The arrival of summer always brings opportunities for some products. The scorching weather delights manufacturers of water, beverages, and beer. While these products sell well, manufacturers of instant noodles and biscuits are seeking ways to survive the sales off-season. Here, I offer some thoughts on how instant noodles can better maintain the market and sustain or increase sales during summer:
Strengthen sales representatives' mindset: When summer arrives, manufacturers often tell their sales reps, "Summer is our off-season; we hope you can do your best to stabilize sales and prevent a significant decline."
Shift channel focus: Hot weather slows down traditional channel turnover, but other channels, such as internet cafes, nightclubs, and swimming pools, see no decline or even growth. Manufacturers should allocate key market resources to these channels while still maintaining traditional ones.
Adjust product packaging: Most instant noodles are sold in bags, partly due to the high market share and fast turnover of XXX braised beef bowl noodles. Many manufacturers focus on bagged noodles because of strong competition in bowls. However, in summer, manufacturers should consider making bowl noodles the main product, leveraging their convenience to attack special channels.
Change distributor business models: Most distributors are passive, relying on manufacturers' sales reps for orders. To boost their enthusiasm, manufacturers can offer incentives for self-distribution and set targets for distributors, encouraging them to actively participate and weather the summer together.
Summer always troubles instant noodle sales. In June and July, sales personnel rack their brains for ways to survive the off-season. "Targets remain high, but effective outlets shrink drastically; how can we achieve sales?" "My boss says we must not see a big drop in summer, but my distributor's inventory is already high; what should I do?" These are recurring annual challenges for instant noodle salespeople.
The usual approach is to increase distributor inventory and find more outlets. This works if your distributor has good cooperation, ample warehouse space, extensive distribution networks, strong delivery capabilities, and you have enough sales staff. If not, consider leveraging secondary wholesalers. If you can achieve the following four points, you can not only easily survive the off-season but also lay a solid foundation for the next peak season.
- Understand secondary wholesalers: Secondary wholesalers sit between distributors and retail outlets, possessing capital, warehouse space, and strong distribution capabilities. They lack brand loyalty and prioritize profit; they push products with higher margins or better sales.
For manufacturers, secondary wholesalers are a double-edged sword: their distribution power is invaluable, but if margins are insufficient, they may switch to competitors or engage in price-cutting and parallel imports if their finances or storage face issues. Sales reps often find them hard to manage due to their wide distribution and varying quality, yet cannot ignore their distribution strength.
- Select secondary wholesalers: Everything has pros and cons; use people's strengths. For secondary wholesalers, we need their distribution capabilities while mitigating risks. Select the most suitable ones based on:
- High sales volume and delivery vehicles: This indicates broader coverage and stronger distribution.
- Minimal overlap in terminal channels: If multiple wholesalers cover the same area, choose only one to avoid price wars.
- Township wholesalers should have delivery vehicles, and only one per township to ensure service breadth and frequency, and to reserve market space and profit margins for their enthusiasm.
- Consider relationships among wholesalers: In the same market for years, conflicts may arise. Sales reps must be astute and flexible. I once encountered two wholesalers with strong distribution but refusing to carry the same brand. I suggested one handle products "123" and the other "456," avoiding overlap and fostering competition in sales and coverage, which boosted overall sales, as merchants ultimately prioritize profit.
- Promote to secondary wholesalers: Secondary wholesalers are profit-driven, but their profit requirements have unique characteristics, like a bucket with a fixed capacity: if water is insufficient, the bucket isn't full; if too much, it overflows. If margins are too low, they leave; if too high, they may cut prices themselves. Promotions for secondary wholesalers are a double-edged sword.
Given their specific profit expectations, we must gauge their "fixed capacity." In the instant noodle industry, profit margins for fast-moving products are typically 5%-6% (varies by region). Off-season promotions should meet or slightly exceed this to ensure enthusiasm but not leave room for price-cutting.
- Give a portion, keep a portion:
- Applicable to: Most instant noodle products on the market.
- Promotion intensity: 1.5%-2%.
- Duration: 1 month (typical promotion period).
- Method: Sign a promotion agreement (in duplicate) with the wholesaler, set monthly sales targets, offer an immediate 4% off-invoice discount, and have each batch signed off. If the monthly target is met without market complaints, provide a 2.5%-3% rebate at month-end (cancel all rebates for price-cutting or parallel imports).
- Bundle a longer sales period:
- Applicable to: Select products.
- Promotion intensity: 2% or higher (must be substantial to ensure participation).
- Duration: Two months or longer.
- Method: Sign a promotion agreement (in duplicate), set activity period, sales tiers with rewards, offer an immediate 1% off-invoice discount, and have each batch signed off. At the end, if no market complaints, provide rebates based on achieved tiers (ensure tiers are well-spaced; minimum tier rebate at least 5% to encourage participation; maximum tier uses full promotion to focus on sales without violations).
- Manage secondary wholesalers: After setting promotion plans, strengthen execution and manage wholesalers. Since participating wholesalers often stock up heavily, and their operational and warehouse management may be weak, sales reps must provide guidance:
- FIFO management: Ensure first-in, first-out. Remember: "Wholesaler batch lags one month; terminal channel lags two to three months." Check batch numbers at least twice a month to ensure the newest batches are at the back and oldest at the front.
- Inventory management: Track wholesalers' purchases, sales, and stock to replenish timely and understand sales trends. Record data at least twice a week for each wholesaler.
However, no strategy or management method works without good incentives and corporate culture. In principle, corporate spirit should not be just the boss's spirit; the key is to strengthen leaders' responsibility and dedication.
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