Most friends who follow this official account are merchants engaged in food and beverage distribution, as well as KA operation managers working in food companies. So today, I have compiled the processes and methods for doing well in KA stores. I hope everyone gains some insights, and I also hope you share this widely. In Buddhism, giving is a form of cultivation, divided into financial giving, Dharma giving, and fearless giving. Financial giving brings wealth, Dharma giving brings wisdom. Sharing is Dharma giving. I wish everyone wisdom. Haha! Here is the main topic.

Single-Store Pressure Method This method mainly refers to a company entering one large store in a city, which must be the largest and most influential. The company should focus on product display and promotions, concentrate efforts on maintaining the product image in this store, and then distribute products through other channels to increase sales. In this way, there is also competition among large stores. When your product's visibility rises, negotiating with other stores becomes easier, and many problems will be solved.

Last year, a medium-sized food company entered a provincial capital market by only entering the most influential KA store, where they conducted displays, promotions, and other marketing activities, deliberately avoiding other stores. Because entering several stores simultaneously with a new product requires a significant amount of capital and may not achieve the desired results. This marketing tactic is called "concentrate firepower on one point, capture and occupy it, and more importantly, hold it firmly."

That is, to effectively occupy long-term and have a significant impact on competitors. Once, this medium-sized company held an event in this store, creating a lively atmosphere and winning the favor of many consumers. Among these consumers were executives from other stores who came to learn and understand the market situation.

Seeing this, they returned and asked their KA buyers why a certain product didn't come to their stores for activities. When the KA buyer said there was no stock, the executives immediately ordered the product to be introduced, and the company smoothly entered other stores.

Curved Detour Method This is a common method, which involves getting close to KA buyers and building relationships.

However, due to the special and sensitive nature of KA buyers' work, it is generally difficult for manufacturers to approach them. Eating and drinking, or sending red envelopes, are not feasible.

How to communicate emotionally? Let's look at the following example: A small food company had just developed a new product, but was troubled by the huge costs of entering KA stores. Several teams were sent but all hit a wall. The KA buyer was tough and refused all approaches: too many products, no shelf space. Money, dinner invitations, and gifts were all rejected.

Finally, the boss had to go personally. After investigation, the boss found a breakthrough to approach the KA buyer. The KA buyer had an excellent daughter in the third grade of elementary school, who loved calligraphy and had won a provincial first prize. The company decided to hold a "XX Cup Elementary School Student Calligraphy Competition" at the school. The champion was predictable, and the champion's father was invited to introduce how he cultivated a calligraphy champion. The father was surrounded by flowers and applause on the stage, deeply moved. At that moment, he felt closer to the brand, and soon the company's products were quietly placed on the store's shelves.

Top-Down Method This method is more difficult to use. By getting an introduction from acquaintances in the KA's superior department, you can avoid many detours. However, the product and company must have certain competitive advantages in the market; otherwise, even if you enter the store, sales will not be good.

Small Store Encirclement Method When a product enters a regional market, the strategy is clear: directly target terminal small stores and control the front-line market. Their slogan is: "With huge KA terminal costs, we refuse to enter KA." In fact, they surround KA stores with a network of small stores. When the product is available everywhere, KA will also lower its proud head.

One company in a prefecture-level city terminal did over 3,000 small stores, developed 40 second-tier distributors, and competed with large stores by not entering them.

Although large store sales are considerable, various costs are high. Small companies don't refuse to enter KA; they enter after increasing their bargaining power with KA, which saves a lot of money compared to rushing in at the beginning.

Borrowing Arrows with Thatched Boats Method As a company, you want to directly control terminal channels, but Chinese distributors also have certain advantages, whether in regional economic environment, local customs, or social background. Using distributors to enter KA is also one of the most effective ways. They not only understand KA's financial credibility but also have better abilities in handling tricky and difficult sales problems than the company. When a company encounters problems in product sales, the local distributor often takes the lead, after all, these people have lived locally for decades. As the old saying goes: "Acquaintances make things easy."

Detailed Process for Large Store Operations

Phase 1: Preparation Before Product Entry

(1) Understand Basic Information

  1. Prepare product inventory
  2. Familiarize with the product: fully understand product specifications, packaging, functional features, etc. Understand the new product launch strategy.

(2) Collect Information

  1. Understand competitor situation: store selling price, promotional activities, display status, sales situation, management methods of promotional personnel, cooperation methods with stores
  2. Store situation (mainly shopping malls, supermarkets): understand store credibility, visibility, efficiency, costs, foot traffic, and brief information about negotiators

(3) Site Selection Regulation: Before March 1, 2015, focus on modern channels, less on traditional channels. Principle: Target profitable shopping malls and supermarkets. Regional selection: Provincial capitals, special economic zone city urban areas, second-tier prefecture-level city urban areas, and county towns with sales influence. Requirement: Each branch company and business department should comprehensively evaluate local stores based on actual conditions, select appropriate stores, and list them for submission to the group marketing department for reference.

Phase 2: Entry

(1) Preparation of Materials

  1. Determine the product items for entry
  2. Finished product samples
  3. Product execution price system: entry price and suggested retail price range.
  4. Advertising materials
  • TV advertising plan
  • Outdoor advertising plan
  • Print advertising materials
  1. Display support plan: choose one of golden display, end cap, or floor stack in the store
  2. Salesperson support plan: suggest configuring 1 salesperson in influential stores to introduce products, guide consumer purchases, and increase product visibility and sales
  3. Promotional activity support plan
  • In-store and out-of-store buy-and-gift activity plan
  • Website promotional activity plan
  1. Small gifts

(2) Entry Negotiation Work

  1. First, pay attention to: (1) Whether the materials brought are complete (prepare for negotiation obstacles) (2) Prepare two sets of entry negotiation methods, with unchanged principles, to facilitate consensus with the store (prepare for negotiation obstacles)
  2. Basic concepts necessary for negotiating entry and promotional activities with some customers (for reference only) (1) Self-operated method

a. What if the store is unwilling to accept new products at entry? Be fully prepared! For long-term partners: Emphasize the benefits of operating multiple product categories, provide support, and cite competitors as counterarguments and the losses of not entering. For non-partners: Highlight product advantages, provide support, give examples (our products in other stores), and analyze the benefits of entering.

b. What if the store is unwilling to cooperate with special displays or DM (direct mail)? The importance of display for promotional stores can be illustrated by the following special price promotion examples: According to professional survey data:

  • Original price + original shelf: 100%
  • Special sales promotion measures + original shelf: 110-120%
  • Special sales promotion measures + special display: 150-180%
  • Special sales promotion measures (crazy) + special display + DM: 200-250%

Therefore, when executing strong promotions, cooperating with displays and effective DM will definitely double sales. It would be a pity to only sell at the original shelf with such strong promotions. The company supports reasonable display and DM costs (here, DM refers to effective DM, that is, DM that consumers will read and use, and that truly helps sales).

Based on the above analysis, if the store cannot cooperate with special displays or effective DM during strong promotions, it is recommended not to hold the promotion. Otherwise, if sales are poor after execution, not only does the company lose a promotional opportunity, but it also damages the customer's confidence and may create the misunderstanding that "even at such low prices, no one wants it."

Reasonable length of execution period For single-item promotions, the marketing department recommends an execution period of about 2 weeks (not exceeding 1 month). Too long a promotion period can cause "promotion paralysis" among consumers and stores. Conversely, too short a period may not fully convey the promotional message, preventing the promotion from achieving its full potential, which is detrimental to achieving results and affects the store's confidence in the company's products.

Coordination measures for various requirements For heavy discounts and bundle promotions, special coordination is required during execution. For other promotions, try to coordinate special displays while reducing costs (original shelf display must be maintained).

For special displays, the execution period must match the promotion period.

If a 2-week promotion is executed but a 1-month display support (for which we pay display fees) is coordinated, at least 2 weeks of the display will not have special sales promotion measures, failing to maximize the display's effectiveness. However, it is better to have a long-term display without paying display fees.

c. What if the store demands high gross margins and is unwilling to reduce margins to cooperate with promotions? Establish the concept of total profit: Total profit = gross margin * sales volume. The store reduces gross margin to cooperate with suppliers in jointly giving up profits to lower retail prices, aiming to double sales. In this way, the store's total profit will still increase significantly.

Establish the concept of market share: A well-managed customer's buyer will definitely choose the latter. Under the same total profit, at least they gain market share and price advantage over competitors.

Establish the concept of cost support: The company's execution of this special price promotion requires special displays and will also provide reasonable cost support. For a buyer, fee collection is an important aspect of their performance, and they will expect supplier cost support. Therefore, the company's cost support is an important bargaining chip in negotiations.

d. Store gross margin compression For special price promotions, the store's gross margin during execution should be significantly lower than its normal sales margin. The reduction should correspond to the intensity of the special price. It must be clear that only when suppliers and stores jointly give up profits can the final retail price be significantly reduced.

e. Reasonable control of cost rate Increase revenue: Only by increasing sales can the cost rate be ideally reduced. Do not underestimate the sales from executing promotions (normal 20%, general 40%, heavy 40% rule). Reduce expenses: Store fees are negotiable and reducible (e.g., if display and DM are executed simultaneously, part of the fees can be negotiated). The stronger the company's promotion, the more leverage we have in negotiating display and DM with the store.

(2) Distributor agency operation method

a. What if the distributor demands a high margin and is unwilling to reduce it to cooperate with special prices? You can analyze the benefits for the distributor, letting them know that cooperating with this promotion will bring the following benefits:

  • Total profit will not decrease. Since the company, distributor, and store jointly give up profits, plus the coordination of display and DM, sales will double, and the distributor's total profit will not decrease but increase.
  • The distributor's profit rate is guaranteed. For general special price products, the distributor can still enjoy the company's original gifts and various rebates. For heavy special price products, the distributor can still enjoy the company's original various rebates (only the margin is slightly lower).
  • The distributor's responsibility: Executing store activation promotions and display maintenance is also the distributor's responsibility.

b. When executing heavy special prices, after the distributor ships at special prices to the store, they ask the company to compensate for the price difference of that shipment, rather than buying special-priced goods. What to do? The company's requirement is not to compensate the price difference. The correct approach is: the distributor first ships to the store at the agreed price, and after verifying that the store has executed the company's required special price, based on the store's purchase order, the company sells the same quantity of goods to the distributor at the "distributor's purchase price."

  1. Negotiation process (suggested in three steps) Step 1: Business personnel and store personnel initially communicate and both propose cooperation conditions. Step 2: Business personnel and store personnel communicate again to coordinate and reach a preliminary agreement. Step 3: Business supervisor and business personnel communicate with store personnel to reach consensus and sign an agreement.

Note: Steps 2 and 3 can be completed in one session, or all three steps can be completed in one session to improve efficiency, but attention should be paid to quality.

(3) Product Entry Business personnel should follow the cooperation agreement: during product entry, business personnel should cooperate with the store for display to ensure the smooth acquisition of the negotiated display position.

Phase 3: In-Store Sales Promotion

  1. Price execution: For the first 2 months after launch, maintain normal retail prices (do not offer special prices).
  2. Salesperson configuration:
  • Configure salespersons upon product entry.
  • Salespersons must undergo pre-job training before starting.
  1. Execute special displays upon product entry:
  • Ensure normal display (choose golden position).
  • If conditions allow, execute special displays (suggested for 3-6 consecutive months): "golden, end cap, floor stack."
  1. Arrange in-store and out-of-store promotional activities upon product entry:
  • Time: Every Saturday, Sunday, and special holidays.
  • Location: Outside the store.
  • Venue setup: Use promotional tables, posters, etc., to coordinate, and pay attention to image.
  • Activity content: Buy and get gifts.
  • Gifts can be our products or purchased products, decided by the branch company or business department, but the promotional intensity should be controlled within a certain range to facilitate unified pricing (nationwide). (Except for Saturdays, Sundays, and special holidays, regions with conditions can also arrange promotional activities on weekdays.)
  1. Summary
  • Summarize in-store and out-of-store promotional activities once a week, and report execution to the marketing department once a month.

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