In modern business warfare, as competition intensifies and brand promotion and terminal marketing costs soar, FMCG companies are shifting marketing work to distributors while providing sales support. Manufacturers invest more energy in product development and brand planning, forming a reasonable division of labor in the marketing chain. However, distributors often fail to cooperate, demanding policies and fees, or even engaging in channel stuffing, which troubles manufacturers. How can manufacturers make distributors operate the market according to their requirements and achieve a 1+1>2 effect? Based on over ten years of experience managing distributors, the author suggests that by implementing the following nine strategies, distributors will not only become obedient but also dependent on the manufacturer.
Strategy 1: Help Distributors with Market Strategic Planning Most distributors, due to limited education and lack of rigorous professional sales training, coupled with their survival characteristics (distributing others' products with certain distribution periods), often rarely or do not know how to conduct strategic planning for the brands they represent. Therefore, in market operations, they mostly consider short-term interests rather than long-term benefits. If the market is operated with this mindset, it is fatal for the brand. The local market is composed of multiple channels organically combined: there are strategic channels that play a decisive role but are unprofitable; main channels with large sales volume but thin profits; and profitable channels with small volume but high profits. To fully develop the market, full distribution and full coverage are necessary. Missing one channel means the entire market cannot be operated effectively. When distributors choose channels, they definitely choose the ones that make money, which inevitably leads to problems in market operations. Therefore, when selecting distributors, both parties should conduct detailed market research based on local market capacity, market environment, consumption habits and interests of target consumers, competitive conditions, the manufacturer's marketing strategies, and the distributor's market position, strength, and resources, to formulate a market development strategic plan. Only after reaching a consensus should they start operating the market. The key is how to make distributors accept our strategy. Distributors are also very wise; as long as we can hit the nail on the head, clarify pros and cons, have good predictions for future market trends, have successful cases from other markets, and can articulate the losses if the distributor does not follow, it is impossible for them not to accept. Because distributors want to make money, if you point out a path that allows them to make money long-term, wouldn't they take it? Only when distributors agree with the strategy will they become strategic partners who share weal and woe with us, ensuring the manufacturer's stable market position.
Strategy 2: Full Sales Support, No Worries, Making Distributors Dependent on the Manufacturer After the market development strategy is formulated, even if distributors accept it, they still have doubts and dare not fully implement it. At this time, the manufacturer needs to follow up, jointly develop a market expansion plan based on the above strategy, and establish a brand operation team composed of sales personnel from both the manufacturer and the distributor. The manufacturer's personnel lead market development, while the distributor's personnel handle market maintenance. The distributor is also required to provide logistics and financial support. At the same time, the manufacturer should support part of the advertising and terminal costs needed for the distributor to start the market. During the market launch period, operating the market in the manufacturer's name is much more effective than in the distributor's name. Moreover, this has two advantages: first, it makes the distributor deeply feel the manufacturer's support; second, since market development is carried out by the manufacturer, it weakens the distributor's position in the minds of terminal retailers, making them always believe they are directly cooperating with the manufacturer, thereby reducing the distributor's control. Thus, the distributor becomes highly dependent on the manufacturer.
Strategy 3: Reasonable Profit Distribution To control distributors well, there is a principle: do not let distributors become too powerful, as they would pose a threat to the manufacturer. Another principle is to make distributors exclusive dealers, not allowing them to operate competing brands. Otherwise, the manufacturer will force them out. In market competition, the strong set the rules. Because GOME is too powerful, domestic appliance manufacturers must listen to GOME. Therefore, designing profit margins for distributors at all levels and outlining the distributor's development curve is a required course for manufacturers. All channel members should receive reasonable profit returns. How to design this? Letting distributors make money is an unchanging rule, but they must never make excessive profits. So when designing, we consider the distributor's increasing desires year by year, design the annual profit growth rate, and create a "chicken rib" that makes distributors feel: if I don't do it, it's a pity to switch; if I do, there is a fixed annual income growth.
Strategy 4: Targeted and Strategic Training for Distributors Nowadays, companies are strengthening training, believing it can improve employee quality and work efficiency. However, training for distributors should not be like internal training; it must be cautious. Many companies organize distributor leaders to attend EMBA education. When they graduate, they say goodbye to you because they think they are very capable and that being a distributor for your brand is a waste of talent. They then go to set up their own factories and create their own brands. Whether they succeed is uncertain, but for us manufacturers, it is at least a failure. Training for distributors is necessary; otherwise, distributors won't understand the manufacturer's development ideas, and without consensus, the market cannot be operated. However, our training for distributors must be based on the company's development strategy, corporate culture, and values—training that is conducive to company control—rather than blindly enhancing the distributor's development concepts, which is not beneficial to the balanced development of both parties. Remember, the manufacturer's development speed must exceed that of the distributor, and the manufacturer's market insight and development concepts must lead the distributor.
Strategy 5: Continuously Instill Ideas into Distributors We have always hated pyramid schemes—this illegal activity—but secretly admire their successful "brainwashing" methods. We should regularly have our salespeople "brainwash" distributors. To do this, we need to create a beautiful vision for distributors, letting them know what benefits they will get when they do well with our brand. Practice has proven that the effect is very obvious. The loyalty of customers managed by salespeople with good eloquence and persuasion skills is significantly higher than that of customers managed by those with poorer eloquence and weaker persuasion. Therefore, it is particularly important for manufacturers to continuously instill ideas into distributors.
Strategy 6: Help Distributors Improve Daily Management Capabilities The distributors corresponding to SMEs are mostly small in scale, with non-standard processes and management. Manufacturers should guide them to establish various rules and regulations, improve internal operational processes, enhance management levels, and help distributors cultivate talent. The manufacturer's middle and senior managers should periodically inspect the distributor's market, provide on-site demonstration management, etc. Only in this way can both parties cooperate more closely and unitedly.
Strategy 7: Establish Standardized Market Management Systems and Strictly Enforce Them Distributors are partners of the manufacturer, not subordinates. Distributors only consider how to make money, so they not only fail to maintain the manufacturer's market management system but also continuously study the manufacturer's strategies to find loopholes to exploit. This is a test for the manufacturer. To manage the market well, a strict and standardized market management system is indispensable. The Fuzhou agent of Qingdao Double Star Group performed well in the market, ranking among the top five agents in annual sales. As sales increased, the distributor's ambition and desire expanded rapidly, with incidents of channel stuffing, cross-region selling, policy manipulation, and violations occurring frequently. Given the distributor's strong local influence, Qingdao Double Star Group dared not take action. The distributor became even more brazen, and driven by substantial profits, overnight replaced all Double Star specialty stores with its own brand stores. It is evident that having a system without strict enforcement is useless. Customers sometimes violate rules as a test to see the company's attitude. If the company is principled and punishes immediately, customers will not dare next time. If the company's control is lax, they will escalate next time, and by then it will be too late to manage.
Strategy 8: Appropriately Control the Duration and Territory of Brand Distribution Three types of distributors severely restrict the company's development. One is distributors with overly large territories. Although they hold a large market, they lack the capability to operate the entire market, leaving many areas blank. However, the central city operates well, making it difficult for the manufacturer to coordinate. If you move them, the central city might be lost; if you don't, there are still large areas not developed. Another type is distributors with overly long contract periods. Some need adjustment or elimination, but because the contract has not expired, making adjustments would cause significant losses for the distributor. The third type is distributors who received initial stock or month-end payment terms during market development, or those with local strength but serious violations. Terminating contracts with such distributors would cause significant economic losses to the company, but continuing cooperation would mean the market cannot be developed or the negative impact on the company grows.
Strategy 9: Manufacturers Must Continuously Enhance Brand Value Ultimately, whether distributors want to cooperate with the manufacturer depends on whether distributing your brand can make them money. Is your brand recognized by consumers? What are the reasons for consumers to buy your products? Is your brand value at the forefront of the industry? Does your brand have distinct personality? What is the future development prospect of your company? Why are Coca-Cola, Procter & Gamble, and China Resources (Beer) so "arrogant" in their requirements for distributors? Because these well-known first-line brands can answer the above questions well. So distributors are willing to listen to the manufacturer, actually for the sake of money. Because you can help them make money, they listen to you. When you cannot make money for them, they will immediately terminate cooperation. Therefore, as a manufacturer, you should focus on enhancing your brand value, brand awareness, reputation, and loyalty. Only in this way can you continuously increase distributors' desire to cooperate.
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