---
title: "In Today's Era, Is Deep Distribution Still a Viable Path? How Should Companies Cultivate Their Markets?"
description: "Deep distribution is merely a tactical system. In China, modern channels represented by supermarkets and the internet, with a strong Western style, move unimpeded in urban markets, while traditional channels represented by mom-and-pop stores remain deeply entrenched in the vast county and village markets. Modern channels have leveraged consumers as leverage to gain direct dialogue with manufacturers, gradually displacing intermediate channels (distributors). This Westernized channel characteristic has led many companies to become accustomed to this long-pass direct operation style, and the direct management and rapid response of direct channels have created illusions among many corporate marketing layers..."
author: "方刚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-04-25"
language: "en"
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markdown: "https://xinjignxiao.com/en/articles/in-today-s-era-is-deep-distribution-still-a-viable-path-how-should-compa-f5bc82e8.md"
original_source: "https://mp.weixin.qq.com/s/lMPHpDFJ5R2wfHas6SMMYQ"
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# In Today's Era, Is Deep Distribution Still a Viable Path? How Should Companies Cultivate Their Markets?

> Deep distribution is merely a tactical system. In China, modern channels represented by supermarkets and the internet, with a strong Western style, move unimpeded in urban markets, while traditional channels represented by mom-and-pop stores remain deeply entrenched in the vast county and village markets. Modern channels have leveraged consumers as leverage to gain direct dialogue with manufacturers, gradually displacing intermediate channels (distributors). This Westernized channel characteristic has led many companies to become accustomed to this long-pass direct operation style, and the direct management and rapid response of direct channels have created illusions among many corporate marketing layers...

****Deep distribution is merely a tactical system.****
In China, modern channels represented by supermarkets and the internet, with a strong Western style, move unimpeded in urban markets; traditional channels represented by mom-and-pop stores remain deeply entrenched in the vast county and village markets. Modern channels have leveraged consumers as leverage to gain direct dialogue with manufacturers, gradually displacing intermediate channels (distributors). This Westernized channel characteristic has led many companies to become accustomed to this long-pass direct operation style, and the direct management and rapid response of direct channels have created illusions among many corporate marketing layers: to carry out manufacturer direct management and direct operation to the end!
Thus, the American-style approach represented by Coca-Cola emphasizes systematic operations, with independent order and delivery operations, emphasizing direct operation over distribution, hating secondary wholesalers, and excelling in three-dimensional warfare. This American style once dominated urban markets led by modern channels, but in county and village markets represented by mom-and-pop stores, it lost its advantage in the complex battles of villages and towns.
Deep distribution became popular as a result: manufacturers send personnel to directly control terminals. This has been the unbeatable method in the marketing systems of FMCG companies for years. Regardless of where the personnel come from, let alone how they are lost, one can see a pattern from the market layout: sales volume is directly proportional to the number of personnel!
Looking at the entire marketing history of the FMCG industry, it is essentially the history of deep distribution. Many major FMCG companies have risen rapidly with deep distribution as their marketing operation system. For companies, deep distribution is merely a tactical system that supports the operational standards of channel members and grassroots combatants. It is no different from a military training outline! The deep distribution system, characterized by offensive power, emphasizes micro-level operational capability.
As a tactical system, deep distribution can solve the problem of how to fight, but if the company's strategic system is not aligned, it inevitably leads to a general's incompetence exhausting the troops! For example, using deep distribution tactical attacks to suppress competitors, using capital strategic means to acquire or exhaust them, and then forming industry discourse power.
Conversely, if one merely uses tactical means to entangle with competitors in local markets, they often fall into the quagmire of annual suppression without success.
**A One-Size-Fits-All Approach Is a Dead End**
Go to companies and look at their sales reports; you will find that sales supported by deep distribution systems often account for 80% to 90%, or even 100%, of total sales. Go to the market and see that regardless of the type of market, branch management models and assessment systems are all the same.
Apart from the deep distribution system, companies have lost all other capabilities. To enter a blank market, they must recruit troops, set up formations, and prepare systems before they can operate.
Little do they know that without early market cultivation and groundwork, not even a local armed force (customer) can be found, and the regular army entering this area often finds itself in a situation of total darkness, no internal supplies, and no external reinforcements.
In this regard, the deep distribution system often serves as a icing on the cake, built on the foundation of previous extensive layout and land grabbing.
Before introducing the deep distribution system, many companies' marketing systems were primarily based on extensive customer agency, continuously recruiting distributors, expanding territories, and forming thin horizontal sales. This horizontal sales brought the first pot of gold to manufacturers, but it often carried high risks, failed to form focused sales, and contributed little to brand accumulation!
Against this backdrop, companies would campaign-style introduce deep distribution systems, focusing on intensive cultivation to build cumulative vertical sales! This introduction often operates in a campaign style, with overwhelming depth and one-size-fits-all execution. The result is often: initial performance blowout, later performance fatigue.
**Why?**
1. Neglecting the cultivation of marginal markets, drawing boundaries, able to focus but not expand!
2. Judging heroes by sales volume, ranking performance by sales, but forgetting that markets with large sales are built on the foundation of previous extensive operations!
3. Equating sales in marginal weak markets with grain, not understanding that marginal sales are seeds!
**There are also many problems in the company's marketing system:**
1. In markets with high share, grassroots lose attack targets, visit efficiency is low, management is loose, and offices are in a state of neglect.
2. In markets with low share, grassroots face pressure to move products, chewing bones every day, and sales representatives lack confidence before going out.
3. In markets where the company's brand share has a leading trend, manufacturer-dealer cooperation is poor, two skins.
**Transformation Direction: Extensive Is Not Guilty, Intensive Cultivation Has Limits!**
In the marketing world, mentioning extensive methods often invites a chorus of criticism. Evaluating a company's marketing system, one often says that a company's marketing is not good because it is not detailed, it is rough!
For companies, it is essential to know where to be rough and where to be detailed; when to be rough and when to be detailed!
No matter how powerful an FMCG company is, it cannot achieve uniform market thickness in its layout! Most companies' market characteristics are mushroom-shaped layouts with uneven strength—with a strong core market as the base, radiating to relatively weak surrounding markets.
**This is like the structure of an egg:**
The yolk is the core base advantage market, characterized by high share, high coverage, and high profit margins;
The egg white part is the hinterland market, where competitive advantages have emerged but are not obvious, with sufficient room for improvement in share and coverage, requiring rapid breakthrough, and the acceleration in this area leads to lower profit margins;
In the outer peripheral edges, there are many blank or semi-blank markets with small sales, like the eggshell, protecting the main market.
These three types of markets can transform into each other, and companies can use different management methods to make markets transform positively from weak to strong!
A realistic problem is before us: if transformation is not timely, the deep distribution system will only churn in the yolk market! Churning in markets where there is no room for deep cultivation can only create performance bubbles! Some companies will be troubled by false flattening and pseudo-intensive cultivation!
Similarly, if the deep distribution system is applied to the outer eggshell market, due to insufficient brand power or harsh competitive environment, it is not suitable for large-scale operations, and it is a waste of effort!
Thus, the most suitable soil for deep distribution is the egg white market! Such markets have both sufficient capacity and strong growth momentum. At this time, using the offensive power of deep distribution, combined with the strength of distributors, the two forces coordinate operations, form local advantages, expel competitors, and achieve stability!
In advantage markets, the deep distribution system is "idle"; in weak markets, it is "tired"!
In advantage markets, manufacturer personnel transform into a supervision system, restoring the distributor's role, using strong discourse power and profitability to manage distributors, and using the distributor's local forces to guard.
In balanced markets, manufacturers concentrate firepower to open the way, distributors follow up for defense, using the delicate lower-body skills of deep distribution to make terminals solid! When share, distribution rate, and profit margins rise, gradually transform into base markets.
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