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I. Beer from a Marketing Perspective From a professional standpoint, beer is defined by its ingredients and body. But from a marketing perspective, beer offers many intriguing aspects. Among all FMCG industries, beer is unique, sitting between beverages and baijiu (Chinese spirits). The special characteristics of beer are summarized as follows:

First: Product Characteristics.

  1. Beer has strong consumption universality. Compared with baijiu and wine, beer has the broadest consumption base. Among all alcoholic beverages, beer has the highest consumption volume, with domestic per capita consumption approaching 30 liters. Its consumption is no longer limited by gender or age, making it a widely adopted consumer product.
  2. Due to rapid economic development, beer is no longer a "luxury item," and the "economic" constraints on beer consumption have become less pronounced.
  3. The difference between peak and off-peak seasons is gradually narrowing.

Second: Logistics Characteristics. Beer is a typical "bulky" product. Logistics costs account for about one-fifth of total sales costs. The main logistics links include: A) Transportation from the enterprise to distributors; B) Less-than-truckload (LTL) delivery from distributors to retail terminals. Unlike other industries, beer logistics involves two-way costs: A) Beer transportation; B) Bottle recycling. This unique logistics characteristic means that beer sales require significantly higher labor costs than other beverages, baijiu, and other industries. Therefore, many companies are experimenting with low-cost logistics systems. For example, Tsingtao Brewery's Laoshan Beer, when it launched on a large scale in 2002, adopted a no-return-bottle policy in some local markets, relying on natural bottle returns to ease the heavy distribution burden on distributors. Distributors only needed to unload the beer and collect payment, without having to handle, count, or even visit each hotel to count bottles. At settlement, they no longer had to deduct bottle costs, which often led to disputes over small amounts. The no-return-bottle policy also eliminated the tedious labor across the entire channel, especially during the hot summer months.

Third: Channel Characteristics. Beer consumption channels also differ from other industries. The main consumption venues are hotels, small supermarkets, and nightlife venues. Purchases are primarily based on convenience and proximity. As a bulky, low-value product, beer rarely serves as a "gift" unlike baijiu, and household consumption is not dominant in the mid-to-high-end market (except in rural areas). Beer consumption terminals can be divided into two categories: on-premise (consumed at the venue) and off-premise (take-home). In traditional channels, most companies adopt a three-tier channel model: primary distributor + secondary distributor + terminal. This model is characterized by extensive management, high costs, and slow response. Currently, the trend is toward shortening channel levels, small-area operations, and direct supply to terminals.

Fourth: Marketing Characteristics. Since beer sits between baijiu and beverages, its marketing also reflects this hybrid nature. The beverage industry emphasizes meticulous management, while the baijiu industry still focuses on channel warfare. Beer marketing is almost a blend of both. In terms of product price lines, beer differs from baijiu in that its price range is very short. Consumer price perception tends to follow the mainstream. For example, in hotels, the mainstream price in northern markets is 3-5 yuan per bottle, while products above 10 yuan account for only 1/100 of total consumption (excluding nightlife venues). In terms of taste, beer does not have fixed flavor profiles like baijiu's cellar or strong aromas. However, beer tastes show distinct regional and trendy characteristics. For instance, many places favor 10 or even 11 degrees, while southern markets prefer low-alcohol, light-tasting beers of 6-7 degrees.

II. Marketing from a Beer Perspective Because of its hybrid nature, beer marketing is complex. Some have lamented: "Once you've done beer, other industries seem boring!" In the FMCG industry, beverages are represented by Coca-Cola's 101 system, Wahaha's channel alliance, and the currently popular Wanglaoji's "channel intensive cultivation," which almost epitomize the highest skills in FMCG. In the beverage industry, the "martial arts moves" are similar; the only difference is the school. But in the beer industry, the moves vary greatly, and no distinct schools have formed.

1. Distributors: Distributors are a love-hate relationship for companies. The cry of "the customer is too big for the shop" is common! Distributors who have worked in the beer industry have many feelings! They put in great effort but don't earn big money! Bulky beer often leaves distributors battered—bottle explosions, glass cuts, etc. The hotter the weather, the more labor: loading, transporting, bottling... As distributors gradually lose their voice and become laborers, can they be ignored or even overlooked? Distributors are employees of the company, and their staff are also employees of the company! The company's marketing will must be implemented not only through its "direct troops" but also through the "mercenary" level of distributors, including distributor training, assessment, and internal management improvement. For example, a beer distributor has three salespeople, each with a basic salary of 800 yuan, plus a 0.3% commission on sales. This leads to "bad habits" where distributor staff only sell old products and low-price items, hindering the promotion of new or high-end products! To solve this, when launching new products, companies design channel profits and also set aside some distributor staff incentives, offering per-piece commissions by product type. When distributor staff cooperate in new product distribution, they can earn over a hundred yuan a day in commissions, with same-day rewards, making new product distribution immediately effective! In routine marketing management, terminal promotions can be grand, but incentives for distributor staff are often overlooked. Yet, even small incentives can achieve significant results! Building a broad "united front" and "uniting all who can be united" is the best strategy!

2. Consumers: A. Consumers often do not have the choice. Due to exclusive deals and volume-based promotions, it's common for a hotel to sell only one brand of beer! B. Consumers don't know what the best-tasting beer is. Beer seems like a magic potion, but it doesn't have a fixed taste profile. Consumption experience is closely related to the environment, such as where you drink beer and, crucially, at what temperature. C. In the mid-to-low-end market, brand loyalty in beer consumption is not strong. The determining factors are local preference and herd mentality. The latter is mainly influenced by the breadth of distribution, which aligns with Coca-Cola's nine-word marketing mantra: "See it, buy it, think of it!"

3. Sales Volume and Profit What does 10,000 tons of beer mean? It's the sales volume of half a county-level city! The strong growth in beer consumption is expanding its penetration. A company with a production capacity of over 100,000 tons only needs a prefecture-level market. In this regard: A. Beer's long-range strike capability is insufficient. In the beverage industry, Coca-Cola's marketing scope is defined by its bottling plants. The future beer marketing model will transition to a separation of production and sales, with beer production systems emerging as an independent social division of labor! B. The higher the market coverage, the greater the profitability; conversely, lower coverage means weaker profitability! Building a strong base market is the best guarantee of a company's blood-making ability. Using acquisitions or building branch plants to achieve "pillbox"-style market advancement is the future trend! The guerrilla tactics of small enterprises will gradually fade from the historical stage!

III. Analysis of Mainstream Marketing Models in Beer Companies The current mainstream marketing model in the beer industry is deep distribution.

What is Deep Distribution? Deep distribution, as the name suggests, is a distribution model where the manufacturer has deep involvement and a dominant role in network operations. In an ideal deep distribution model for consumer goods, the manufacturer handles the management of sales personnel, network development, terminal maintenance, display and promotion execution, while distributors are only responsible for part of the logistics and cash flow.

Foundations of Deep Distribution (Outline)

  1. Route visits
  2. Merchandising operations
  3. Separation of promotion and distribution: The main approach is that the manufacturer executes promotions, and distributors handle delivery.
  4. Channel planning Channel classification—distribution and hotels Distribution categories: small supermarkets, large supermarkets, wholesale, nightlife venues Hotel categories: A stores, B stores, C stores. With channel exclusivity policies, absolute control over market high points is achieved!
  5. Market planning Divide your market into: base market, target market, and peripheral market Base market: focus on defense Target market: focus on attack Peripheral market: natural penetration

What is Route Visits? Route visits are a management platform that embodies the company's marketing will and brand strategy. A company with a clear strategic will will inevitably implement or ensure implementation through its marketing platform. In traditional channel warfare, distributors serve as the foundation of the company's marketing platform, but they often fail to align with the company's actions in reflecting marketing will and brand strategy! For example, when a company launches a new product, the biggest obstacle is not the consumer market but often the channel members. Even if distributors support the new product launch, due to differences in capability, personality, and market conditions, progress and methods cannot be unified. Before the new product launch is complete, it often becomes chaotic and inconsistent.

Phased Role of Route Visits (Outline)

  1. Penetration visits
  2. New product promotion
  3. Competitor blocking
  4. Market monitoring

Basics of Route Management:

  1. Form-based operations Basic structure: one map, two forms Street sweeping Regional market business map Terminal customer information form Sales representative route visit records
  2. Route management Merchandising standards and scoring evaluation standards Inventory management Daily meeting management for office institutions Data analysis Promotion execution and monitoring Regional market planning and execution
  3. Personnel management
  4. Training
  5. Assessment
  6. Turnover and job-hopping

Difficulties in Route Management:

  1. Deep bond between fish and water. How can companies and distributors form a synergy and resolve friction and resistance in the struggle for "voice"? In mature and semi-mature markets, when companies introduce deep distribution, they typically use "cutting the flag" tactics, which creates invisible resistance.
  2. How to absorb the huge cost of intensive cultivation—can it be intensive forever?

Characteristics of Route Management:

  1. Managing people: Any market behavior is executed through people. Route visit personnel work outdoors daily. Whether their daily actions are "effective" is the hardest problem for companies. From the company's perspective, they hope employees will proactively take orders, display, maintain the market, and create value. Employees, on the other hand, want to do less and earn more. Employee market operations can only be reflected through work forms, but many companies find form management a headache: not filling forms, falsifying forms, fake orders, chaotic statistics... Managing people is the core of route management. Without a professional and complete management system, it will become "drawing a tiger but ending up with a dog." So how can we manage "people" well? First: Employees never do what is "hoped" but what is assessed! Second: What you manage, you must check! What you check, you must assess! Around these two cores, companies build their assessment processes and establish tiered management standards for employee promotion and elimination. Third: The three knives of route visits—visit rate, customer relationships, and delivery support!
  2. Managing numbers: How does sales volume come about? The development of sales is the process of pushing product management focus further toward the consumer market. For example, 20 years ago, the management focus was on "supply and marketing," with upstream raw material control as the focus. 10 years ago, the focus shifted to channels, with distributors becoming the management focus. 5 years ago, the focus extended to terminals. Throughout these shifts, one concept has run through it all—sales volume. In today's deep distribution, converting simple sales numbers into detailed figures is part of intensive cultivation, such as:
  1. Distribution rate —The number of consumer terminals in each region is relatively fixed. The process of pushing your products into these terminals is the formation of distribution rate. Two basic requirements must be accurately reflected: A) Know how many terminals are in the region and create records; B) Know which terminals your products have reached and establish records.
  2. Reach rate —The closer you are, the greater the opportunity. Get your products as close to consumers as possible, constantly bringing convenience to the consumer market while repeatedly and consistently stimulating consumers to trigger purchase desire. This leads to related market actions: displays, store signs, POP, stack displays, etc., and even companies develop their own merchandising standards.
  3. Delivery order —Two basic conditions for delivery: reasonable price order and the principle of exclusive delivery. Price order is the basic means to ensure channel profits. Exclusive delivery is the effective means to ensure normal prices. The so-called exclusive delivery means that a specific terminal can only have one corresponding supplier.
  4. Turnover rate —This is an important indicator of the health of the market digestion system. Companies obtain specific turnover data through route personnel terminal inventory statistics, and based on product turnover, they can assess the health of their products and decide whether to take "medical" measures! The biggest difference between deep distribution and channel warfare is the extensive versus detailed management of marketing. The former relies on the company's own strength, while the latter depends on distributors as the operational platform. The purpose of implementing deep distribution is to accurately and smoothly implement the manufacturer's market will. The system's greatest advantage is its powerful attack capability. The entire attack process, under the specific execution and supervision of "manufacturer personnel," is accurate and targeted, exposing the opponent's weaknesses and vulnerabilities during the attack! As a result, every move hits the mark. In channel warfare, daily promotions are mostly implemented through distributors. Under the "profit-seeking" mentality (intercepting promotional items), the distributor's "promotion" execution is greatly compromised. The company then "hits a mountain to beat a cow," shooting from a distance, wasting several truckloads of ammunition (promotions) to eliminate one enemy.

Be a Clear-Headed Route Supervisor. Route visit management is a system. It is the "assembly line" of corporate marketing management, and its essence lies in management, not individual capability. In management, because you are dealing with the entire system, many route supervisors become "confused." Characteristics of a confused route management supervisor:

  1. Doesn't know the role of "numbers"
  2. Doesn't know the mainstream terminals of the product, i.e., where the market high points are.
  3. Doesn't know or cannot control the flow of their products.
  4. Manages routes but not the market.
  5. Resources are dispersed, advancing in parallel, relying on "brute force."
  6. No battle plan.
  7. Data looks good, but sales don't grow! Falsifying orders and forms is their specialty!
  8. Confident in dealing with headquarters inspections. The ultimate goal of route visits is to seize the position of the market's number one brand and master the market rule-setting power. What is market rule-setting power? For overall market rule-setting power, for example, before the low-alcohol beer trend swept the northern beer industry, Shandong's Yinmai Beer began building its 8-degree market and concentrated 80% of its product line in this segment. Another example: five years ago in the Shandong market, when many manufacturers focused on 2-yuan terminal prices, Qingdao Laoshan Beer fully built its 3-yuan product line market, and it still leads the mid-to-low-end beer market in Shandong. For local market rule-setting power, for example: strong channel members + dense product distribution + reasonable and full product line = regional market number one brand. Companies that adopt route management have only one competitive goal—the position of market leader.

Four Embarrassments of Route Management

  1. No competitive target. Mainly manifested in: in mature base markets, relying on high coverage and brand advantages to control the market for a long time, single-product operations, slow product updates, basically no new product promotion, thin channel profits, and channel members forced to accept and deliver goods without competitive rule-breaking, leading to growing channel resentment!
  2. Multiple competitive targets. In local market operations, adopting a "when soldiers come, we block; when water comes, we cover" free-style approach. In multi-brand competitive markets, there is a mindset of "destroy whoever comes." The main reason is the high centralization of the sales department, with incomplete planning departments like marketing, and sales targets are achieved solely by "capable people." In attack and defense, it often results in "losing 800 to kill 1,000"!
  3. Playing second fiddle to the end. In local markets, the biggest threat often comes from the "second brand" in the market. Therefore, companies must widen the gap with the second brand and maintain a safe distance at all times. For example, while stabilizing mainstream terminals, emphasize that the control rate of the product should be above 80%. In market competition, the third brand must pass through the second brand to take the top spot, so the threat is relatively small.
  4. Routine execution. Office assessment indicators are arbitrarily set, or once set, they remain unchanged for months or even a year. Checks are not in place, falsification is rampant, data is inaccurate, and sales growth does not come from planned projections but from opportunistic growth.

The "Traps" of Intensive Cultivation

  1. Overstepping and weakening distributor functions In deep distribution, compared with channel warfare, channel weakening is an indisputable fact. Property rights are in the hands of the company, and distributors are only responsible for delivery and payment collection, descending from "God" to "laborer," with no guaranteed income. Coupled with excessive company involvement in the market and excessive weakening of channel status, channel members, when pushed to the limit, rise up and defect. Over time, the company, even holding the "brand" as a golden child, will be left alone.
  2. Self-imposed cocoon and increasing bloat. Due to the fine-grained nature of route cultivation, the "visit" scope often determines the company's market size. For example, Coca-Cola's full-order sales model achieves seamless coverage in high-end markets (large cities) but cannot leverage its advantages in "county and township" markets.
  3. The market always changes faster than marketing. Deep distribution systems need timely upgrades. China's rapid economic development has brought significant changes to many channels. For example, Coca-Cola's 101 system initially set up "visit positions" based on channels, ignoring internet cafes, special channels, and other new venues that have become popular in recent years. Pepsi, when designing its marketing model, emphasized these places, so in many markets, Coca-Cola's market performance is far below Pepsi's.
  4. When intensive cultivation meets intensive cultivation Focusing on regional market number one, competing for core distributors, controlling terminal networks, and establishing corporate customer advisors are several important indicators of deep distribution. In a local market, after the first mover uses these actions to make its brand number one, due to China's rapid market development, imitation is almost a fashionable strategy, and deep distribution is widespread. When a similar-level latecomer benchmarks against the former and confronts these indicators head-on, the first mover often finds it hard to turn around because the ship is too big, and with the opponent knowing both themselves and the enemy, targeted attacks may turn the first mover into a "pioneer" (i.e., a martyr). We might think: "It's okay, the first mover still has the brand!" But once under attack, without strong marketing execution as protection, the brand may be just a pitiful lifeline!

IV. Beer Industry Marketing from a Practical Case The following is a real-world attack and defense case between companies using different marketing approaches in the beer industry: Industry: Beer Location: Y Market Competitors: A Brand vs. B Brand Marketing Models: A Brand—Channel Warfare; B Brand—Deep Distribution Defense: A Brand; Attack: B Brand

Y Market Characteristics: County-level market, mainstream terminals mainly sell plastic-packaged products. Terminal consumer prices: hotels 2-2.5 yuan per bottle, small supermarkets 15 yuan per pack.

A Brand Market Description: Annual sales volume of 20,000 tons, two primary distributors, one brand with two main product variants. The manufacturer uses different variants to differentiate the two primary distributors' markets. Market share: 90%. Mainstream variant ex-factory price: 14.5 yuan per pack.

B Brand Market Description: Just entered the market, almost no distribution, single product variant.

Market Attack Steps:

  1. Starting in October of the entry year, B Brand selected 5 distributors in the county seat and stationed 5 route management personnel, establishing a branch office.
  2. From October, B Brand began market data collection: Step 1—"Street Sweeping." The county urban area had a total of 1,380 terminals, including 610 hotels and 770 supermarkets. Step 2—Channel Classification. Among the 610 hotels, there were 7 A-class stores (star-rated hotels), 271 B-class hotels (with more than 5 private rooms and annual sales above 1,200 packs), and the rest were C-class stores. Among the 770 small supermarkets, there were 445 community stores, 62 ordinary stores, 42 newsstands and cold drink shops, 56 wholesale outlets, and 5 large supermarkets. Step 3—Route Visits. B Brand divided terminals into 5 levels: target blank stores, distribution stores, mixed stores, agreement stores, and image stores. They began initial professional route visits, mainly focusing on: no distribution, but emphasis on door stickers and POP posting, and providing route personnel with some small gifts. The main goal was to build relationships with key terminal personnel. The supervisor's key check was: relationship building. Step 4—Initial Distribution. The county seat was divided into 3 distribution areas, corresponding to 3 distributors. Ex-factory price: 18 yuan per pack; terminal prices: hotels 3 yuan per bottle, supermarkets 2 yuan per bottle. They started small promotions and small-step distribution, setting distribution targets and special projects: route personnel had a daily order target of two, with rewards for exceeding. Distributors had a daily distribution target of 5, with rewards for exceeding. Reward standards were based on channel classification, e.g., B-class store distribution rewards were twice those of supermarkets. By the end of December, distribution rate reached 67%. A Brand didn't pay much attention, thinking the 3-yuan price would be hard to push, and since it was winter (off-season), sales volume was low. Also, B Brand's per-store distribution was very small, with some stores only getting two packs, totaling only 5,000 packs. Step 4—Awareness Stage. In January of the following year, B Brand began the following actions: using POP, price tags, etc., for professional price communication, hotels at 3 yuan per bottle. They also started displays at bars and shelves, but the turnover rate that month was not high. B Brand's salespeople visited the market and, after checking empty bottles in hotels, found few A Brand empty bottles. They didn't care, thinking B Brand's price was higher and the taste differed from the local mainstream! Step 5—Attack Begins. At the end of March, B Brand started to exert force, focusing on 271 B-class stores with a distribution of 20 packs per group, and began agreement-based paid table displays, placing 4 bottles per table, all given free at the end of the month. Within 7 days, B-class store distribution reached 90%. A Brand began to feel something was wrong and also started competing for table displays in hotels. The company approved 500 tables per month for promotional beer, but the distributor only executed 160, with the rest intercepted by the distributor. A Brand had only one sales representative in Y Market, who spent his days playing mahjong in a hotel and collecting travel allowances. Step 6—Deep Attack—After successful distribution in B-class stores, in mid-April, B Brand conducted stack display activities in 445 community stores: buy 10 packs, display at the entrance daily, and receive 2 packs free monthly, with coordination for local urban management support. By the end of April, community supermarket distribution exceeded 80%. A Brand began to panic, organizing customer promotions for distribution. To avoid duplicate promotions with township markets, A Brand required distributors to accumulate 200,000 bottles of promotional volume within 10 days. One distributor, to increase volume, sold some goods to townships, which was complained about by another customer to A Company, leading to a lawsuit between the two. Step 6—Killer Move—While A Brand was busy dealing with this, B Brand's hotel market began to move volume. B Brand's 5 route personnel started negotiating with B-class store owners: if they exclusively sold B Brand, they would receive 10-30 packs of beer as a reward each month. By May, A Brand lost 80 hotels, mostly local specialty stores. A Brand was shocked and hurriedly signed exclusive agreements, requiring all stores to be signed within 10 days. Since A Brand's sales representative was unfamiliar with the market, they had to rely on distributors to sign agreements. In a confused state, they signed annual exclusive rights for 390 hotels, totaling 3.1 million yuan in costs. Many were C-class stores that only sold a few hundred packs a year. A Brand only invested 300,000 yuan in promotions. Step 7—Feint to the East, Attack to the West—In June, due to A Brand's exclusive agreements, B Brand shifted focus to barbecue night markets. Through professional night market delivery suppliers, they made the 75 barbecue night markets in Y City's urban area the focus of distribution, organizing personnel to help the delivery supplier. Overnight, they distributed to all night markets in the urban area. A Brand's distributor hurriedly reported to A Company and applied for promotional support. A Company approved it, but at this point, the two distributors again fought over unfair promotional allocation, leading to another lawsuit. Step 8—Setting a Trap—B Brand did not take further action against A Brand's exclusive agreements. Instead, they focused on C-class stores and supermarkets, with route personnel taking orders: buy 20 packs, get 3 packs free, for one week. A Brand, upon learning this, quickly used the same promotion to intercept. After a week, B Brand switched to a 10-pack-for-1-free policy to spar with A Brand. A Brand had to continue its promotion. After two weeks, some promotional beer began to flow to townships (where there were basically no promotions). Helpless, A Brand had to launch a 10-for-1 activity across the entire market. But the most serious consequences began to emerge: not only did A Brand's prices start to loosen, but some areas began "naked price" shipments. At the same time, A Brand suddenly realized it had fallen into its own promotional "trap": it could no longer settle accounts with distributors because, in May, total sales were 2.7 million bottles, and the exclusive store policy did not include any promotions, but sales could not be calculated, so all 2.7 million bottles had to be settled as promotional. To change this situation, the company hurriedly changed product variants and trademarks to differentiate exclusive stores from other terminals, but suddenly a "strange wind" blew through the market: A Brand had counterfeit liquor! Step 9—Kicking Someone When They're Down—At this point, A Brand was already "in a flurry," with salespeople like headless flies, overwhelmed. B Brand began quietly targeting A Brand's "exclusive" stores, using case-by-case promotions and gifts to infiltrate some A Brand exclusive stores. Since some exclusive stores were served by A Brand's secondary distributors, B Brand even managed to convert these stores into its own "main" selling stores without anyone noticing, to the point that A Brand's stores, which received 50 packs monthly, only sold 100 packs of A Brand per month, with the rest being B Brand. Step 10—Luring to Kill—A Brand began to notice its market problems: in terms of price, there was a 3 yuan per pack gap with B Brand. Its own price system was also collapsing, and the market was in trouble. So they hurriedly organized a "product replacement," replacing the old product with a new one at 18 yuan, with the distributor's purchase price (18 yuan per pack) being the ex-factory price, implementing monthly deductions and hidden deductions. Distributors were skeptical and unstable. At this critical moment, A Brand's product replacement was extremely difficult. Since it was already July, and the product that had been adapted to for years was being phased out, terminals did not accept the new product, and distributors were uncertain and not very supportive. At this critical juncture, some of A Brand's replacement products from townships inexplicably hit the county market at an ex-factory price of 17.2 yuan per pack. One of A Brand's distributors thought another distributor was deliberately dumping goods, and the two sides came to blows...

From the above case, we can see the difference between traditional marketing models and modern marketing models. Currently, the era of traditional channel warfare is gradually fading from the mainstream.

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