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When it comes to promotions in the food industry, everyone is puzzled because promotions have become the only way for companies to compete. Apart from giving gifts and cutting prices, there seems to be no third method, which is the most painful thing for marketing strategy experts. In helplessness, we find techniques; from confusion, we draw inspiration. Through continuous trial and error, we have summed up some experiences and discovered that there is some fun in this dull competition.
High Pricing, High Promotion
In the face of constant buy-two-get-one-free or buy-three-get-one-free offers, consumers are almost confused and find it hard to calculate which product is cheaper. As a result, many manufacturers take advantage of this confusion by adopting high pricing with high promotions. A dairy company launched such a product in the Shanghai market: 250ml Bailibao milk at 1.7 yuan per bag, with a buy-two-get-one-free offer, averaging 1.13 yuan per bag, attracting many consumers to snap it up upon launch. Let's analyze: most packaged milk on the market has dropped to below 1 yuan per bag, but this product is priced at 1.7 yuan, giving the impression that its high price means good quality. At the same time, the buy-two-get-one-free offer makes consumers feel they are getting both high-quality milk and a good deal. In fact, no one calculates that each bag is more than a dime higher than other brands. This is fuzzy promotion.
Frequently Refresh Promotional Items
Regarding gifts, everyone knows that choosing novel and unique promotional items is key. However, often they just use whatever the manufacturer provides, too lazy to source their own, or they consider costs and are reluctant to invest. So we often see many brands giving away common items like milk cups or umbrellas, which do not entice sales. I believe there is a technique in selecting promotional items: frequently refresh them. For example, Mengniu uses flexible and varied promotional items like milk pots, electric toothbrushes, IP cards, eggs, lottery tickets, etc. Almost every promotion lasts no more than a month before switching to other items. Distributors in various regions can choose their own promotional items based on the promotional budget allocated by the manufacturer; as long as they can think of it, they buy it. There is also a distributor in Shandong who sells Taitai milk. She often goes to wholesale markets to buy promotional items. During holidays, she customizes greeting cards and calendars for consumers, and even buys a batch of small hand rolls to give to children accompanying adults to supermarkets, which is very popular in the local market. These items are ordinary but not commonly used. Frequently changing such items attracts consumers' attention, leading to trial or purchase.
On the cost of promotional items, that Shandong distributor has an insight: distributors should not haggle with manufacturers over every penny. If the manufacturer gives, you give; if not, you don't. The money you earn is your own. If you earn 4,000 yuan a month, just take 1,000 yuan to buy promotional items, and the return will definitely exceed 1,000 yuan.
Turn Direct Price Cuts into Terminal Interception
Manager Zhang from Zhejiang said that this year Mengniu's promotions in their area were crazy. Initially, they directly cut prices from 37 yuan per box (500ml Tetra Pak, 12 bags) gradually to 26 yuan per box. However, small retail points were hard to control; they adjusted prices within the discount space, causing inconsistent prices at many points and severe cross-region selling. So now Mengniu no longer cuts prices; its policy for retail points has changed to "display stacks and give gifts." If a store displays Mengniu empty boxes at its entrance for a month, it gets a box of milk. As a result, few retail stores adjust prices themselves, and the entire market order is maintained. On the other hand, this also intercepts competitors at the terminal because "if a store displays my products, it should not display other products, otherwise it will not get the gift." This terminal interception method has been adopted and "carried forward" by many companies.
Go to the Competitor's Hometown to Contain Its Attack
Once, chatting with a salesperson from a milk powder company, he said their sales in the Northeast were limited, but the company had long regarded it as a key target market. The reason was not that they were a national brand and had to cover the national market, nor that competition was not fierce, but because it was the hometown of Wandashan, one of the national brands. Wandashan went to the Central Plains to squeeze their market, so to distract Wandashan's energy, they also went to its hometown to "make trouble." In fact, establishing a presence in the Northeast market has more strategic significance for them than sales volume.
Use Different Products to Distract Competitors' Energy
Another example is the competition between Mengniu and Yili in Hebei and Henan markets: After Mengniu entered the Shijiazhuang market, it launched a buy-three-get-one-free promotion, averaging 27 yuan per box, posing a great threat to Yili. Yili, in anger, directly lowered its retail price to around 26 yuan, even lower than Mengniu's price, reportedly the bottom price. After several rounds of competition, they gradually raised prices through various means, but Yili kept its price a few dimes lower than Mengniu. The competing product was the 500ml Tetra Pak, which is Mengniu's strong product, while Yili's strong products are pure milk and yogurt. In early September, Mengniu launched pure milk and yogurt products, challenging Yili's citizen milk with buy-give promotions, and then launched cup yogurt, keeping prices close to Yili's with continuous promotions. The purpose of launching these two new products was not just to expand product categories but also to restrain Yili's main products. Because Mengniu using Tetra Pak to compete with Yili would never gain a price advantage and would only harm its profitable products. By using the other two products to contain Yili's main products, Yili would weaken its attention to Tetra Pak and not go all-in on that single product.
Market is like a battlefield, and promotions are like weapons; it all depends on how you play!
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