Distribution is a significant task that FMCG companies and sales personnel cannot avoid. Throughout the year, there are several major tasks: first, distributor meetings; second, second-tier distributor orders; third, initial distribution at the start of the year (including new product launches); fourth, terminal promotion activities; and fifth, consumer publicity and promotional activities. If these are completed and done well, the year will generally yield good results; if not, performance will be mediocre, or even "widespread losses."

Why is distribution so important? This is determined by the characteristics of FMCG: rapid, widespread distribution, impulse buying, and random consumption. Simply put, it is to ensure that customers can see the product, buy it, and buy it conveniently, because many customer purchases are not pre-decided but are often random. Statistics show that the incidence of random purchases in FMCG is over 30%, so distribution and managing consumer touchpoints are crucial.

Step 1: Understand the Basic Market Conditions

First, understand the product positioning and consumers, understand the competitive situation, and also understand the overall market, channels, and terminal conditions. These are foundational tasks that must be done in advance. If the product is positioned as mid-to-high-end, distributing through ordinary small shops will not be effective; if sales are poor after distribution, you will have to retrieve the product, which also dampens market confidence.

Of course, we also need to understand customers: what they think, their purchasing psychology and behavior, and which places are their preferred purchase locations. Additionally, distributors need to stock up in advance.

There is a profound example of the impact of product and consumer positioning on distribution, which I personally experienced and which greatly influenced me.

Many years ago, just after graduating from school, I was assigned to a regional market. The company had a new product to launch, which was relatively expensive. At that time, the main focus should have been on restaurants and nightlife venues (though the company had no overall promotion strategy or guidance, leaving it entirely to our discretion). Everyone worked independently. I rode the distributor's tricycle with the distributor's salesperson to distribute to small shops (grocery stores, small supermarkets) in the urban area. Over three days, we covered about 30-40 shops (cash on delivery, with gifts). A week later, we followed up and found that the product had barely sold, so we later retrieved it. It was hard to get into those shops because they were not the target customers' purchase locations, nor the main sales venues. Fortunately, it was a small city; what if it had been a large city?

Now you might say that these products are not sold in such places; you need precise distribution, terminal promotion, personal recommendation, and consumer pull. But at that time, many years ago, no one told you what to do, there were no marketing or sales guidelines, and no execution plan!

Understand the main sales channels; the main channel is the fundamental source of sales. For example, for beverage products, small shop terminals and chain convenience stores are the primary considerations for distribution, followed by hypermarkets, supermarkets, and special channels. Do not pick up sesame seeds and drop the watermelon.

Step 2: Develop a Distribution Plan and Execute

First, clarify the goals: distribution area, distribution volume, terminal types, and quantities. Quantify them. Set specific targets for distribution rates in each terminal type and the overall distribution rate.

Second, conduct a thorough survey of all outlets in the region, identify suitable sales terminals, and plan and number routes for these terminals. (I will not elaborate on regional route planning here.)

Third, determine which types of terminals must be prioritized for distribution. For products like beverages, small shops are the preferred terminals. For example, for a beverage product distribution, the first round should target small shops without skipping any; all selected priority terminals must be covered. The first round should achieve a 40% distribution rate, the second round 60%, and the third round 80% or above.

Fourth, the distribution method: accompany the delivery vehicle, cash on delivery. Why? Because if they don't pay, they have no sales pressure.

Fifth, prepare materials and gifts for distribution. During distribution, we should increase gift allocation, but collect cash for the distributed products. Sixth, conduct training before distribution, including solutions to problems and sales pitches. What if a customer says your product is expensive? What if the customer ignores you or is dissatisfied?

When a customer says the product is expensive, what is their real intention? If your product sells well, they won't say that, because generally, expensive products have higher gross margins. Saying it's expensive just means they worry about not being able to sell it. If the customer is dissatisfied with what you say, it's not dissatisfaction with your product but with you personally.

Furthermore, divide labor: typically 2-3 people per group, following the routes. Centralized distribution is more efficient. Also, budget for expenses such as free goods and gifts. Finally, arrange vehicles and goods.

Step 3: Sell-Through

If after 2-3 rounds of distribution the product has reached the terminals, what is needed then? Of course, it is to sell it, so that consumers can consume it. This is the basic purpose of distribution.

How is sell-through achieved? Importantly, the channel must have a driving force, which is the design of your price system that can generate channel push. In the mainland market, the role of the channel is unquestionable. Second, your display and presentation should generate consumer interest and stimulate purchase. Third, activity setup and personal selling are also very important in domestic FMCG, serving as sales promotion and terminal interception. Finally, systematic visits and maintenance to enhance customer relationships, which is also a form of resource integration and an important part of sell-through.

Step 4: Overall Consumer Pull

If distribution and sell-through are fully executed, then at the overall promotion level, some comprehensive efforts should be made to drive sales. For example, combine activities such as prize sales, buy-one-get-one, free samples, discounts, etc. If the product quality is excellent, you can also conduct brand-level activities, such as roadshows in large squares or communities, which can be very effective.

All new product promotional activities, such as discounts and special offers, must be handled with caution. A principle: only after the launch announcement and distribution have reached a high level, meaning there is a certain awareness and perceived value.

Step 5: Monitoring, Evaluation, and Improvement

For regions with poor sales, analyze the reasons: is it due to poor distribution, unsuitable sell-through plans, or inadequate market maintenance? Find the core causes and improve. For new product launches or distribution, daily reports are generally used, and sales progress should be monitored for key terminals. If sales progress is slow in certain terminals, consider product exchange or retrieval. During launch, "seeking momentum" is the top priority, while "seeking volume" is secondary. Once momentum builds and product turnover is smooth, sales will quickly increase.

Distribution and ensuring distribution rates are very important tasks for FMCG launches. Strive for maximum exposure and visibility. Remember, for a mass-market FMCG product, increasing visibility is the first priority for a new product launch.

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