“There are no successful enterprises, only those that keep pace with the times.” So-called successful enterprises are mostly those that have kept pace with the times; however, we live in an era of rapid change, full of uncertainty. Not long ago, we were excited about RIO's pioneering of the pre-mixed cocktail category, cheering it on; this year, however, we have repeatedly received news of RIO's worsening losses, and the suspension of production for Heiniu Food's TAKI and Bacardi's Ice Breaker cocktail drinks. Not long ago, we marveled at the Evergrande Group's foray into FMCG markets such as spring water, dairy, and grain and oil, impressed by the real estate tycoon's boldness and lavish spending; now, we regret the frequent reports of layoffs, price cuts, unpaid expenses, and asset transfers in Evergrande's FMCG division. Not long ago, we were studying how Guangzhou Bluemoon achieved rapid development through a massive "ground-promotion auntie" sales model; now, we hear of Bluemoon's high promotion costs, frequent clashes with KA hypermarkets, and the dilemma of being forced off shelves. "The only constant is embracing change continuously." Constantly responding to innovation that keeps pace with the times is extremely difficult. For entrepreneurs in the FMCG sector in this era, before we have time to savor the joy of victory, we are pushed by the rolling wheel of history into forced battle. At the same time, once we fall into the quagmire of decline, losses, or bankruptcy, the flowers, honors, and praise that once accompanied us will vanish, replaced by doubt and fear! Review the Past, Broaden the Perspective Only by foreseeing can we encounter; only by knowing in advance can we advance. To foresee the future and be prescient, we must first transcend history and broaden our perspective. Looking back, the marketing history of China's FMCG industry has seen three stages of development. The first stage was the production-oriented era. In the late 1980s and early 1990s, at the beginning of reform and opening up, all industries in China were waiting to be revitalized, and people's material life was in short supply. At that time, "bold" private entrepreneurs only needed to produce goods and run TV advertisements to achieve phenomenal sales; in that era, a plain chicken could turn into a phoenix. For example, in the late 1980s, Wahaha Children's Nutritional Oral Liquid's slogan "Drink Wahaha, eat with a good appetite" triggered a sales storm. In 1989, Wahaha had 80 million RMB in bank deposits, which laid the foundation for the classic case of "small fish eating big fish" in acquiring Hangzhou Canned Food Factory. The second stage was the brand-oriented era. In the mid-to-late 1990s, various enterprises in each category of China's FMCG industry made products quickly abundant, and people's basic needs were met. But people always wanted better, so international and domestic large enterprises gained growth momentum through brand communication via TV advertising, developing rapidly. This led to the rapid development of international brands like P&G, Unilever, and Coca-Cola in China during the 1990s. The third stage was the channel-oriented era. Since the collapse of the state-owned supply and marketing system in the early 1990s, due to China's vast territory and uneven development across regions, FMCG enterprises built their own distributor networks to push marketing actions down. The depth-distribution dividend, mainly based on a human-wave tactic, reached its peak from the 1990s to around 2013, and most domestic FMCG enterprises developed through this model. Of course, enterprises currently relying on depth distribution are still using "old historical methods," but they are becoming increasingly ineffective, and enterprises increasingly feel a "sense of marketing powerlessness." Embrace Change, Lean Marketing Returning to the present, China's FMCG industry is about to enter the fourth stage: the C2B lean marketing era. Brand aging leading to insufficient brand momentum, consumption upgrading leading to the replacement of old categories, and rising costs of depth-distribution channels leading to insufficient dividends are the problems most old-generation Chinese enterprises face. For enterprises, in addition to responding to supply-side reform and accepting Internet-era brand communication methods, this era requires that channel marketing actions become not only faster but also more precise; enterprises must not only use channels to make money but also find ways to integrate existing resources and personnel to maximize efficiency and effectively save money. However, to achieve leaner marketing management, enterprises need to seriously examine the information asymmetry, untimeliness, and inaccuracy in the past depth-distribution process. So, what should enterprises do? Only by opening up an information platform from manufacturers to distributors, and from distributors to terminals and consumers, implementing "Internet+", and basing decisions on dynamic data analysis of consumer and terminal retail behavior, can they take the first step toward precision marketing and lean management. Upgrade Systems, Build New Life For brand owners, in this rapidly changing Internet era, if they completely abandon the traditional depth-distribution model and blindly cater to e-commerce sales platforms or large KA systems, they may still fall into the game logic of "big merchants bullying manufacturers." The reason I call it the "post-depth-distribution era" is that for FMCG, the depth-distribution model is not necessarily outdated; it's just that the human-wave-tactic-based depth distribution is no longer economical. The "post-depth-distribution era" requires upgrading the original extensive channel ecosystem to proactively embrace the arrival of the new era! The following three upgrade suggestions are for your reference. 1. Build a "1+N" mobile ORP management system for the post-depth-distribution era: "1" refers to the manufacturer, "N" refers to distributors. The "1+N" mobile ORP management system means importing the manufacturer's direct business team and distributor business personnel into an information platform system, linking the order flow and information flow from manufacturer to distributor to terminal, achieving standard implementation of marketing and process management of business; by collecting real-time and authentic terminal marketing data, it avoids the asymmetry, untimeliness, and inaccuracy in the past depth-distribution process, achieving lean sales actions in the "post-depth-distribution era," reducing staff and costs while still ensuring volume and efficiency. 2. Build a "C2b2B2F" member CRM marketing system: "C2b2B2F" refers to a full-process feedback system from consumers to retail terminal stores, and then to distributors and factories. To achieve "flexible production," gain insight into consumer changes, and quickly meet consumer needs, manufacturers must first establish their own dynamic consumer membership information data system, capture consumer data through "Internet + Internet of Things," analyze the order logic of their products, output specialized consumer research reports, and provide promotional support closer to consumer needs for lean marketing. 3. Build supply chain finance to support channel partners, managing capital flow and customer flow: With the "1+N" mobile ORP management system and the "C2b2B2F" member CRM marketing system, manufacturers can capture comprehensive and authentic channel marketing data, and based on the actual operating conditions of partners such as distributors, through third-party banks and other financial institutions, provide more convenient, efficient, and on-demand supply chain financial support; even, if we can achieve true collection of consumer behavior data, in the near future, we can also provide consumer loans or credit consumption limits through third-party banks and other financial institutions. Source: Sales A (ID: realsales)
Consumer & Categories · Distribution & Channels
In the Post-Depth-Distribution Era, FMCG Enterprises Think and Change
There are no successful enterprises, only those that keep pace with the times. In an era of rapid change and uncertainty, FMCG companies must embrace change and adopt lean marketing. This article reviews the three historical stages of China's FMCG marketing and proposes three system upgrades for the post-depth-distribution era.
