---
title: "Market Research: The Starting Point of an Excellent Sales Director"
description: "Opening recruitment websites, one finds that the most frequently advertised positions in FMCG companies are for channel development. Indeed, channel development is the first step for a company to monetize its products. Fifteen years ago, with rapid economic and population growth, channel development was relatively easy; as long as the product was available and the 'old playbook' was followed, subsequent marketing efforts usually went smoothly. However, in recent years, this is no longer the case: products are developed, but channel development is difficult; even when distributors are found, nurturing them is challenging, leading to 'abandoned' markets. What exactly is the reason? Even when farmers have favorable weather, they may still have poor harvests, which can be attributed to three reasons..."
author: "高级研究员 海游"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-09-30"
language: "en"
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# Market Research: The Starting Point of an Excellent Sales Director

> Opening recruitment websites, one finds that the most frequently advertised positions in FMCG companies are for channel development. Indeed, channel development is the first step for a company to monetize its products. Fifteen years ago, with rapid economic and population growth, channel development was relatively easy; as long as the product was available and the 'old playbook' was followed, subsequent marketing efforts usually went smoothly. However, in recent years, this is no longer the case: products are developed, but channel development is difficult; even when distributors are found, nurturing them is challenging, leading to 'abandoned' markets. What exactly is the reason? Even when farmers have favorable weather, they may still have poor harvests, which can be attributed to three reasons...

Opening recruitment websites, one finds that the most frequently advertised positions in FMCG companies are for channel development.
Indeed, channel development is the first step for a company to monetize its products. Fifteen years ago, with rapid economic and population growth, channel development was relatively easy; as long as the product was available and the 'old playbook' was followed, subsequent marketing efforts usually went smoothly.
However, in recent years, this is no longer the case: products are developed, but channel development is difficult; even when distributors are found, nurturing them is challenging, leading to 'abandoned' markets. What exactly is the reason?
Even when farmers have favorable weather, they may still have poor harvests, which can be attributed to three reasons:
> 1) Low-level mistakes: The seed and land are mismatched. If you plant a southern crop in northern soil, will the result be good?
> 2) Intermediate mistakes: The farmer fails to 'care for' their crops (crops and land), such as not timely pest control or weeding, not following seasonal operations, etc.
> 3) Advanced mistakes: Failure to thoroughly study the relationship between crops and land, such as excessive or deficient trace elements in the soil, overly acidic or alkaline pH, too dense or too sparse plant spacing, etc.
Looking back at FMCG, we face similar issues:
> 1) Does the product match the market?
> 2) Can the team be quickly assembled and operate efficiently?
> 3) Can the model balance the interests of product, team, and market?
Returning to the 'abandoned' issue, **the success of a company is essentially a process where product, team, and model mutually promote and achieve each other. A major prerequisite here is market-breaking research**. As the saying goes, 'Know yourself and know your enemy, and you will never be defeated.' Today, we will discuss the important aspects of market research from three perspectives.
**-01- Research Item 1: Product**
Product is the beginning of all marketing. Before setting out, a sales director must have a thorough understanding of their product, including but not limited to product category, packaging material, net content, core value proposition, channel price system, and channel profit. With these product elements, seek market opportunities. **If a comprehensive evaluation cannot be achieved, it is recommended to give up early; otherwise, the more you invest, the greater the loss.**
**1. Product category, process, packaging material, net content, and other product attributes**
First is product category. As product homogenization becomes increasingly severe, it is unlikely that a common category lacks competitors. Market research should study the intensity of competition in that category, or in other words, how 'red' the red ocean is.
For example: You are about to launch a new product—a 2-yuan natural water with exquisite packaging and rich trace minerals. Upon arriving at the market, you find that although the bottled water share is huge, Nongfu and C'estbon are in a fierce price war, with channel policies plus market display support totaling 15 yuan per case. It is recommended that you temporarily halt launching in that market, as determined by your category and market competition landscape.
To summarize, there are three points to note regarding product category research:
> 1) Does the category have sufficient sales volume and profit capacity in the target market? 2) Does the category have high growth potential in the target market, i.e., has it experienced high growth in the past and will continue to do so in the future? 3) Does the category have a relative competitive advantage in the target market?
Secondly, we all know that **the same product with different packaging and net content can lead to vastly different sales. The core term in market research is 'match'.**
For example: In the southern market, beverage packaging is often Tetra Pak with a net content of 250ml, while in the northern market, packaging is often PET with a net content of 500ml. What would happen if the products were identical or if northern products were sold in the south?
**China is vast and diverse, and residents in different regions have different preferences. This pattern is irreversible, and companies in the early stages should especially take a detour.**
Finally, compare the price per unit weight under the same category and quality. This is very important. Our consumers have stepped on countless pitfalls in pursuit of 'value for money' while continuously evolving to understand what true value is. Your net content can vary slightly, but the price per unit net content should be well controlled.
**2. Core value proposition**
Despite increasing homogenization, there are no identical products in the market. Differences in ingredients and their proportions always exist. **It is essential to distill your product's core value proposition and research whether it resonates with consumers in the target market.**
For example: Snack food is a vast market with countless subcategories. The 'Lili Xiang Da Xia Pian' (Crispy Shrimp Chips) produced by Want Want's Business Division II stands out in the puffed snack category.
First, there are relatively few branded shrimp chip puffed snacks on the market. Second, the chips are uniform in size, with visible shrimp pieces, and are as large as a palm. The core value proposition for consumers is 'puffed + seafood + large size,' which appeals to young consumers in the south who seek novelty and change.
**Companies should distill their core value proposition, which is the soul of the product and the reason for consumers to buy. The core of market research is to let consumers experience the product, tell them the value it can provide, and assess whether they accept it or have suggestions for improvement.**
**3. Channel price system and profit**
**The most critical factor in determining whether a product matches the market is the price system and channel profit distribution.** An unreasonable price system either erodes company profits or makes the product vulnerable to competitors; an unreasonable profit system makes it difficult for the product to reach consumers.
During market research, it is essential to communicate fully with distributors and store owners. They generally report that business is increasingly difficult: with the same effort, profits keep declining, sometimes even operating at negative margins.
For example: A store owner rents a shop for 12,000 yuan per month, equivalent to 400 yuan per day. The average daily turnover is 6,000 yuan, with expenses accounting for about 7%. Adding personnel, utilities, property management, business and industrial taxes, etc., a daily income of 15% is the cost. If your product occupies 500 yuan of sales in this store but the profit is lower than 15%, you can imagine it will quickly disappear.
The same applies to distributors: in first-tier cities, warehousing costs are tens of yuan, and no one will work for less than 6,000-7,000 yuan in salary. Products with unreasonable channel profits have no chance.
**Price and profit are both accompanying and constraining. In market research, it is essential to thoroughly study the mainstream price band and profit space for the product's category.** I do not recommend a one-size-fits-all approach nationwide. As mentioned, there are significant differences between the north and south, and the operating environments of cities at different levels vary greatly. The channel price system and profit should be understood within the positive and negative fluctuation range to assess product-market fit.
**-02- Research Item 2: Team**
**1. Team income**
Competitive income attracts a competitive team. This is very important.
During market research, if I encounter FMCG sales personnel, I will have a brief chat to understand their current income, salary structure, monthly rent or mortgage expenses, satisfaction with current earnings, and how much higher the salary would need to be for them to consider switching jobs.
Based on the team's income and the planned headcount, you can calculate whether the labor cost in that market exceeds the labor budget. If it cannot be met, consider reducing staff or increasing sales.
One point to emphasize: **In the absence of strong brand power, the budget for labor investment should be based on a competitive salary structure.** In later operations, you will find that recruiting 5 wolves is far more effective than recruiting 8 sheep.
**2. Identify and understand the recruitment targets**
Identify who is most suitable for the job: recent graduates, veterans of the FMCG industry, or certain special groups? **It is essential to thoroughly research the motivations and ideal income of the recruitment targets, and achieve both emotional and income resonance to quickly build a formidable team.**
For example: When Jinmailang promoted the 'Four-in-One' model, they targeted migrant workers for the 'small boss' positions. Couples increased stability, and hard work, a driver's license, and age between 25-40 were basic guarantees for completing the work. Such teams are stable and have strong market combat effectiveness.
It is important to have in-depth communication with target employees, not to take things for granted. Understand their previous workload, working hours, hardship, income, etc. Try to persuade emotionally and ensure satisfactory treatment.
**3. Seek methods to quickly build a frontline team**
Without people, the market cannot advance. The biggest cost of recruitment is time. FMCG sales have a rhythm; if you miss it, you lose a year.
Middle and senior management can be recruited nationwide and transferred across regions, but frontline operators and frontline managers should ideally be recruited locally. The reason is simple: locals have natural trust when dealing with each other, which is more beneficial for market expansion.
At this point, research should go deep into frontline operators to understand where you can find the team you need, how to join their WeChat groups, and how to send recruitment notices point-to-point.
**4. Other aspects**
Other aspects include understanding local customs and respecting local traditions, preparing for future team building.
**-03- Research Item 3: Model**
Generally, when a company's product is launched, the target consumers, sales channels, and distributor operating methods are basically determined. The need is only to verify the feasibility of the model and refine some details. Since each company's model is different, I cannot share further, but I will use an example.
The traditional FMCG operating model relies on the three capabilities of local distributors: **management capability, business capability, and distribution capability**, to move products from factory to consumer.
A certain company, to fully activate the organization and individuals, broke convention by separating management rights, sales rights, and product ownership. It transformed the employment model of managers + sales personnel with distributors into a partnership model of three independent individuals, jointly creating value and sharing the results.
If this model is to be launched in a new market, what should the sales director evaluate?
**First, interests are the bond among the three parties.** Research whether the profit-sharing system satisfies the interests of all three parties.
**Second, the product is the bridge among the three parties.** Research how to quickly monetize the product, including methods for rapid distribution and sell-through.
**Finally, during actual market visits across all channel attributes, identify potential issues after the model is implemented.** For example, the product's fit in various channels, countermeasures against competitor blockades, and handling methods and locations for near-expiry products. In summary, the sales director's research on the market model is a holistic consideration, evaluating the feasibility of the model's implementation and the methods to ensure its success from multiple dimensions.
**Final Thoughts:**
**A sales director must have their own opinions. Your market research can even determine the survival of the company. First, objectively report the actual market visits; second, objectively report the opinions and suggestions of industry practitioners; and finally, even more objectively report your own true views.**
If the product, team, and model all show signs of incompatibility with the market, you must step forward immediately to stop the market expansion plan, preventing 'half-cooked rice' and 'abandoned' situations. This is being responsible to the company and to yourself.
Tips: If your information is adopted, you will be paid 400-2000 yuan.


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