---
title: "How Wahaha Manages Terminal Sales"
description: "A healthy market growth depends not only on team building and network channel development but also on terminal development and management. Wahaha has developed its unique terminal management methods, including price difference management, anti-smuggling measures, and innovative display strategies, to effectively compete in the fiercely contested final mile."
author: "罗宏文"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-08-20"
language: "en"
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---

# How Wahaha Manages Terminal Sales

> A healthy market growth depends not only on team building and network channel development but also on terminal development and management. Wahaha has developed its unique terminal management methods, including price difference management, anti-smuggling measures, and innovative display strategies, to effectively compete in the fiercely contested final mile.

A healthy market growth depends not only on team building and network channel development but also on terminal development and management. The 12-character mantra for mastering Chinese-style terminal sales management—**"Vertical penetration, intensive cultivation, and winning at the terminal"**—still echoes in our minds. Especially in recent years of oversupply, the ever-changing sales terminals have become a battleground for enterprises, with various promotional activities flooding the market. The "last meter" battlefield is exceptionally lively, even with direct confrontation. Terminal development is crucial; it is the end where products complete sales and the port where products reach consumers, such as supermarkets, convenience stores, internet cafes, restaurants, liquor stores, and JD.com. Consumers buy their favorite products through this port. The terminal is a highly competitive and decisive link where various brands clash. How to grasp the terminal rhythm, attract consumers' attention, and influence their purchasing psychology is key to terminal work, just like a tree: only with developed roots can it flourish.

To be honest, Wahaha's previous practices in this area were not very good, but after multiple explorations following market changes, Wahaha has formed its own unique management methods, which differ from other manufacturers but are very effective.

**Terminal Price Difference Management**

Wahaha's management of terminal price differences is based on mutual benefit, trust, and win-win cooperation, implementing a guiding price. To ensure price system stability, Wahaha implements a hierarchical price difference management system, clearly defining the ex-factory price and retail price for each product at the first-level wholesaler, special second-level distributor, second-level distributor, third-level distributor, and supermarket. All levels must strictly implement price differences: the profit per unit for first-level wholesalers should be less than that for second-level distributors, and the profit per unit for second-level distributors should be less than that for third-level distributors. For example, in 2009, when Luoyang innovatively developed a second network, for wholesalers who could order full truckloads, Wahaha stipulated that first-level wholesalers add 0.5 yuan per unit and deliver directly to the wholesaler's warehouse. The wholesaler then adds 2 yuan per unit and delivers to terminal retail stores, which uniformly sell to consumers at the retail guide price of 2.5 yuan per bottle. First-level wholesalers profit from volume and company sales incentives, while the wholesalers closest to the end are key to terminal management but have smaller volumes, so their price differences are relatively higher. This way, those with large volumes profit from volume, and those with small volumes profit from higher price differences. At the same time, retail prices in all stores must be unified, ensuring the enthusiasm of terminal retail stores and the stability of terminal sales prices.

**How to Curb Cross-Regional Sales**

To protect dealers' interests and maintain regional price system stability, Wahaha requires all links to strictly implement company regulations. The most effective method is to crack down on cross-regional sales. To quickly investigate and deal with cross-regional sales, Wahaha has implemented the following rigorous measures:

1. **Establish an Anti-Smuggling Inspection Department**: The group company has an inspection department dedicated to checking cross-regional sales and other behaviors detrimental to market sales. Provincial-level internal inspectors are also in place to quickly verify and handle cross-regional sales. For example, the Yubei Market Inspection Team was established early and once became a model for Wahaha.

2. **Product Identity Information Management**: Every product produced by Wahaha is marked with production date, time period, shift, and serial number at the time of production. According to planned orders, when products are shipped to various regions and customers, each product package is marked with the corresponding customer's serial number. At the factory, staff input product identity information into the Wahaha sales management system, just like an ID card—enter the system and you know who you are. Additionally, when first-level wholesalers deliver to second-level distributors or wholesalers in their area, they must print hidden codes and marks on relevant product locations as required by the company, both to protect themselves and to prevent second-level distributors from cross-regional sales.

3. **Accept Reports and Quickly Verify**: Whether business personnel, first-level wholesalers, or second-level distributors, if they find suspicious goods in their area, they only need to fill out a report form with the product package serial number or production date and report it to the head office inspection or provincial inspection supervisor. The inspector will lock onto the source based on the product system information and quickly go to the suspicious source to verify, while notifying the relevant business supervisor to confirm. The basic process is: discovery → report → verification and report → handling.

**Display Management Techniques**

The battle for the terminal is the inevitable gateway for products to reach consumers, and display activity management is a must-use tactic for all. However, terminal vivid display management is not just for looks, nor just for selling, nor for display's sake. There is a saying: "80% of advertising costs are wasted, but you don't know where." All merchants believe that "terminal momentum comes from effective attraction or interception of customer flow," so many conventional practices—such as displays, end caps, special offers, buy-one-get-one-free, sweepstakes, points, free tasting, sample distribution, bundle sales, POP ads, DM ads, stack covers, product manuals, salesperson recommendations, limited-time flash sales, clown performances, joint promotions—have reached the point of exhaustion. The problem of "terminal promotions being hard to promote" is increasingly prominent. Behind the bustle and busyness, there is always the suspicion of "excess" and "waste." Many promotional scenes are lively, but actual results are often not optimistic, often with high input and low output, or even only input without output. So, how can terminal promotions be done differently? How to break through the terminal trap?

1. **Innovation in Time Effects**

Since 2005, Wahaha's Yubei market has been specifically researching terminal display activities through trial and error. First, displays must be standardized, with before-and-after comparisons for each improvement. Second, focus on input-output ratio, such as spending the same amount of money but using different implementation methods, then comparing data changes to maximize input-output benefits. Take the example of display duration: the Yubei market research defined it as the "staggered time effect." You may not have heard of it. See how it differs from your approach and how much benefit Wahaha gains. Look at the following example:

Whose plan would you choose?

The best plan is Xiao Wang's. He captured several key points of display activity duration: 1. Mid-Autumn Festival and National Day. 2. Maintain a minimum of 30 boxes daily, replenishing immediately if insufficient, because the activity requires 50 boxes for centralized display. 3. The start and end times include National Day, and the final check time is 2 days before the end. What would it mean if 30 boxes of products were still centrally displayed at the storefront 2 days before the activity ended? 4. He captured the psychology of businesspeople. Who wouldn't want to sell more and earn more during festivals? Even without display fees, store owners would put goods on the street, and at least 10 to 15 days, the owner is displaying for Xiao Wang for free.

Xiao Zhang's plan did not utilize the habit of businesspeople during festivals. During festivals, even without display fees, terminal owners will proactively display goods. Also, Xiao Zhang's supervision interval, especially the final one, was half a month apart—too long. Xiao Ma's plan had the issue of starting a bit early, and the main problem was that the supervision and follow-up intervals were too long at the beginning, and the final follow-up ended too early.

Unreasonable use of time in display activities causes sales losses and resource waste. After data comparison, the research group found that Xiao Wang's plan could increase Wahaha's benefits by 16%.

Through 5 years of data tracking research by the Yubei Inspection Team and Training Team, it was found that a non-standard and unreasonable use of time in display activities causes huge losses. When formulating display activity policies, you must consider terminal store sales profitability and competitor activity policies; otherwise, your activity is a waste of resources. For example, as shown in the right figure, if you do not consider competitors' sales and profits in stores when formulating display activity policies, and blindly make policies behind closed doors, you will lose at least 50% to competitors before the activity even starts.

According to our statistics, due to non-standard displays, each activity results in a 15.58% loss of sales opportunities and 11.84% waste of resources. If your company invests 10 million yuan annually in product display activities, ignoring other factors, based on research results, discounting your company's sales loss by half is equivalent to losing a county with an annual task of 7 million yuan.

2. **Revolutionizing Display Traditions**

Why don't consumers buy? The answer is product homogeneity. Why don't display activities yield results? The answer is exhaustion and rigid models. To break through tradition, you must pay the price, continuously innovate, continuously trial and error, revolutionize traditional methods, and find a method that maximizes benefits. After years of research, the Yubei Market Training Team has summarized a set of display methods that maximize benefits.

Due to the diversity and complexity of terminal structures, any terminal management activity must first conduct market research and current situation analysis, then make corresponding adjustments based on actual structures, and implement flexibly, not one-size-fits-all. For example, for beverage display types, conventional choices include loose bottles, end caps, shelves, stack boxes, stack boxes plus loose bottles, and buyouts. Which terminals are suitable for loose bottle displays, which for end cap displays, which for stack box displays, and which for buyout displays? How to do displays to maximize input-output benefits? Yubei chooses as follows: if terminal points are concentrated in kiosks, ice cream stalls, etc., loose bottle displays are best; if terminal points are concentrated in small supermarkets, community convenience stores, etc., end cap displays are suitable; if terminal points are concentrated in wholesale stores, grocery wholesale-retail stores, etc., stack box displays are suitable; for stores with particularly high foot traffic, such as bus station entrances and park entrances, loose bottles and end caps are suitable; for special channels like cinemas, KTVs, internet cafes, high-end business leisure clubs, and gyms, buyout displays are suitable.

Once, the Wahaha Yubei Training Team was training grassroots salespeople in Jiaozuo market. When the teacher mentioned that end cap display activities in a certain area were effective, a salesperson stood up and said he had also done end cap display activities last month but with poor results. When the teacher mentioned that sales work must follow company regulations, another salesperson stood up and said his supervisor said loose bottle display activities in a certain area were very effective and arranged for them to do loose bottle displays last month. He followed the requirements but the results were poor, and the supervisor scolded him. He looked quite wronged.

After the training, we decided to visit the market to see what was going on. After visiting these two areas, we found that the first salesperson's problem was that his area's terminal structure was mostly wholesale departments, which are not suitable for end cap displays. The second salesperson also had terminal structure issues in his area. Additionally, we found that this salesperson strictly followed the company's requirements for loose bottle displays (Wahaha's activity product loose bottle display specification is 8 facings), while the competitor's loose bottle display was 10 facings, so they lost to the competitor in momentum. Through these two real cases, on one hand, it reflects that when doing activities, salespeople do not analyze their terminal structure or consider whether the policy is suitable. On the other hand, salespeople lack flexibility. For example, our loose bottle display regulation is 8 facings, but when competitors reach 10 facings, should we analyze the specific situation?

3. **Mobile Ice Stall Management**

Every summer, a large number of mobile ice stalls operate, some in parks, some in squares, some on streets, some near stations, some only at night. They are highly mobile, making display management difficult. What would you do for such special terminals? Wahaha adopts a surprise visit policy, which we call "pie in the sky." Take Wahaha black tea's reward display as an example: the execution time is 1 day, with random visits and on-the-spot rewards. For every bottle of Wahaha black tea frozen in the freezer, an equal number of green tea bottles are rewarded.

After preparations, Wahaha sends salespeople in several groups following customer vehicles, pulling green tea to visit mobile ice stalls unannounced. As long as they open the freezer and see how many bottles of frozen Wahaha black tea are inside, the salesperson immediately rewards the same number of Wahaha green tea bottles. Many mobile ice stall owners suddenly receive such free gifts from Wahaha, feeling like pie in the sky, grinning from ear to ear. Owners with fewer bottles or those who didn't receive gifts will proactively stuff Wahaha products into their freezers after hearing about the activity, because they don't know what Wahaha's next policy will be or when they will visit again. But Wahaha people know exactly what they are doing. Depending on the competitive atmosphere and their own market needs, the activity policy will not be stingy; it may last three to five days or seven to eight days, usually with two to three consecutive surprise visits covering the entire summer season when ice stalls are out.

Facing the complex problem of terminal homogeneity, enterprises can learn from these cases, combine them with their own actual situations, innovate management according to local conditions, and discard old ideas. They will surely break through the terminal blind spots successfully!

-END-

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