict control over the client's distribution prices to prevent terminal price chaos.

2. Exclusive Distribution for New Products With the densification of cold drink distribution clients, the establishment of regional clients has broken the traditional monopoly of first-tier distributors. Evaluating excellent clients in the region for exclusive distribution of new products not only increases their profit points and mobilizes their distribution and promotion enthusiasm but also stimulates other clients to improve their operational levels and strive for the exclusive distribution rights in the next new product launch. Exclusive distribution by product item also, to some extent, prevents clients in the same region from engaging in low-price dumping that disrupts the regional price system.

In today's era where manufacturers demand maximum sales, few manufacturers can implement such standardized operations.

3. Tiered Rewards for New Product Distribution To ensure the success of new product launches and maintain strong sales momentum, manufacturers set tiered reward systems for clients based on cumulative new product sales. For cumulative sales of 100,000 to 300,000 yuan, a 3% reward is given, directly credited as a discount on the next purchase or as an equivalent value of new products. Those who do not reach the threshold do not receive the reward. Similarly, 300,000 to 500,000 yuan earns 4%; 500,000 to 800,000 yuan earns 5%; above 800,000 yuan earns 7%.

This approach is more common among regional small manufacturers. The most significant effect is direct cash rewards. To compete for cash rewards, clients engage in vigorous distribution and stocking, to some extent seizing terminal outlets and putting pressure on competitors. This method is more suitable for markets where manufacturers use first-tier distributors for distribution. For direct-operated markets, the effect is not ideal, as the focus is on terminal outlets.

4. Proportional Purchase Rewards by Price Point In a certain market, retail prices for cold drinks are generally divided into 1 yuan, 1.5 yuan, 2 yuan, 3 yuan, and above 5 yuan. Given the consumption and competition characteristics of the Northeast market, 1 yuan, 1.5 yuan, and 2 yuan are the dominant retail prices. Among them, 1 yuan items account for about 45% of distribution, 1.5 yuan about 30%, 2 yuan about 20%, and above 5 yuan less than 8%. The 1 yuan items do not bring much gross profit to manufacturers; large brands' 1 yuan products are mostly limited to attacking local low-price products. The real promotional focus is on 1.5 yuan and 2 yuan items.

To reasonably adjust the price ratio of products, manufacturers allocate quotas by price in promotional combinations, requiring clients to promote according to the price ratio. To some extent, this method ensures the rationality of the product item promotion ratio in the market.

5. Monthly, Quarterly, and Annual Rebate System To control clients, prevent payment risks, combat cross-regional selling, and constrain clients to fulfill contract obligations, manufacturers implement monthly, quarterly, and annual rebate systems. Based on the warehouse price, a markup is added to set the distribution price, and a certain percentage is rebated (some manufacturers use a 6% rebate). The rebate is paid as 70% monthly, 25% quarterly, and 5% annually. The settlement method varies; some use products, others use cash. Rebates in the form of products continue to occupy client warehouse space, further expanding sales, which is very beneficial for the manufacturer's product promotion. Cash rebates are more welcomed by clients and can be used to offset purchase payments.

The rebate system on one hand constrains client behavior and on the other hand ensures the manufacturer's capital turnover, strengthening control over clients. However, the prerequisite for adopting a rebate system is that the brand must be strong; otherwise, clients will not accept it.

6. Material Rewards The starting point of material rewards is to enhance customer relationships, stimulate clients' distribution enthusiasm, and maintain brand loyalty. Manufacturers typically use this in annual rewards, client marketing meetings, and phased sales competitions. Annual rewards: for top-ranked clients in sales, in addition to the contractual rewards, they may receive a rear-projection TV or a computer. For clients with significant contributions, manufacturers may even provide delivery vehicles for free use, with the manufacturer retaining ownership and the client having usage rights. At client marketing meetings, gifts such as wool scarves or high-end shirts are given to all attending clients. In phased sales competitions, different material rewards are given based on sales rankings, e.g., within one month, the top three clients receive a color screen mobile phone, a refrigerated water dispenser, and a microwave oven, respectively.

Practice has shown that material rewards have achieved positive results. Clients feel valued by the manufacturer. The sales ranking reward method introduces a "horse race" mechanism, turning client competition into an honor battle, achieving the manufacturer's true goal of market promotion. On the other hand, for clients with good distribution, there must be some control measures; otherwise, their appetite may grow, leading to a tendency for large clients to pressure the manufacturer.

7. Client Plaque Awarding System In some markets, clients have very strong distribution capabilities. They generally have complete delivery teams, strong delivery capacity, control over the vast majority of regional networks, and ample funds. For such regions, manufacturers typically adopt an exclusive distribution system, awarding plaques such as "Exclusive Distributor in XX Market" or titles like "XX Annual Sales Champion," "XX Annual Market Development Champion," or "XX Annual Market Growth Champion." For clients, material rewards and spiritual encouragement are equally important. Awarding such plaques is also recognition of the client's sales performance and stimulates other clients.

Leveraging clients' competitive nature can be a good incentive. At the same time, we must recognize that as marketing focus shifts downward, competition is more reflected in terminal battles. Exclusive distribution has its unique advantages but also exposes shortcomings in fine terminal management. Therefore, assisting clients in developing their downstream distribution systems and controlling terminals is essential to maintain long-term advantages in the regional market.

8. Freezer Support Terminal sales of cold drinks also depend on the competition for cold chain resources. Seizing more freezer display space and more freezer capacity at terminals increases product purchase opportunities. To ensure good display of their own brands, many manufacturers invest in freezers. A successful example is Wall's, which opened the market through extensive freezer placement, allowing consumers to recognize and accept Wall's through the heart-shaped logo on freezers across streets and alleys. Therefore, manufacturers provide a certain number of freezers to well-developed client markets to cultivate regional freezer networks. Some manufacturers also adopt a method where clients purchase freezers themselves, with the principal returned over three years.

Freezers are significant for product display, brand image, and sales. The key lies in freezer management; otherwise, the placed freezers may become competitors' cold chain. In freezer management, Nestlé and Wall's have the most standardized practices, with dedicated freezer managers responsible for regular merchandising, inspection, and timely replenishment.

9. Image Light Box Support at Sales Points While conducting deep distribution, manufacturers also strengthen terminal brand image construction by providing free storefront light boxes with the manufacturer's brand image for A-level sales points. Terminal sales points greatly welcome this. Image light boxes, combined with in-store image counters, have positive significance for enhancing brand memory and promoting product sales.

Several issues must be considered for image light box support: first, site selection is crucial—choose locations with superior geographic position, high sales volume, and good cooperation attitude; second, the selected points must be reasonably distributed to ensure a certain visibility in the region, using points to drive the area for overall image promotion; third, the manufacturer must have sufficient strength, as image light box support requires certain costs; fourth, customer relationship work at the selected points must be solid to avoid resentment from neighboring points, which could lead to a sales boycott; fifth, there must be a contract to constrain the use of light boxes, ensuring the usage period.

In practice, some manufacturers have failed in image light box support. Some light boxes are too densely distributed, some are almost invisible, and some points switch to other manufacturers' light boxes within a few months due to poor customer relationships. Any task must be meticulously planned, considering multiple factors to ensure the effectiveness of the investment.

10. Personnel Salary Support Personnel salary support is a subsidy method for large regional clients with good distribution, on one hand to strengthen customer relationships, and on the other hand to indirectly manage the client's employees. The most common approach is to provide a basic salary to the client's delivery drivers, with the client giving commissions to the drivers, and incorporating the drivers as company members.

This approach is mostly adopted by regional small manufacturers. The prerequisites for providing personnel salary support are: strategic or outstanding regional markets, exclusive first-tier distribution, and the first-tier client holding a very important position with the manufacturer.

The drawback of personnel salary support is that clients, while saving on personnel costs, may instruct employees to deliver competing products that sell well in the market, creating management obstacles. As large clients, small manufacturers often turn a blind eye, focusing only on the client's sales volume. Personnel salary support requires a comprehensive assessment system and contractual constraints with the client for exclusive delivery; otherwise, a certain percentage of salary may be withheld for breach of contract.

11. Training Support and Personnel Assistance As market competition intensifies, market conditions become harder to control due to clients' weak operational capabilities. In this situation, most clients change their mindset, asking manufacturers for resources and support, shifting the focus of market operations. Therefore, manufacturers provide training support to clients and their employees to improve clients' operational levels and competitiveness. At the same time, they assign business personnel to assist sales, guiding clients' operations, providing reasonable employee assessment systems based on the client's situation, establishing a complete delivery system, improving clients' management level, perfecting financial systems, and formulating reasonable competition plans.

Generally, manufacturers hold regional marketing meetings at different times to train clients and send company trainers to train clients' employees, adjusting employee mindsets, analyzing industry trends, announcing sales policies, building sales confidence, and providing sales technique guidance. For key cities, a business representative may be stationed at the client's location for long-term sales assistance, guiding the client and providing timely feedback.

12. Manufacturer Market Attack Team Support When second- and third-tier markets in the region are sluggish, some manufacturers organize a delivery team to enter the second- and third-tier cities in the region for direct policy-based distribution to terminals.

The market attack team has several significances: it creates sales momentum in the region, conducts a thorough inspection of network sales points, tests the client's delivery capability and network coverage, and gives clients confidence in sales.

The market attack team must be composed of the strongest team, selecting the best delivery drivers and the best terminal business personnel. With the company bearing the costs, they conduct one to two days of concentrated delivery with the client's delivery team, with promotional banners on vehicles, focusing on single-product combination promotions, and POP posters (in cities where conditions allow). The attack team must choose the right timing, avoiding periods of strong competitor promotions, to ensure the effectiveness of the attack.

At the request of our distributor friends, the third B-end e-commerce inspection tour of this public platform will visit Wanshang Yizhan, Yunbao Shangmeng, and Weijie Chengpei from July 9-12. Distributor friends interested in transformation can join us for on-site inspections:

Organization Form 1. Company visits 2. Actual market case visits 3. On-site explanations 4. One-on-one exchanges

Participating distributor friends only need to pay a registration fee of 200 yuan. Time: July 9-12, 2016. Location: Changsha, Xiamen.

Interested distributor friends can register by long-pressing the QR code below. When adding friends, please reply "Third Registration".

Past Inspection Enterprise Cases:

Yishang Logistics Model Inspection (Second B-end E-commerce Inspection Tour: Yishang Logistics)

Caiba Model Inspection

Jinhuobao Model Inspection

Beiquan Model On-site Inspection

Piduoduo Model On-site Inspection

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