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In marketing practice, we often encounter issues such as how to determine the optimal number of sales staff, allocate promotional resources, accurately forecast sales, quickly obtain market information, effectively check the work of sales personnel, and understand the flow of products in the distribution channel. By implementing a fine management strategy for distribution channels, we have achieved certain results and now share our experience with peers.

1. What is Fine Management of Distribution Channels?

Fine management of distribution channels is a sales management operation method targeting all links in the retail terminal and wholesale distribution channels. By dividing the target market area and providing meticulous service and management to all sales outlets in the channel—including designated personnel, areas, points, routes, periods, and times—it achieves comprehensive control over product sales and competition in the market, establishing the company's competitive advantage in the channel.

Implementing fine management is based on two points: retail terminals are the places where the exchange value of products is realized; only sales at retail points are true sales, and building the channel is a means to achieve this goal. Market information from sales terminals is the most effective information.

2. Content and Forms of Fine Management

The core content of fine management is quantitative management of retail terminals and related levels.

  • Personnel Quota: Allocate personnel proportionally based on the number of retail terminals and development plans.
  • Work Content Quota: The number of retail terminals to visit daily must meet company standards; complete visits according to the frequency specified by the company; and complete the business work content stipulated by the company.
  • Visit Route Quantification: Based on knowledge of terminals, follow the designated work routes and visit according to procedures.
  • Visit Frequency Quantification: Determine visit frequency based on the level of each retail terminal, ensuring key customers receive key services, making personnel and time usage more effective.

The specific forms of fine management are: one map, one line, three tables, and six fixed elements.

  • One Map: A distribution map of sales outlets. Based on the collected data of sales outlets, including distributors, wholesalers, delivery agents, and retail points, clearly mark them on the map and number them.
  • One Line: Based on the distribution map, set the work area for business supervisors and work routes for sales representatives. On the work area and routes, mark the location of outlets, customer numbers, and visit frequency according to the distribution map.
  • Three Tables:
    • Customer Registration Form (Customer File): Records detailed customer information, business status, etc. This form is the foundation of all work.
    • Customer Service Form: Includes customer number, customer level, inventory status, store display, existing problems, etc. This form clearly defines the work content of sales representatives and contains all the information the company wishes to know.
    • Order Form: Based on the information gathered and the customer's business situation, promptly accept customer orders.
  • Six Fixed Elements: Sales personnel are relatively stable; each salesperson's sales area is relatively stable; each salesperson's responsible sales outlets are relatively stable; each outlet's visits have a relatively stable frequency; each salesperson's work route is relatively stable; and each point's visit time is relatively stable.

3. Implementation of Fine Management

The implementation of fine management is a dynamic process. It includes: collection and organization of basic data—initial implementation of fine management—revision of data, adjustment of areas and routes, correction of visit frequency—implementation of fine management.

This process is cyclical. As implementation proceeds and new data emerges, adjustments and corrections are inevitable, making area division and route allocation increasingly rational and optimized.

Phase 1: Initial Implementation

  • Collection of Basic Data: Collect data on all retail terminals, establish customer files, and draw a geographic map. Customer files include: store name, person in charge, address, phone number, nature (fixed or mobile), etc.
  • Organization of Basic Data: Based on customer files and the geographic map, draw an overall distribution map of business outlets and organize customer files by area and route, marking customer locations and numbers on the overall map.
  • Simple Customer Classification and Initial Development Targets: Based on the above data and company product situation, determine development targets. Use large shopping malls and hypermarkets for product display; classify shops near schools, kindergartens, and residential areas as A-level customers for initial development; shops at crossroads and bustling areas as B-level for key development; general shops as C-level not for key focus, selectively developed based on different areas.
  • Route Setting and Initial Visit Frequency: Based on the above classification, determine visit routes and frequencies. At this stage, concentrate human and material resources to ensure supply, POP, and promotional item distribution. Visit A and B customers at least twice a week, and C customers at least once a week, achieving a distribution rate of over 80%.
  • Route Adjustment and C-level Store Development: After about 2 months of operation, when sales and restocking of A and B stores are relatively stable, adjust manpower so that each person manages 200-300 stores with a weekly visit frequency, assigning personnel for management and sales follow-up, while others focus on developing C-level stores.
  • C-level Store Development: Each person visits 50 stores per day according to routes.

This phase takes about 3 months, then proceed to the second phase.

Phase 2: Data Analysis and Adjustment

The second phase mainly involves summarizing the first phase, revising data, and analyzing data. Based on this, reasonably revise customer levels and adjust visit frequencies. The core is data analysis based on sales volume.

  • Data Revision: Timely supplement new data and analyze customer situations.
  • Data Analysis: Based on sales data, accurately calculate product sales at each store, and analyze average sales per store and percentage of each store's sales to total sales. This yields essential business information for product sales.
  • Average Sales Analysis: Used for sales forecasting.
  • Inventory Analysis in the Channel: Combined with sales analysis, determine market demand plans, then production plans; analyze production batch numbers of inventory to resolve existing product issues and arrange promotions.
  • Turnover Rate Analysis: Determine the timing and quantity of restocking to reduce transportation, inventory, and other sales costs.
  • Percentage Analysis: Used to determine customer levels.
  • Customer Level Standards: Based on statistical sales data, analyze the percentage of each store's sales to total sales, and rank customers from largest to smallest. Customers whose cumulative sales account for 40% of total sales are A-level; those with cumulative sales of 25-39% are B-level; the rest are C-level.
  • Setting Visit Frequencies:
    • A-level customers: Policy is to firmly occupy and support with resources. Visit frequency: twice a week. Strictly ensure product shelf presence, supply, appearance, and display vividness. Provide policy support in POP, promotional items, and sales incentives.
    • B-level customers: Firmly occupy, seize shelf space, tap potential for promotion, and increase sales. Visit frequency: once a week, supplemented by in-store and storefront promotions by product promotion staff.
    • C-level customers: Main characteristics are slow turnover and low sales. The principle is to maintain supply, small quantities with frequent deliveries, and ensure shelf presence and display. Visit frequency: once every 8 days.
  • Route Adjustment: Mark A, B, and C stores on the map with different colors, observe the distribution, and re-adjust visit routes. Based on the work ability of sales representatives, allocate work areas and routes according to the principles of reasonable time use, ensuring visit frequency, and relative fairness of work opportunities.

Through such analysis, classification, and adjustment, form new customer level tables and work route maps, and start new operations. Of course, this adjustment cannot be done at once; it is necessary to constantly update data, and regularly check, analyze, organize, and adjust until business management and development are optimized.

4. Organization, Implementation, and Inspection

  • Organization: Arranged by the company and required to be implemented forcefully. Set a clear time schedule, with each office manager responsible, and promote comprehensively. This serves as a basis for work assessment and resource support.
  • Inspection: The company mainly checks according to the work schedule, including: document and chart inspection; organizational inspection; market coverage inspection; A and B store inspection; wholesaler and distributor inspection; and sales performance assessment.
  • Office Inspection: Office managers conduct regular or irregular spot checks on A and B stores, check the work of subordinate business supervisors, and inspect and analyze data.
  • Business Supervisor Inspection: Business supervisors must understand the market coverage of wholesalers and delivery agents in detail, seize opportunities to expand wholesale and delivery levels to improve delivery efficiency, and conduct daily checks on subordinate sales representatives.

5. Conditions for Implementing Fine Management

Fine management is a detailed and in-depth management based on the completion of channel construction. Without a well-established market channel, fine management cannot be discussed.

Fine management is a quantitative management. Accurate and timely basic data is a prerequisite for implementation and the beginning of fine management.

Fine management is a process management consisting of a series of steps. During this process, data updates and analysis are key to effective implementation.

Fine management is not only about business management but, more importantly, about people management. The wisdom, quality, work attitude, and style of frontline organizers will determine the effectiveness of implementation.

Fine management involves a large amount of data processing. All business information is reflected in operational data. Computers and professional software will be powerful tools for effective implementation.

In our market operations, we first piloted the fine management strategy in some regional markets and found that these areas achieved significantly better performance than others, with noticeable improvements in salesperson management, sales performance, and market confidence.

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