On October 27, 2016, Anhui Kouzi Distillery Co., Ltd. (hereinafter referred to as Kouzijiao) released its Q3 2016 performance report, showing total revenue of 2.335 billion yuan for the first nine months of 2016, a year-on-year increase of 10.48%, with Q3 single-quarter revenue of 850 million yuan, up 5.89% year-on-year. Since the reconciliation of the two Kouzi distilleries in Huaibei, Anhui in 1997, and until its successful listing on the Shanghai Stock Exchange on June 29, 2015, Anhui Kouzijiao has maintained steady development. After careful analysis, we find that the healthy performance of Kouzijiao can be attributed to two main factors: First, benefiting from the release of the company's brand momentum and continuous adjustment of product structure, catering to trends such as the new round of consumption upgrade; second, the company's stable management capabilities, building a community of interests between manufacturers and distributors through the "plate-in-plate" model. Brand Momentum Accumulation and Product Focus As a leading enterprise in China's blended-flavor baijiu, Anhui Kouzi Distillery Co., Ltd. is located in Suixi County, Huaibei City, Anhui Province, which has a brewing history of over 2,600 years. In 1997, the Huaibei Kouzi Distillery and Suixi County Kouzi Distillery merged to form Anhui Kouzi Group, and the company has since continued to step onto the fast track of development and growth! "True storage, real cellar, sincere to the world," "Model of blended flavor" - as attentive consumers, you may have noticed that the appellation of Kouzi Distillery has been gradually changing over the years; from the earlier Anhui Kouzi Distillery to Anhui Kouzi Group, from Anhui Kouzijiao to China Kouzijiao. Whether it's the focus and positioning strategies in Trout's marketing theory or the "blockbuster thinking" in the Internet era, for a brand to succeed, it must first create a "core point," occupy the mental resources in consumers' category consumption, and then open up the "surface" of channels to build its own product and channel network system. Just as 53-degree Feitian Moutai holds its product position in Guizhou Moutai Distillery, 52-degree Wuliangye in Wuliangye Distillery, and Guojiao 1573 in Luzhou Laojiao, Kouzijiao is the "core blockbuster" of Anhui Kouzi Distillery Co., Ltd. Regardless of the product, the core is to cater to consumers' psychological demands for such goods. As long as the brand can meet consumers' current needs and allocate resources through channels, mechanisms, and personnel, it can achieve growth. Clearly, as a baijiu consumed by ordinary Chinese people, whether for government, business, wedding, or festive banquets, the consumption characteristics of baijiu determine that it is a "face project." In the late 1980s and early 1990s, people entertained friends and family at home, and ordinary people drank baijiu more out of life needs. At that time, baijiu consumption was basically dominated by low and medium prices, with bottled wine priced at 2-5 yuan being the mainstream consumption, and higher-end gift wines only around 10 yuan. From the mid-1990s onward, with the deepening of reform and opening up and economic activities, the consumption level of ordinary people improved, and the "restaurant and hotel" business format began to form. For the convenience of interpersonal communication, people gradually changed their habit of entertaining at home. Today, "hotels and restaurants" more often host ordinary people's wedding banquets and business activities. Coupled with the traditional Chinese culture of "emphasizing etiquette," in public settings, one must be presentable and maintain face. Hence, medium and high-end baijiu catering to the "face project" emerged! From the current product structure of Kouzijiao, the proportion of revenue from medium and high-end baijiu has continued to increase, exceeding 80%. In the past two years, the core large single products Kouzijiao 5 and Kouzijiao 6 years have maintained double-digit growth (accounting for about 60%). The small cellar wine and 10-year products in other regions have begun to enter the volume release stage, with growth exceeding 20%. Catering to the current consumption upgrade in "restaurants and hotels" scenarios, the company's product revenue structure has been further optimized, driving up the gross margin level and improving the company's profitability. Continued Assistance from the Plate-in-Plate Channel Model The "plate-in-plate" marketing model is currently a common marketing strategy in the baijiu industry, and among Hui liquors, "Kouzijiao" is an outstanding representative. As everyone knows, a few important customers bear the majority of sales, which is the "80/20 principle." The "plate-in-plate" marketing model essentially means that enterprises prioritize investing important resources in a few key distributors, hotel terminals, and core consumers, effectively developing and driving the entire market through control of these core resources. At the same time, it emphasizes the principles of concealment, flexibility, and synergy in resource use strategies. In practice, the "plate-in-plate" model focuses on seizing specific timing and nodes. From Kouzijiao's marketing practices of entering Nanjing in 1999, competing in Hefei in 2000, sweeping Xi'an in 2001, and surprising Wuhan in 2002 with the "plate-in-plate" model, it can be seen that Kouzijiao's model basically unfolds from strategically significant core central cities. By occupying the commanding heights of central cities and controlling local major distributors and core hotel and restaurant terminals, it achieves influential control over the secondary and tertiary markets in the region, thereby building a channel system that exerts influence on the local market. Unlike distilleries accustomed to deep channel cultivation, focusing on inventory pressure distribution, ground promotion, and manufacturer personnel operations, Kouzijiao, operating the "plate-in-plate" model, often grants distributors exclusive distribution rights in a city. Distributors enjoy higher channel gross margins, and the manufacturer does not excessively pressure inventory. Of course, higher profits mean that Kouzijiao imposes more stringent requirements on distributors. Generally, to become a local distributor of Kouzijiao, one must be a powerful major player capable of undertaking more market development locally. In addition to entering strategic markets at the right time to claim territory, the success of Kouzijiao's "plate-in-plate" model also relies on building a stable management team, with the senior management team led by Chairman Xu Jin maintaining steady and sustained operations. Furthermore, with a more stable benefit-sharing mechanism, the company grants distributors greater market operation authority and higher channel profit mechanisms. Distributors gain growth opportunities and are more willing to follow the company long-term. Additionally, Kouzijiao maintains strict discipline in its formal sales team management. A former employee who worked at Kouzijiao recalled that during their time at the company, employees often stood to be "lectured" and were repeatedly required to attend military training and training sessions at the company headquarters! Future Concerns and Suggestions for the Kouzijiao Model Anhui Kouzijiao's "plate-in-plate" marketing model is a successful case of a specific period; there are also certain concerns in operating such marketing strategies. First, the "plate-in-plate" model has now been widely referenced by many baijiu manufacturers. When the small plate is replicated to the large plate, will the effect still be effective? When enterprises operate the small plate, they often concentrate the company's elite forces to create a demonstration model (which can be described as operating at any cost). However, when scaled up to a larger market plate, execution actions often deviate. This requires a return to the essence of marketing, using mechanisms to ensure market management. First, identify the source of market increment; second, leverage the competitive advantages of key products; third, formulate corresponding marketing strategies for different markets, set key sales indicators, etc. Second, model restaurants and hotels in core central cities are constantly spoiled by numerous distilleries, with backend costs continuously rising. Blind operations by manufacturers and distributors may lead to situations with sales but no profit, and terminal operations often become homogenized and extensive over time. Therefore, on one hand, we suggest that manufacturers change the way they pay hotel fees. Just as hotels care most about consumer reputation, if we attract customers to hotel dining terminals through activities, gifts, and rewards to dining patrons, it will certainly be more meaningful than simply paying fees. On the other hand, with the increase in take-out alcohol and rational consumption by ordinary people, and the rise of tobacco and alcohol specialty stores and group purchase channels around hotels, we need to pay more attention to the distribution and construction of general alcohol terminals. In summary, it is necessary to segment and digitize alcohol sales in restaurants. For example, classify terminal attributes; set return evaluation criteria for fee investment; provide support for tobacco and alcohol stores. These are all considerations for cost-effectiveness, and these details are extremely easy to become profit leaks after market expansion. Systematic management must be used to plug these leaks. Third, the consumption scenarios of alcohol consumers are now diversified, the purchase methods of medium and high-end baijiu are increasingly diversified, and the influence of media on consumers is more fragmented. While consumers have requirements for product quality, their emotional needs are also rising. This evolution trend will impose more professional marketing requirements on Kouzijiao: Segmentation of consumer needs, segmentation of consumption scenarios, segmentation of product series, segmentation of price bands, segmentation of channel terminals, etc. If Anhui's Golden Seed failed due to its adherence to the 50-80 yuan price band and excessive product proliferation, then the lesson Golden Seed should learn is: keep pace with the times, lay out corresponding market segments based on demand segmentation, respond to the multi-scenario consumption needs of various types of channels and consumers, develop baijiu products that suit the occasion to address the long tail; supplemented by internet tools to improve management efficiency, develop more sales channels, link more consumption demand scenarios, support the new round of growth for distributors and manufacturers, and seek greater market returns. -END- The best FMCG distributor learning platform in China Dedicated to providing professional, practical, and applicable tutorials for enterprises and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent Article Selection | 002 Distributor Market Operations | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Improvement Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's Eighteen Skills | 013 KA Operation Methods and Strategies | 014 First Lesson for New Salespeople | 015 Internet, Brand | 016 Distributor B2B Transformation | [Long press QR code to follow]