---
title: "Detailed Management of Regional Market Channels"
description: "Building key regional markets has become a consensus in corporate marketing, and forming regional advantageous markets is the only way for many small and medium-sized enterprises to concentrate superior resources against big brands. With a 'base area', enterprises can advance or retreat, supporting their survival and growth. This article details the five major aspects of channel management in regional markets."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2015-04-03"
language: "en"
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---

# Detailed Management of Regional Market Channels

> Building key regional markets has become a consensus in corporate marketing, and forming regional advantageous markets is the only way for many small and medium-sized enterprises to concentrate superior resources against big brands. With a 'base area', enterprises can advance or retreat, supporting their survival and growth. This article details the five major aspects of channel management in regional markets.

Building key regional markets has become a consensus in corporate marketing, and forming regional advantageous markets is also the only way for many small and medium-sized enterprises to concentrate superior resources to compete with big brands. With a 'base area', they can advance or retreat, supporting the survival and growth of the enterprise, and continuously strengthen.

Classic marketing textbooks tell us that the main contents of marketing channels include: channel design, channel structure, channel selection, motivation, evaluation, channel conflict resolution, channel management, optimization, channel promotion, etc. As for channel management alone, it includes five major aspects: first, channel flow management; second, channel member management; third, channel relationship management; fourth, channel performance management; fifth, channel difficulty management.

Let's first talk about how relatively theoretical channel management is carried out.

First aspect: Channel flow management. The specific content of channel flow management mainly includes five aspects: commercial flow, logistics, capital flow, information flow, and promotion flow. Managing these five aspects well ensures at least that the market will not be chaotic. Only when basic market management is sound can there be 'long-term stability'.

For example, commercial flow: some sales personnel may not be clear about this concept. Commercial flow refers to the transfer of ownership, which is also a very important standard for distinguishing agents from distributors. But it is not limited to this. After distributors pay and goods are shipped, how do we assist distributors in developing the market, establishing distribution and terminal networks, and ultimately form help, guidance, and control over distributors?

Look at logistics. E-commerce is very popular now, but the essence of e-commerce is logistics. Taobao and Tmall are powerful, but without logistics support, how can sales be achieved? On Double 11, Alipay transaction volume reached 19.1 billion yuan, but delayed shipments of more than a week were common. JD.com's self-built logistics and Suning's self-built logistics are the core competitiveness of B2C e-commerce. For example, in the beer industry competition, why ultimately implement cross-province mergers and acquisitions? Because beer's radiation capacity is very weak, and generally non-adjacent provinces are difficult to penetrate.

Capital flow: everyone should be clear about this. How to manage cash flow, payment time, whether it is cash on delivery or shipment first, or credit. Generally, now it is payment before shipment; but some key customers, due to long-term cooperation, can have an authorized credit limit, and within the credit period, payment can be delayed; accounts receivable are mostly formed this way.

Information flow: the collection, sorting, and feedback of information should form a system, and there must be replies and feedback. We see many sales managers treating market information collection as a formality. Daily and weekly meetings also become a formality. Over time, without feedback, collection stops. In this regard, many Chinese companies do very poorly and are not in place.

Promotion flow: promotion planning, implementation, control, and evaluation. Promotion is a very important part of corporate sales. A good promotion activity can not only increase sales and train the team, but also enhance brand influence, improve relationships with channel partners and terminals, and stimulate team cohesion. In the promotion process, there are various stages such as expense application, review, execution, and reimbursement. How can we ensure that expenses are actually used? Whether it is borne by the distributor or paid by the enterprise first, and how to reimburse these expenses, all need to be considered. Finally, there is activity evaluation, including sales target completion, expenses, personnel, activity response, shortcomings, and improvement measures.

The second aspect is channel member management. It also has five aspects: selecting channel members, training channel members, motivating channel members, evaluating channel members, and adjusting channel members. The selection of channel members, first of all, is the selection of distributors. The only standard is suitability. How to determine suitability depends on the market and enterprise situation. The basic requirements are to cooperate with the manufacturer's marketing work, actively develop and maintain the market; have certain funds, networks, warehousing, and personnel. For new markets, distributors are required to have market development capabilities and downstream networks, and the requirements for the team are also higher; if it is a mature product, strong financial strength and distribution capabilities are needed. These should be treated according to specific circumstances. The role of distributors is very important for channels. If chosen improperly, there will be endless troubles.

Next, we also need to select and build networks for second-tier distributors (special second-tier distributors) and even third-tier wholesalers. The distribution network should be extensive, direct, and effective, allowing products to quickly cover terminals and consumers to conveniently purchase products.

Third aspect: Channel relationship management. This mainly discusses channel conflicts. There are three types of conflicts: first, vertical conflicts, conflicts between manufacturers and distributors, and between distributors and their sub-distributors; such as payment, discount rates, incentive policies, product supply in peak and off-peak seasons, market promotion support, and channel adjustments. Second, horizontal conflicts, conflicts among channel members at the same level, such as conflicts between distributors due to different regional divisions, incentives, and promotion policies. For example: price confusion, unbalanced product supply, different promotion methods, encroaching on territory, and cross-regional selling. Third, cross conflicts, conflicts between different types of channels. For example, inconsistent prices, cross-regional selling, etc.

Fourth aspect: Channel performance management. In fact, it is the motivation, assessment, and improvement of channel members. First of all, it is the assessment and motivation of distributors; distributor management is the top priority of regional market channel management. The key point is: result and process indicators should be set reasonably, and we must not only focus on results and ignore the process. Channel chaos: a few hundred pieces of goods can destroy a market, and many cases are still vivid. The indicators of channel performance management can be roughly divided into: 1. Sales volume (sales amount) indicators: should be divided by product, channel, terminal, and specific personnel; 2. Network construction: distribution network, terminal network coverage; 3. Payment collection; 4. Distribution, price control, healthy market development; 5. Various purchase rewards, year-end rebates; 6. Promotion and promotional activity execution; 7. Team building, etc. All should have specific assessment weights and be evaluated monthly.

Fifth aspect: Channel difficulty management. Mainly three points: first, payment collection and credit period; second, regional management; third, terminal management. Involving financial indicators, payment collection is the primary issue for the smooth operation of the company. As for the credit limit for distributors, how to design it scientifically and safely is also a test of wisdom. Regional management: the region is the distributor's rice bowl; without a region, there is no living space. The issue of regional size also needs careful consideration. How to achieve effective coverage without conflicts, and not under-develop, giving opportunities to competitors. Finally, terminal management: the terminal is where the product comes into contact with consumers and completes the value exchange. Channel management completes the final kick by continuously lowering the center of gravity to the terminal.

The above are the five major aspects of regional market channel management taught by classic marketing theory.

If we combine this with specific regional market cases, what should a grassroots salesperson and supervisor do?

First, manage core distributors.

In channel management in regional market management, a very important content is to grasp core distributors and key second-tier wholesalers. Relying solely on the enterprise's own strength, it is difficult to effectively control terminals. Sales personnel should find and cultivate core distributors according to the characteristics of the regional market, form a reasonable distribution and division of the region, ensure that distributors are profitable and have development space, but at the same time, the enterprise should also form a balance of power among distributors in the region. A large region can be divided into several small regions, implementing exclusive distribution in small regions, and separate distributors can be set up in counties and towns.

Second, build a distribution network around core distributors.

Building a distribution network around core distributors can first help distributors grow, and also to thoroughly penetrate the market, increase sales, and enhance market control. The channel continues to sink, resisting the erosion of the market by competing brands.

The power of distribution is one of the most core winning factors for FMCG. Each region must establish the progress of the regional distribution network, evaluate and optimize it.

Form a competitive channel model.

The channel model determines channel strategy. There is always a model that is the main channel model for your enterprise's regional market. Some adopt general distribution; some adopt small regional exclusive distribution; some adopt office platform + assisting distributor distribution; some adopt office platform + distributor direct supply to terminals (deep distribution). Generally, the latter two are more common and more conducive to deep market development.

Develop special channels at a deeper level.

If the development of conventional channels enters a stable period and the market potential has been tapped to a deep level, you can selectively enter special channels. What are special channels? They are special channels other than conventional wholesale circulation, hypermarkets, chain supermarkets, convenience stores, small shops, and catering, including airports, docks, factories, residential areas, internet cafes, etc. These channels are difficult at the beginning, but once cooperation is established, sales are stable and more conducive to long-term stable cooperation.

Form an overall channel assessment and incentive mechanism.

Channel stability and improvement require not only selection and cultivation, but also benefit distribution and guidance. Only with institutional guarantees can there be sustained and healthy development. Channel assessment is divided into sales target completion assessment, distribution network construction, effective outlets, new product promotion, distribution capability, team, business awareness, cooperation, service level, etc. Channel incentives are divided into rebates (can be based on task volume or year-end fuzzy rebates), purchase tier rewards, team personnel support, material support, prepayment purchase rewards, etc. Of course, various processes and systems also need to be constrained and motivated. Those who complete should be rewarded, and those who do not must have punishment measures.

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