---
title: "How First-Tier Brands Defend Against Second- and Third-Tier Brands Eroding Their Market Share"
description: "This article is excerpted from Mr. Fang Gang's book \"FMCG Veterans All Do This: Regional Manager Playbook.\" It discusses how base markets, characterized by high distribution and share, can be undermined by terminal blind spots and blind zones, and provides six strategies for defense, including process management, information flow, channel barriers, and competitive suppression."
author: "方刚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2016-06-08"
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# How First-Tier Brands Defend Against Second- and Third-Tier Brands Eroding Their Market Share

> This article is excerpted from Mr. Fang Gang's book "FMCG Veterans All Do This: Regional Manager Playbook." It discusses how base markets, characterized by high distribution and share, can be undermined by terminal blind spots and blind zones, and provides six strategies for defense, including process management, information flow, channel barriers, and competitive suppression.

This article is excerpted from Mr. Fang Gang's book "FMCG Veterans All Do This: Regional Manager Playbook."
To purchase this book, click **"Read Original"**

**Introduction**

High distribution rate and high market share are basic characteristics of a base market. Behind these "two highs" are large sales volume and high profits. Many sales managers in base markets, supported by data, proudly boast: "There are no blank spots in my market!"

However, upon deeper inspection, behind the rosy picture, there are always some terminals that resist, sell less of our product, or even stubbornly refuse to sell it. These are terminal blind spots.

Every market has "nail households" (stubborn terminals)! The existence of blind spots is not scary; what is scary is that blind spots exist but are unknown! When terminal blind spots accumulate and connect, they form terminal blind zones. Over time, market fracture zones naturally form! Once a fracture zone forms, competitors can exploit it, and repair becomes much more difficult.

**How do first-tier brands defend against market erosion by second- and third-tier brands?**

Base markets carry the core sales volume and main profits of a company. Once they are overturned, the company falls into trouble. Relying solely on sales data analysis is far from sufficient. When sales fluctuate, it often means that blind spots, blind zones, or even fracture zones have already formed in the market.

**1. Assessment Key Points**

Demanding sales from base markets is what companies like to do most. Managers in base markets, driven by the sales baton, focus directly on **results** (including sales and profit), and are more likely to **neglect process management** (including distribution rate, visibility, terminal maintenance, and customer development indicators).

Sales assessment is not a panacea; in many cases, it can be highly destructive.

Marketing personnel prefer quick wins and actions directly related to sales, such as promotions, buy-one-get-one-free offers, and inventory loading. Everyone likes to pick up eggs, but no one can tolerate the long, arduous process of raising chickens. The result is bound to be terrible.

Therefore, in base markets, the assessment should **increase the weight of process management**. Even if corporate inertia prevents changing the model, a deduction-based model with heavy penalties for process failures should be adopted, strengthening inspections and visits to ensure process indicators are implemented.

**2. Smooth Information Flow**

Blind spots and blind zones are caused by information blockages. To defend a base market, it is essential to **establish a robust terminal monitoring system and sales monitoring system**.

**Terminal Monitoring:** Sales representatives report daily on the varieties, sales volume, and inventory of our products and competitors at visited terminals, compare with last week's data, analyze changes in the number of outlets, product varieties, and inventory for both our products and competitors, and submit weekly summaries. Finally, a monthly summary of distribution rates for each sales rep in the region is formed, including comparative analysis of terminal status between our products and competitors.

**Sales Monitoring:** Establish a daily sales report system and use performance analysis tools.

Terminal control is the core of process management. As long as terminals do not undergo major qualitative changes, sales fluctuations will not cause major losses. Once sales data becomes unstable, the above methods can trace the root cause of the problem.

**3. Clearing the Field**

In traditional corporate warfare, competitors penetrate through two main routes: **outlet penetration and channel penetration**.

Through the above operations, the sales rep visit management system has achieved effective monitoring of outlets, eliminating management blind spots.

Channel penetration is also a common method for competitors. Since in base markets, our products often sell well but are not profitable, distributors (or sub-distributors) may use the network built by our products as a platform to "piggyback" competitor products, taking advantage of the opaque profit margins of competitors.

At this point, building channel barriers is particularly important for base markets. A channel barrier means that all distributors and sub-distributors of our products must implement exclusive brand management (which can be compensated) and be included in regional process assessment indicators. If any distributor is found secretly selling competitor products, they will be penalized.

**4. "Three Scorched Earth" Policies**

**Policy 1: Set a control bottom line for competitor distribution rate; if it exceeds this line, it must be cleaned up.** If competitors cannot establish a foothold in outlets, they cannot achieve sales, and the threat naturally disappears. Competitors entering a desert area with no food or water will naturally die out.

**Policy 2: The off-season is when competitors are weakest; launch targeted strikes against them.** Especially in areas where competitors have high value and contiguous distribution, they should be cleared to zero.

Competitors are like weeds; they can survive a year with spring growth and autumn death, but we must resolutely prevent them from growing into bushes or trees.

**Policy 3: Create layers of obstacles in the business environment for competitors.**

Any distributor relies on sales to achieve profit; without profit, they cannot survive. As long as competitor outlets are brought under management surveillance, and with the dense visit system in base markets, competitors will be exposed to the sun and have nowhere to hide.

The advantage of playing at home is having deep local resources. There are many ways to obstruct the business environment of competitor distributors, such as poaching their sales teams or delivery drivers during peak seasons. In short, competitors must not be allowed to maintain high morale; they should be made to struggle and suffer, as this serves as a warning to others that selling competitor products leads to a bad outcome.

**5. Mine Sweeping**

**Customer complaint stores are landmines in the base market; once exploited by competitors, they will explode.** The premise of mine sweeping is knowing where the mines are and who is responsible for sweeping them, meaning a customer complaint handling process must be established. For persistent "nail households" that cannot be resolved, regional managers must bear management responsibility.

**6. Field Visits**

Data reactions are lagging and only reflect quantitative changes; only by going to the front line can you see signs of qualitative change. Listen to terminal owners' complaints, check sales reps' visit performance, inspect distributors' delivery service, and handle false information on the spot... Blind spots may still occur, but blind zones can be avoided, and fracture zones can be prevented.

**Link: Areas Prone to Terminal Blind Spots**

(1) Border Areas of Joint Defense

Market divisions are often based on administrative regions. At the edges of regional boundaries (or at the junctions of multiple distribution areas), dead corners are prone to form. Here, no one visits, no one delivers, and no one manages. Over time, these become the preferred areas for competitor penetration. Moreover, as blind spots and blind zones form, cross-region dumping and price undercutting occur, and after repeated abuse, outlets inevitably refuse to sell or reduce purchases.

(2) Customer Complaint Terminals

Service complaints: Untimely delivery causing stockouts and shortages.

Policy complaints: Incomplete notification of loading policies, missed or skipped stores, favoring one store over another; large deviations in single-store policies, leading to refusal to sell.

Management complaints: Distributors undercutting prices and dumping goods, withholding promotions, or not honoring commitments.

(3) Newly Opened Terminals: Not knowing when a new store opens, or when a terminal changes owners.

(4) New Types of Terminals: Channels such as KA hypermarkets, nightclubs/KTV, and e-commerce have different delivery methods and consumption characteristics compared to traditional channels. If the company's marketing management system cannot continuously monitor them, blind zones will form over time.

For example, regional brands often ignore or are unable to deal with national large-chain terminals, making them beachheads for competitors. Online shopping confuses many traditional companies, and group buying (festival benefits, conference liquor, wedding/funeral liquor) seems impossible to defend against.

If you find this article helpful and want to communicate with the author, please long-press the QR code below to add Mr. Fang Gang's WeChat, and reply with: **Learning**

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