Introduction: City managers entering a new city can diagnose the local market through data, field visits, and other methods.
City managers in the FMCG industry play a crucial role as a bridge within the enterprise. They must understand and communicate strategies from management, assign tasks to the sales team, and be responsible for both process and results. They often face market shifts or organizational restructuring, becoming glorified firefighters parachuted into unfamiliar markets with uncertain outcomes. Recently, I spoke with a friend working at a candy brand company who had just been transferred to a new market as a city manager. The market had seen declining sales for multiple consecutive quarters, and the previous manager had been replaced in less than six months, creating immense pressure. We discussed how to quickly diagnose an unfamiliar market and improve business performance. I have organized the insights we agreed upon and share them here, hoping to inspire manufacturers and distributors.
Start with Data
Understand Key Market Vital Signs Just as a doctor takes blood or uses instruments for checks, objective data is the foundation for a preliminary market assessment. First, understand the overall market situation and the core categories, SKUs, and core channels that form the local market's base. Look at the sales volume, share, distribution, and channel contribution of the top 20%-30% SKUs by sales. Using a candy brand as an example: 1. From overall sales data, the market has seen significant declines in both year-to-date and quarterly comparisons, with quarterly declines steeper than year-to-date, indicating the overall market weakness has not eased in the recent quarter. 2. Among the top ten SKUs driving sales volume, nine saw declines in both sales volume and market share, with the third-quarter decline also steeper than the year-to-date average. 3. Examining the numeric distribution and weighted distribution of these declining core SKUs, numeric distribution is roughly flat year-on-year, while weighted distribution has dropped sharply, reflecting declining sales in channels and a problem with product selling power. 4. The above is the overall market situation. Next, break down channels to see the sales share and distribution of these core SKUs in traditional and modern channels. It becomes clear that the category's main sales channel is still modern trade, where both distribution rate and share have declined significantly, while traditional trade is growing year-on-year. 5. If more precise data is available, analyze per-capita sales contribution by office, market execution performance, bonus deductions, and customer service satisfaction. Based on the above analysis, it can be preliminarily concluded that the market has major problems: Overall sales are declining sharply, with significant losses in share and distribution in core channels and categories; Traditional channels are starting to contribute but cannot offset losses in modern channels; The decline is accelerating, so a comprehensive diagnosis is urgently needed.
Field Visits
Observe, Listen, Ask, and Feel to Understand the Root of Problems Field visits should always follow data analysis; otherwise, market noise can easily confuse your thinking. It is recommended to proceed from several dimensions.
1. Customer Aspect Visit local distributors to understand their cooperation history, willingness to cooperate, and their analysis of the current business situation. This helps assess the quality of existing cooperative customers, whether they meet company development requirements in both hardware and software. Also, identify core issues affecting customer enthusiasm, such as price chaos, serious cross-region selling, expense reimbursement delays, and poor handling of market problems. Classify these issues and prioritize major ones that affect customer enthusiasm, quickly forming solutions.
2. Channel Aspect Visit core channels and terminal stores to check whether key channel elements—such as must-stock SKUs, display positions, display standards, merchandising materials, and promotional announcements—are implemented according to company standards, and whether promotional expenses and other resources are properly allocated as planned. Identify which regions, channels, or sales personnel have prominent issues, and whether they are common or individual problems.
Image source: Panoramic Vision
3. Execution Aspect Attend morning/evening meetings and weekly/monthly meetings at each office, accompany sales representatives, sales supervisors, and office heads on route visits, and discuss market observations to assess execution capability. Determine whether sales personnel at all levels meet professional standards, whether team goals are clear and aligned, whether management has the necessary skills, whether there are obvious personality deficiencies, whether team atmosphere is harmonious, and whether the organizational structure is reasonable.
4. Competition Aspect Through interviews with distributors and internal staff, field market visits, and data from Nielsen and POS, fully understand competitors' current operations, including trade policies, promotional policies, and development trends. This provides a more comprehensive basis for decisions on category development, core channel strategies, and resource allocation.
Through field visits, we thoroughly validate the problems identified in data analysis, gaining a more comprehensive judgment of the market. Next, we need to set goals, then formulate strategies and action plans around those goals.
Set Goals
Comprehensively Sort Out and Clarify Marketing Strategies Using the market example from the introduction:
1. Goal Setting Based on the above diagnostic approach, set relatively clear and specific success images to guide future marketing efforts.
1) Customer Aspect: Maintain a positive and healthy manufacturer-distributor relationship. Distributors should complete regular payments and product pickups according to monthly and quarterly sales rhythms (with a variance within 15%). Provide high-quality services in channel distribution, expense disbursement, and data sharing (meeting assessment items such as 24-hour order delivery rate and promotional product order fulfillment rate).
2) Channel Aspect: Have a success image handbook that matches the actual market situation, covering must-stock categories/SKUs, display positions, display standards, and promotional material usage and posting standards. Manage channel resource applications and implementation in an orderly manner. Have clear business priorities, resource allocation, and incentive plans for important festivals and key sales quarters. On key indicators, modern trade numeric distribution and market share should turn positive in the next quarter, gradually achieving positive year-on-year growth, while traditional trade continues its current growth trend. For example, high-potential regional markets can moderately focus resources to achieve a 10% growth target in traditional trade; new channels and e-commerce channels should maintain around 5% growth.
3) Execution Aspect: Establish mechanisms for improving and recognizing business professional skills and supervisor management capabilities, gradually building an execution culture.
4) Competition Aspect: Establish real-time monitoring and information feedback mechanisms for competitors, enabling rapid and efficient responses to important competitor marketing actions.
2. Strategy Planning
1) Customer Aspect: Maintain the rationality and health of the regional market channel structure, periodically evaluating regional distributors and core channel customers. Score them on cooperation willingness, task achievement, hardware qualifications, resource sharing, and service quality. Urge rectification or replace customers who do not meet company development requirements to maintain a healthy market operation.
2) Channel Aspect:
Category Management: Based on Nielsen analysis data, internal sales data, and product selling points, classify existing categories by sales contribution. Following industry practice, roughly divide into destination categories, preferred categories, routine categories, seasonal categories (operated for specific seasons or events), and convenience categories. Identify the TOP categories and SKUs that support the sales base of each regional market, and formulate differentiated category management policies based on different channel consumption scenarios, such as regional must-sell SKUs, product combinations, shelf management, pricing and promotions, to maintain the competitive advantage of core categories in the market.
Operations and Management: Restore the basic market and protect modern channels. As the current core sales channel, modern trade is the guarantee of a stable base. Quickly stop the decline in modern channels, including improving store distribution rates and per-store selling power in regional markets. Precisely select points to expand traditional channels. Traditional channels should maintain orderly expansion, carefully selecting channels and outlets without blindly pursuing distribution rates. For existing traditional channel outlets, do daily maintenance, invest resources reasonably, and set vertical growth targets. Prioritize among regional markets, focusing on markets with consumption bases and creating models. Explore emerging channels through scenario insights. Population insights and consumption scenario evaluation are important prerequisites for channel development. During implementation, follow a pilot approach, accumulate experience, and then gradually replicate and expand. Establish a clear channel success image. Combine with actual regional market conditions to define differentiated channel execution standards to standardize business actions and guide expense investment.
Resource Management: Allocate resources differentially based on category strategy and channel operation strategy. Prioritize core categories, modern channels, key regional markets, and key sales nodes, avoiding broad and scattered investment. Fully evaluate cost-effectiveness before resource investment. Also set up special expense budgets for declining markets and key festivals for phased concentrated investment.
Market Promotion: Market promotion plays a huge role in consumer cultivation and product sell-through. Keep resource usage consistent with core business actions. Prioritize modern channels, declining core stores, key regional markets, and model new channels, while ensuring frontline sales personnel and customers can participate widely and timely.
3) Execution Aspect: Based on the current business situation, draft special incentive plans to motivate relevant personnel for key initiatives. Simultaneously, moderately adjust existing assessment KPIs and shift the focus of key business roles to achieve resource concentration from an organizational management perspective. Maintain a frequency of phased online learning and offline training exchanges for the team, with selections for weekly pacesetters, monthly models, excellent teams, and best supervisors.
4) Competitive Response: Use information tools to establish a dynamic collection and monitoring mechanism for competitor information, including core store displays and sales, promotional policies, and new product developments. Integrate internal and external information with Nielsen data, periodically outputting evaluation reports and response measures compared to competitors.
Implementation Measures
Xing Renbao, with fourteen years of marketing management experience, has served at Coca-Cola, Yili, Red Bull, and other well-known FMCG companies, focusing on corporate marketing diagnosis, manufacturer-distributor relations, channel operations, and digital transformation.