In the past year, news of declining performance for both instant noodle giants has been frequent. On February 22, Master Kong Holdings announced an internal message and profit warning on its official website, stating that its annual financial performance for the year ended December 31, 2015, had regressed, predicting a 35-40% year-on-year decline in profit. The news drew sighs from many media outlets. Master Kong also provided three explanations: 1) Product upgrades and price increases for instant noodles led to short-term sales decline due to channel观望; 2) The beverage business, based on conservative financial principles, actively made impairment provisions; 3) Exchange rate fluctuations during 2015 affected the group's profitability. In the board's explanation, special emphasis was placed on "stable relationships with customers and suppliers," hoping to stabilize morale. However, for FMCG products, channels are the lifeline. No matter how Master Kong explains, it cannot avoid the fact of channel观望 and subtle changes in supplier relationships. The Bitter Fruit of a Hero's Decline Master Kong's channel refinement was once almost an industry standard for FMCG terminal sales. By providing auxiliary sales and order guidance to dealers, and increasing the granularity and control of regional market management, Master Kong quickly established its dominance in instant noodles. However, this also brought hidden concerns: the expanding management radius increased management costs; dealers, once regional lords, gradually became delivery and advance-payment agents under the company's requirements. Although they were well-off, they gradually lost their own operational capabilities. So when the company had to reduce staff due to cost control, the dealers' "lost skills" led to an awkward situation where they no longer knew how to manage their familiar markets. Judy's Analysis Master Kong's performance decline can be attributed to three deep-seated reasons: First, the lack of services to help dealers improve profitability widened the gap between the company and its dealers; Second, although personnel cost management seemed strict, it lacked a real and objective channel incentive system, resulting in poor staff efficiency; Third, the company attempted to provide help to dealers through management tools, but without changing the old management logic and methods, it met with resistance from dealers. Industry Downturn: How Can Companies Lead Dealers Out of Trouble? As the industry leader, Master Kong has been accustomed to superiority over dealers. The rules of the game were set by the company alone, leaving no room for dealers to comment. Twenty years ago, during the golden period of rapid growth in instant noodles, dealers flocked to well-known brands. But when industry growth slowed and market growth declined, the self-important Master Kong again demanded that dealers cooperate and share the hard times. Dealers, driven by self-interest, often adopted a "wait-and-see" attitude. As is well known, the relationship between a company and its dealers is based on win-win cooperation. As soon as dealers sense that business is not good, it immediately affects their investment in the company's products. Take Jinmailang, also in the instant noodle industry, as an example. In 2015, its profitability rose against the trend, with many dealers achieving million-yuan profits. At the Jinmailang Noodle Products Dealer Conference held in October last year, Chairman Fan Xianguo proposed the "Four-in-One" dealer standard. This includes daily work tools for dealers: vehicles, personnel, regional contracts, and terminal machines. With the implementation of the "Four-in-One" standard, Jinmailang helped dealers master scientific tools to continuously improve profitability, enabling dealers to respond to Jinmailang's call: "If you don't want products to sleep in the warehouse, dealers must open more new outlets and place products on the shelves of new outlets to create new sales opportunities. To serve more outlets, you must equip with reasonable vehicles to ensure work efficiency." In recent years, while upgrading its product structure, Jinmailang has continuously exported advanced management concepts and tools based on "Internet+" and "big data" to dealers, improving their management capabilities in areas such as outlets, profits, and inventory within their regions. Through daily real-time feedback from sales staff, and supervisors checking and addressing issues promptly, problems are nipped in the bud. For markets of different maturity levels, Jinmailang uses data collected from terminal machines to make big data calculations, ensuring that dealers' vehicles are fully loaded, improving efficiency, and expanding service radius. This practice of setting reasonable outlet numbers and vehicle configuration references for each regional dealer helps translate sales targets into executable actions. The sole purpose is to help dealers make money. Companies and Dealers: Manage or Help? Master Kong and Jinmailang are both major brands in the instant noodle industry, but their approaches to dealers are like a comparison between Chinese-style parental management and Western-style partnership management. The difference in management philosophy leads to completely different outcomes when the industry faces bottlenecks. Master Kong: As labor costs continue to rise, the human-wave tactic is no longer feasible, forcing the company to shrink its front lines. As a listed company, the quickest way to improve its financial statements is to lay off a large number of frontline sales staff. But while addressing the balance sheet, the weakened operational capabilities of its dealers have become a stumbling block for the company's sales management. Jinmailang: The company exports tools to enhance dealers' own operational capabilities, and through on-site guidance from company representatives, urges dealers to grow together with the company. The level of dealers' own management capabilities is the basic requirement for cooperation. Only dealers with management capabilities can ensure the company's sustained market growth. FMCG Terminal Management Models Urgently Need Upgrading Despite the bad news since 2016 of profit declines for FMCG giants like Master Kong, Want Want, and Huiyuan, it is a warning that FMCG companies must upgrade their terminal management models. The leaders of these large companies must rethink from scratch the relationship between companies and dealers, their roles, market position value, and management methods. Taking the examples of Master Kong and Jinmailang mentioned above: if Master Kong's channel refinement strategy was a subversion of the traditional five-level wholesale system, allowing the company to fully control dealers, then Jinmailang's terminal "Four-in-One" strategy is a substantive help for FMCG food companies to truly enhance dealers' self-management capabilities. This article is original. For reprinting, please retain all information below this line, indicate the source, and contact Xiaojia. Thank you very much. ▲Long press to identify the QR code and follow. Good articles every day. Official account: Sales Jia This platform will soon organize dealers interested in transforming to B2B platform e-commerce to visit and learn from B2B platforms. 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