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The terminal is the place where products directly meet consumers; it is where goods and currency are exchanged; it is the final point of sale; it is where profits are realized. Operating the terminal well can guide consumption, enhance brand image, increase product flow, and secure better and more living space and resources for distributors. With intensifying market competition, the terminal is the core lifeline affecting a distributor's regional market sales. Increasing terminal sales is the top priority for boosting regional market sales and is the secret to increasing sales and profits for every distributor. This article will elaborate on the case of Manager Zhang (a comprehensive beverage distributor) who increased regional market sales by addressing the issue of "deep terminal distribution rate" in his regional market operations.
Case 1
Last year, Manager Zhang's market operations in a county-level city were as follows: The city has a population of 1 million, with 360,000 in the urban area, 15 townships, and over 1,100 administrative villages, covering an area of 2,300 square kilometers. It is an agricultural city with a relatively backward economy and relatively low consumption levels. Manager Zhang mainly operated 8 items (different specifications and flavors) in this market, with last year's sales of only 500,000 yuan. Below are the data analysis tables for the distribution rate and sales items of terminal stores in the urban and township markets last year:
1. Urban Terminal Distribution Rate and Sales Item Data Analysis Table (Unit: Store)
| Channel Name | Total Terminals | Developed Terminals | Undeveloped Terminals | Terminals Selling All 8 Items | Terminals Selling 5-6 Items | Terminals Selling 3-4 Items | Terminals Selling 1-2 Items |
|---|---|---|---|---|---|---|---|
| Large Supermarkets | 8 | 1 | 1 | 2 | 4 | ||
| AB-Class Hotels | 24 | 1 | 5 | 8 | 10 | ||
| CD-Class Hotels | 260 | 1 | 5 | 20 | 80 | 154 | |
| Famous Tobacco & Liquor Stores | 220 | 10 | 15 | 30 | 100 | 65 | |
| Convenience Stores | 400 | 10 | 50 | 80 | 150 | 110 | |
| Internet Cafes | 36 | 6 | 10 | 20 | |||
| Gas Stations | 6 | 1 | 2 | 3 | |||
| Others (Park Cold Drink Stalls, etc.) | 100 | 10 | 15 | 75 |
2. Township Terminal Network Distribution Rate and Sales Item Data Analysis Table (Unit: Store)
| Channel Name | Total Terminals | Developed Terminals | Undeveloped Terminals | Terminals Selling All 8 Items | Terminals Selling 5-6 Items | Terminals Selling 3-4 Items | Terminals Selling 1-2 Items |
|---|---|---|---|---|---|---|---|
| AB-Class Hotels | 5 | 1 | 2 | 2 | |||
| CD-Class Hotels | 500 | 10 | 30 | 280 | 180 | ||
| Famous Tobacco & Liquor Stores | 36 | 1 | 2 | 5 | 12 | 16 | |
| Convenience Stores | 3000 | 20 | 30 | 600 | 1200 | 1150 | |
| Internet Cafes | 50 | 5 | 15 | 30 | |||
| Gas Stations | 15 | 1 | 5 | 9 | |||
| Others (Roadside Cold Drink Stalls, etc.) | 260 | 20 | 50 | 190 |
Main Reasons Affecting This Market's Sales:
1. Low terminal distribution rate affects market sales. For example, parks and roadside cold drink stalls and internet cafes are core channels for selling 500ml bottled beverages, but Manager Zhang's product distribution rates in these two channels in urban and township markets were 44.4%, 25%, and 26.9%, 50%, respectively.
2. Developed terminal stores sell few items per store, affecting market sales. For example, Manager Zhang had 8 items for sale in this market, but only 42 stores sold all items, accounting for 1.44%, while 1,931 stores sold 1-2 items, accounting for 66.56%.
Strategies to Increase Sales in This Regional Market:
Because only products seen by consumers will be sold, to increase sales in this city, it is first necessary to increase the terminal "deep distribution rate" to expand network coverage and the number of items sold per store, so that products radiate to every corner, expand consumer attention, and enlarge the consumer base. The so-called "deep distribution rate" refers to enhancing control over terminals, increasing product distribution rate and the number of items per store, and increasing consumer purchase opportunities at terminals. The basic principle of deep distribution rate is: Sales Volume = Number of Outlets × Number of Items Sold per Store. Therefore, the number of outlets and the number of items sold per store become the core and key points of deep distribution rate. The more outlets and items per store, the closer and more numerous the products are to consumers, the greater the purchase opportunities, and the higher the sales; conversely, the lower the sales. Based on the actual situation of this market, Manager Zhang adopted the following strategies to increase the deep terminal distribution rate in this city:
- Zero-store shelf stocking rewards;
- Small-quantity mixed-case distribution;
- Limited-quantity rewards for zero stores;
- Terminal display rewards;
- Carton exchange;
- Gift in every case;
- Scratch cards with cases;
- Employee distribution competition;
- Leveraging the power of sub-distributors to adopt the above terminal strategies to quickly increase deep distribution rate. For example:
◆ Analyze sub-distributors' interests and adopt appropriate terminal promotional methods and means, such as rewarding a certain amount for each store completed within a specified time, setting tiered rewards, and extra rewards for exceeding targets.
◆ Win over competitors' sub-distributors: Analyze competitors' channel policies and after-sales service, and adopt superior promotional policies and services to win over competitors' distributors. This is one of the main ways for enterprises to attack competitors and seize terminals. However, during implementation, industry stability must be maintained to avoid unfair competition. For example, strengthen communication with competitors' distribution customers, accurately understand their credibility, strength, performance, and relationship with competitors. Make every effort to win over customers with good credibility, certain strength, their own network systems, especially those with conflicts with competitors. Treat them politely, move them with sincerity, persuade them with facts, entice them with benefits, and skillfully use divisive tactics to make them lose confidence in competitors and defect to you, helping to increase terminal distribution rate.
◆ Improve the distribution capabilities of existing sub-distributors, and on the other hand, strengthen personnel and vehicle support to channels, assist sub-distributors in developing terminals, such as establishing development teams to help increase deep distribution rate in a short time.
By adopting the above multiple strategies for a 40-day intensive deep distribution to terminal stores, the distribution rate in all channels in this market reached about 80%, and stores selling more than 5 items accounted for about 60% of developed terminals, with sales increasing by 120% compared to the same period last year.
Case 2
Manager Li, a distributor in a district of a prefecture-level city, often says that the terminal network distribution rate in our district is also high, and salespeople run every day, but sales still don't increase, causing Manager Li deep distress. Below is the single-store sales data table for terminal outlets in Manager Li's district:
(Unit: Store)
| Channel Name | Total Terminals | Developed Terminals | Undeveloped Terminals | Terminals with Monthly Sales Above 50 Cases | Terminals with Monthly Sales 30-49 Cases | Terminals with Monthly Sales 10-29 Cases | Terminals with Monthly Sales 5-10 Cases | Terminals with Monthly Sales Below 5 Cases |
|---|---|---|---|---|---|---|---|---|
| Large Supermarkets | 4 | 1 | 1 | 2 | ||||
| AB-Class Hotels | 20 | 5 | 10 | 5 | ||||
| CD-Class Hotels | 300 | 10 | 20 | 180 | 90 | |||
| Famous Tobacco & Liquor Stores | 180 | 10 | 15 | 45 | 80 | 30 | ||
| Convenience Stores | 500 | 20 | 40 | 50 | 300 | 90 | ||
| Internet Cafes | 28 | 1 | 3 | 5 | 8 | 10 | 1 | |
| Gas Stations | 5 | 1 | 1 | 2 | 1 | |||
| Others (Park Cold Drink Stalls, etc.) | 100 | 2 | 5 | 20 | 50 | 23 |
Reasons Affecting Manager Li's Regional Market Sales
1. Terminal network has width but lacks depth. For example, the distribution rate in the region is good, but there are many outlets, yet the core outlets that truly create sales are relatively few.
2. Salespeople seem busy, but in reality, they are busy running to those outlets without seriously solving problems. Most of them just check if each store has stock and whether they need more. Their work is superficial and not in-depth; they do not fully take responsibility to achieve true channel smoothness.
Strategies to Increase Manager Li's Regional Market Sales
Solve the problem of terminals "only stocking, not selling," that is, strengthen deep maintenance, enhance customer relations and vivid publicity, etc., to achieve outlet sell-through. Work with terminals to study how to quickly sell products, and think of ways to sell terminal products to consumers. When terminals have no stock, they naturally restock, thus truly solving the problem of "only stocking, not selling."
For example, based on the dynamic strategic combination of "points" and "areas" in the regional market, adopt the strategy of "one point drives a line, one line drives an area." Select 50 terminal stores with monthly sales below 5 cases and formulate a plan to increase their monthly sales to 20 cases, i.e., the "Plan to Conquer 50 Terminals." If these 50 stores can each sell 20 cases per month, that's 1,000 cases. Then replicate the process with another 50 stores, reaching 100 stores, and these 100 stores alone would sell 2,000 cases per month. Continue this way to achieve outlet sell-through.
How to Implement the "Plan to Conquer 50 Terminals"?
1. Select terminal outlets carefully. The selection criteria are: first, high foot traffic, suitable for selling your products, and your products have already entered; second, terminals where competitors sell well and you have also entered. Such terminals prove that your products can sell there, and selling well there will also strike a blow to competitors.
2. Concentrate forces to attack. In operation, require human and material resources to focus on these terminal outlets: 1. In terms of manpower, arrange the most capable salespeople to be solely responsible for these outlets. 2. These outlets should always maintain a maximized display surface, the best publicity layout, and the highest quality customer service. This reduces competitors' display space; the less conspicuous competitors' displays are, the greater your opportunity. Maximized publicity and display directly advertise to consumers. 3. Help these terminal outlets sell products, which not only helps outlets digest inventory, brings restocking, and strengthens customer relations, but also because product sell-through gives terminal owners confidence, prompting them to actively promote your products until a virtuous cycle is achieved.
Shi Shunkuan: Fifteen years of practical marketing and marketing consulting experience. From a novice in the FMCG industry to sales supervisor, sales manager, marketing manager, marketing director, and then to the consulting industry. Companies he has served include: Tianjin Tingyi International Food Co., Ltd., Heilongjiang Laocunzhang Liquor Co., Ltd., Heilongjiang Suntory Liquor Co., Ltd., Hebei Gushun Brewing Co., Ltd., and he has been a marketing consultant for many enterprises and trading companies. He specializes in the FMCG industry's "strategy formulation, tactical implementation, brand promotion, channel management, sales team management, building sales team execution, distributor development and management, and building model markets and base markets."
Source: Huatang Business School --------------------------------------------