---
title: "First-Tier City Manager: First Check the Market, Then Diagnose the Distributor, One Upgrade Lasts Three Years"
description: "After the Chinese New Year, city managers face increasing pressure as community group buying platforms disrupt the market. This article advises city managers to conduct a comprehensive market check and distributor diagnosis, then upgrade the distributor network strategically—an upgrade that should last three years."
author: "许翔 Ryan Xu"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-03-08"
language: "en"
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# First-Tier City Manager: First Check the Market, Then Diagnose the Distributor, One Upgrade Lasts Three Years

> After the Chinese New Year, city managers face increasing pressure as community group buying platforms disrupt the market. This article advises city managers to conduct a comprehensive market check and distributor diagnosis, then upgrade the distributor network strategically—an upgrade that should last three years.

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After the Chinese New Year, returning to work, Lao Wang's forehead has noticeably more white hair. The job of a city manager is getting harder to handle...
At the beginning of the year, the strong entry of major community group buying platforms made the already turbulent market competition even more confusing! A year ago, home-delivery e-commerce was still a new channel, but now it has become a traditional channel...
The better you are at managing the existing business, the more reluctant you are to change. The more capable your team has been, the harder the iteration.
Many previous articles have discussed the practical management of first-tier city managers. In the current era of new retail and omni-channel distribution, city managers can no longer rely on habitual thinking and existing conventional tactics to do business. As the frontline marketing organization of every FMCG company, the upgrade of organizational capabilities is urgent.
In addition, as the most core partners in each city market, distributors also need to upgrade and iterate in this round of FMCG marketing transformation. First-tier city managers must not only improve themselves but also lead distributors to achieve market network upgrades and iterations.
When it comes to distributor upgrades and iterations, many city managers think about whether to replace distributors or develop more new distributors for new retail and new channels.
**No! Neither replacing distributors nor opening new distributors should be a rigid indicator action for city managers to cope with their superiors.**
Under the new retail and new situation, city managers should plan the coverage strategy of local business in an organized and orderly manner based on the latest local market environment, and then match corresponding distributors, check distributors, empower distributors, and if necessary, even eliminate distributors.
**1. First check the market—combine internal and external, comprehensive check;**
**2. Then diagnose distributors—see the reality through the surface;**
**3. Fully upgrade the network—one upgrade, effective for three years.**
**-01-** **First check the market—combine internal and external, comprehensive check**
Why check the market? Because the overall industry marketing environment has changed, so we give the market a comprehensive check. Maybe every first-tier city manager does a physical check-up every year, but few city managers do a check-up on their market.
Many city managers have been stationed in one place for years, familiar with the local area, leading a group of people, and very familiar with local distributors. Day after day, year after year, they rarely have the mind or motivation to comprehensively and professionally review and diagnose the market.
It's time for first-tier city managers to step out of the daily details of distributor management, take a bird's-eye view, and examine and check the market you know best but also "most unfamiliar." Use external and internal data analysis tools to rationally and objectively analyze market data, and avoid making decisions by intuition.
Specifically, how to look?
**1. Macro data looks at the external**
**2. Micro data checks the internal**
**Macro data mainly includes market category capacity, category trends, category share, category distribution, category single-point selling power, category shopper decision tree, and category competitive brand analysis.**
Regarding category capacity, the main reference is the consulting company AC Nielsen data. Of course, AC Nielsen data is mainly at the provincial level or for megacities like Beijing, Shanghai, Guangzhou, and Shenzhen, and does not go down to prefecture-level cities. However, the provincial market capacity trend can be directly referenced by the prefecture-level cities under it.
City managers can extrapolate based on the provincial category capacity data using economic percentages; or they can ask peers about the market's share of the province to roughly estimate the category capacity of their city.
Category capacity often determines the ceiling of the business, while category trends determine the future of the business. Regarding category trends, you can refer to data from the past one to three years, divide by channel dimension, and predict the growth expectation and increment range for the next year.
For example, if E-RTM has grown 30% in the past two years, and you ask Retail Link and Jingxi Tong about their growth expectations in your city for the next year (about 50%), you can proportionally estimate the next year's growth rate. Other channels like O2O home delivery might grow 50%, offline hypermarkets and supermarkets might drop 5%, and wholesale might drop 20%.
As a first-tier city manager, you should clearly grasp the growth expectations of major channels. If you can't calculate this account clearly, you can't be considered a qualified city manager. In the past, city managers worked with their heads down, doing whatever came their way, but now it's different. The business environment has become more complex, requiring us to do comprehensive channel experience and analysis.
**Category share, also known as market share,** Do your competitors have a larger share or does your brand? In local online business, are competitors growing faster or slower? Is offline business being taken by competitors? Knowing yourself and your enemy is the only way to know that your daily actions directly affect the rise and fall of market share. You must have a rough idea of your local market share status.
**Category distribution, here the core refers to weighted distribution and numeric distribution.** Numeric distribution reflects the quantity of distribution, while weighted distribution more directly reflects the quality of distribution. Also, category single-point selling power is used to measure the quality of social sales at each outlet, and it is also an important value that directly affects market share.
**Regarding the category shopper decision tree, this is also very important.** It is also the key element that can determine the winner or loser for distributors, in addition to daily operations, logistics systems, financial systems, and distribution response systems. Through the category shopper decision tree, you can judge the distributor's ability to understand and gain insight into local shoppers.
For example, an excellent distributor will tell you who beer is mainly sold to locally, and how it is sold at target outlets: Is it mainly consumed in restaurants or supermarkets? If in supermarkets, is it price-first or brand-first?
For example, a distributor of daily chemicals will tell you that toothpaste priced at 15-20 yuan sells best, and mint flavor sells best. If you put toothpaste together with dental floss and mouthwash, sales will increase by how much. This is a truly high-quality distributor who understands local consumers.
Insight into the category shopper decision tree can truly reflect the level of each distributor, but in reality, many distributors easily overlook this.
**The reason local distributors can survive is that they understand local market channel characteristics and consumer needs well enough.** But often, traditional distributor bosses hand over this capability to manufacturer personnel, gradually becoming lazy, and then problems arise. Distributors can only slowly become logistics distributors, losing their dominance over the market.
Excellent distributors will proactively discuss business with city managers, such as promoting more anti-hair-loss shampoo in the local market to meet the rapidly growing category demand. And how to promote anti-hair-loss shampoo, in what channels, at what price, and with what promotions—all these details require distributors to accumulate daily insights and analysis of local shoppers.
In fact, the category capacity and category share we mentioned earlier are just results. What is the process?
In fact, we rarely deliberate and think about how to make the process better. Only when the process is done well will the results naturally be good! We must firmly focus on local shoppers. Only by understanding their purchase decision tree and fully understanding shoppers can we achieve full penetration. Your product selection, pricing, promotions, and sales aids can be combined more efficiently.
For category competitive brand analysis, how is the competitor's network structure divided? How many distributors do they have and how are they divided? How many core explosive products do they have and what are they? How are their distribution strategies designed? All these need comprehensive sorting and research.
Many of the above contents have not been considered by many city managers in the past, but since **it involves the iteration and upgrade of the city distributor system, you must complete this set of actions, and sort out the market from inside and outside in all channels.**
**After looking at the external, look at the internal.**
Because each manufacturer's situation is different, here we only discuss the analysis path.
First, of course, is the 4P (Product, Price, Place, Promotion). Having only primary sales data is far from enough. City managers should deeply focus on secondary data, mainly at two levels:
**One is distributor shipments;**
**Two is terminal store shipments.**
What needs a comprehensive check and diagnosis is not the distributor, but the entire market! Every first-tier city manager must keep this in mind. Sometimes city managers report local market business by only discussing distributor business reviews. However, checking the market is not checking the distributor; making a few PPT slides is not enough.
Distributors are only part of the market. As a city manager, you should combine external and internal data from all aspects, diagnose comprehensively inside and out, so as to find the real pain points of the business, prescribe the right medicine, and lead distributors to achieve high-quality distribution and precise coverage.
**-02-** **Then diagnose distributors—see the reality through the surface**
In the new retail and new omni-channel era, distributors face not only "old chronic diseases" but also many "new discomforts." Although many distributors now say they don't know how to do new retail, looking back, many distributors haven't done well in old retail and old channels either.
What are "old chronic diseases" and "new discomforts"?
**"Old chronic diseases" are the difficult and complicated old problems left over from the traditional distribution era; "new discomforts" are the difficulties of getting on board under the impact of new retail. Not only can't they handle Pinduoduo, they can't open Taobao stores, they don't understand community group buying, and they are confused about B2B.**
Corresponding to the old problems and new confusions of distributors, first-tier city managers also have two bottlenecks! That is, the bottleneck of existing business and the bottleneck of incremental business. The efficiency improvement of old retail existing business is about your current performance, while the increment of new retail is about your future growth. Both must be grasped, but remember not to forget the existing business for the sake of increment; putting the cart before the horse is not advocated.
After diagnosing the market, city managers should sort out the existing distributors responsible for the existing business. This is the basic plate of a city market, the "bottom warehouse" of a city manager! The dimensions for sorting out existing distributors generally start from **capital strength, vehicle configuration, personnel quantity, business awareness, distribution capability, promotion capability** and other indicators. Each city manager should establish a set of standard distributor profiles that match future business development.
For the check and sorting of distributors carrying future increments, you should not only look at the capability match of existing customers, but also examine all potential cooperative distributors in the local market with an open mind.
In this regard, **the new measurement standards should be more about whether the distributor has a new retail operation team, whether they have a warehousing and distribution supply chain system that matches new channels, and whether they have distribution zones suitable for home delivery and community group buying businesses, etc.**
**-03-** **One upgrade, effective for 3 years**
After combining the comprehensive diagnosis of the local market and distributors, city managers should start thinking about how to iterate and upgrade the distributor system. It must be emphasized that this is not a short-term tactical thinking, but a strategic consideration and layout based on the long-term sustainable development of the local market for the next 3 or even 5 years.
One upgrade is effective for three years! Every **city manager does not have the opportunity or resources to upgrade the distributor network every year.** A city market's network cannot withstand such tossing. **Once every three years is the normal metabolism and appropriate upgrade frequency.**
First-tier city managers should step out of the specific actions of daily distributor management and think about the layout of the distributor network from the perspective of overall city market planning. **The layout upgrade of the distributor network must not be a high-frequency decision action, but a low-frequency one. It is better not to do it than to do it wrong!**
Many city managers, when under sales pressure and whipped by their superiors, quickly open two customers to push goods. As for the future, if it doesn't work, they close them and open two more... This kind of short-term thinking must be resolutely eliminated; it is harmful and of no benefit!
High-frequency opening and replacement of distributors is actually a disguised form of gambling, definitely not the mentality of seriously and continuously operating the market. The core strategy of first-tier city managers should be—**No matter how the market changes, the distribution structure and sales rhythm must be stable!**
A city manager and their team's brand, in the daily marketing execution of a prefecture-level market, cannot achieve the optimal in every step, but it is enough to achieve long-term optimal.
So how to lay out the distributor network and maintain long-term optimal?
**1. Which distributors should maintain existing business and steadily upgrade?**
**2. Which distributors should expand their existing plate and actively grow?**
**3. Which distributors should shrink their existing base and gradually replace?**
**4. Which distributors should be newly opened to gradually take over and cover the replaced customers?**
**The first type: determine which distributors should maintain existing business and steadily upgrade.** Absolutely do not replace all distributors just because new retail has arrived. "Maintaining stability and growth" is always the main theme of the FMCG market. Maintaining a stable base of customers accounting for 50% or more is the safest "moat" for a city's business.
**The second type: determine which distributors can expand their existing plate and carry future high-speed growth.** These distributors often fully embrace new retail in mentality and have the ability to operate new channels. Fully support such distributors.
Encourage them to try emerging businesses like B2B and community group buying, assist them in recruiting and training new retail talent, and guide them to achieve full-speed growth in the new track. This type of distributor should account for at least 30% of your network upgrade business proportion in the future.
**The third type: determine which distributors should shrink their existing base and gradually replace.** These distributors may have outdated thinking, or they may have made money in previous years and don't want to work hard anymore, preparing to retire comfortably. At the same time, they don't want to learn or do new retail. These distributors should be phased out gradually, and their business proportion should not exceed 20% at most.
After gradual replacement, who will take over?
**The fourth type: precisely open new distributors.** Every era has a group of young entrepreneurs who want to make money, have ideas, drive, and capital. Let them take over the territories of the third type of customers; they will surely be the new explosive points and new hope for sustainable growth in the local market.
The above are the four actions for the iteration and upgrade of the distributor structure in the market under the jurisdiction of first-tier city managers. Frankly speaking, facing the new market environment, the upgrade of the distributor network is urgent.
City managers should adapt to the times and the situation in the layout of the distributor network, taking into account both the efficiency improvement of existing business and the mining of increments. On one hand, look up at the road; on the other hand, bury your head in pulling the cart. Long-term strategies must be adhered to, and short-term execution must be fought to the end!
How long has it been since you read a marketing book to enrich yourself? How long has it been since you walked through the new and old channels of this city? How long has it been since you visited distribution customers in counties, towns, and townships? How long has it been since you properly reviewed your most familiar market? How long has it been since you calmly made an annual market plan?
The industry is changing, the channels are changing, but the original intention of every first-tier city manager must not change!
Standing at the entrance of a familiar supermarket in this city, Lao Wang always thinks of the young Wang who just entered the industry, full of vitality every moment, facing the sun every day! Yes, that is the look of growth!
Every child who loves home will one day raise the sail to sail far away. Every current market must wave goodbye to past practices. Every nostalgic Lao Wang should pack up his mood and embrace the new omni-channel.
Bio: Xu Xiang, currently Sales Director of Unilever South China, with 20 years of experience in FMCG daily chemicals, dairy, and condiments, deeply engaged in regional market management and customer marketing, willing to exchange and learn with peers for common progress. The above article only represents personal views.


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