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Distribution is a major task that FMCG companies and sales personnel cannot avoid. Throughout the year, there are several key events: distributor meetings, second-tier distributor orders, initial distribution at the start of the year (including new product launches), terminal promotion activities, and consumer publicity and promotion campaigns. (Interspersed among these are regional planning, organizational structure, channel construction and optimization, team building, etc., which will be discussed separately.) If these tasks are completed well, the year will likely yield good results; if not, performance may be mediocre or even disastrous.
Why is distribution so important? This is determined by the characteristics of FMCG: fast, wide distribution, impulse buying, and random consumption. Simply put, it ensures that customers can see, buy, and buy conveniently, as many purchases are not pre-planned but random. Statistics show that over 30% of FMCG purchases are unplanned, making distribution and managing consumer touchpoints crucial.
Step 1: Understand the Basic Market Situation. First, understand the product positioning and consumers, competitive products, and the overall market, channels, and terminals. These are foundational tasks that must be done in advance. If a product is positioned as mid-to-high-end, distributing through ordinary small shops will be ineffective; if sales are poor, you'll have to retrieve the products, which also hurts market confidence. You also need to understand customers: their thoughts, purchasing psychology and behavior, and preferred purchase locations. Additionally, ensure the distributor has sufficient stock.
A profound example of how product and consumer positioning affects distribution comes from my personal experience. Many years ago, right after graduating, I was assigned to a regional market where a new, relatively expensive product was launching. At that time, it should have targeted restaurants and nightlife venues (though the company had no overall promotion strategy or guidance, leaving it to our discretion). Everyone worked independently. I rode a distributor's tricycle with their salesperson to distribute to small shops (grocery stores, small supermarkets) in the city. Over three days, we covered about 30-40 shops (cash on delivery, with gifts). A week later, we followed up and found almost no sales, so we retrieved the products. It was hard to get in because these shops were not where target customers bought, nor were they primary sales venues. Fortunately, it was a small city; what if it had been a large city?
Now you might say these products shouldn't be sold there; you need precise distribution, terminal push, staff recommendations, and consumer pull. But back then, no one told you how to do it, and there were no marketing or sales guidelines or execution plans!
Understand the primary sales channels, as they are the fundamental source of sales. For beverages, small shops and chain convenience stores are top priorities for distribution, followed by hypermarkets, supermarkets, and special channels. Don't lose the main chance for minor ones.
Step 2: Develop a Distribution Plan and Execute. First, set clear goals: distribution area, volume, terminal types and quantities, all quantified. Specify target distribution rates for each terminal type and overall. Second, survey all outlets in the region to identify suitable terminals, then plan routes and number them (route planning is a separate topic). Third, determine which terminals to prioritize. For beverages, small shops are the first choice. For example, in the first round, cover all selected small shops without skipping any; achieve a 40% distribution rate in the first round, 60% in the second, and 80% or more in the third. Fourth, decide on the distribution method: accompany the delivery vehicle and require cash on delivery. Why? Because without payment, they have no sales pressure. Fifth, prepare materials and gifts for distribution. Increase gift allocation but collect cash for the products. Sixth, conduct pre-distribution training, including problem-solving and sales pitches. What if a customer says your product is expensive? What if they ignore you or are dissatisfied?
When a customer says the product is expensive, what do they really mean? If your product were selling well, they wouldn't say that, because expensive products generally have higher margins. They say it's expensive because they're worried it won't sell. If a customer is dissatisfied with what you say, it's not about your product but about you personally.
Next, divide labor: typically 2-3 people per group, working along routes. Centralized distribution is more efficient. Also, budget for expenses like free goods and gifts. Finally, arrange vehicles and goods.
Step 3: Drive Sell-Through. After 2-3 rounds of distribution, products are in terminals. Now you need them to sell and be consumed, which is the basic purpose of distribution. How does sell-through happen? Importantly, the channel must have push power, meaning your price system design should motivate the channel. In the mainland market, the channel's role is undeniable. Second, your display and presentation should generate consumer interest and stimulate purchase. Third, activities and personal selling are also important in domestic FMCG, serving as sales promotion and terminal interception. Finally, systematic visits and maintenance build customer relationships, which is also a form of resource integration and a key part of sell-through.
Step 4: Overall Consumer Pull. If distribution and sell-through are well done, you should implement overall promotional activities to drive sales. For example, combine with activities like prize sales, buy-one-get-one, free samples, discounts, etc. If the product quality is excellent, you can also do brand-level activities like roadshows in large squares or communities, which can be very effective. All new product promotions, such as discounts or special offers, must be handled carefully: a principle is to ensure that the launch announcement and distribution have reached a high level, meaning there is some awareness and perceived value.
Step 5: Monitor, Evaluate, and Improve. For regions with poor sales, analyze the reasons: is it poor distribution, unsuitable sell-through plans, or inadequate market maintenance? Find the core causes and improve. For new product launches or distribution, use daily reports and monitor sales progress at key terminals. If some terminals are slow, consider product exchange or retrieval. During launch, "seeking momentum" is the top priority, while "seeking volume" comes later. Once momentum builds and product turnover is smooth, sales will quickly rise.
Distribution and ensuring distribution rates are critical tasks for FMCG launches. Strive for maximum exposure and visibility. Remember, for a mass-market FMCG product, increasing visibility is the first priority for a new product launch.