Due to the impact of the epidemic, as of a few days ago, most beverage companies have just resumed work, but some warehouse and road closures still exist. In previous years, major beverage companies would have already finished their bustling order meetings and started preparing terminal layout. Here, let's review the process.
1. Before Spring Festival: Brand owners issue water head policies, including product discounts, payment rewards, warehouse subsidies, channel bonuses, and target incentives—promotional policies that encourage distributors to ship goods.
2. After Spring Festival: Distributors organize regional sub-distributors, wholesalers, and key terminal stores to hold order meetings, attracting capital and seizing inventory. Order meetings generally take three forms:
- Banquet-style order meetings; 2) Tea party-style order meetings; 3) Visit-style order meetings.
3. After the first month of the lunar year: Distributors, sub-distributors, and wholesalers join forces to seize terminal stores' capital and warehouse space, and visual merchandising such as cut cases and displays that attract consumer purchases follows.
4. Around April: Temperatures rise, preparing for the peak season, consumer education, promotions, and the freezer battle begin.
Based on the current progress of the epidemic, the market is expected to return to normal operation at the earliest by the end of March, meaning distributor warehouses will be basically full, and subsequent distribution actions will be largely stalled.
From a supply chain perspective, the product flow is: Brand owner → Distributor → Sub-distributor/Wholesaler → Terminal store → Consumer. Non-planned pre-packaged products mainly sell offline; online is just a bonus. The consumption peak season will not be delayed by the epidemic, so there is not much time left for manufacturers to prepare.
The supply chain node process cannot be compressed, but time can. Next, let's organize our thoughts and provide some inspiration and considerations for beverage manufacturers.
-01- Several chasms that all manufacturers cannot cross at present
- The epidemic affects different regions differently, and factories and distributors will return to full normal operation at different times.
- The infection situation varies within the same region, leading to local traffic blockages and community closures, leaving the terminal-store-centered upstream and downstream supply chain system incomplete.
- Under the epidemic, provincial, district, and county governments have different management measures, and special policies during special periods vary, so market operation methods will change.
- Affected by the epidemic, the operational capabilities of economic entities (distributors) will change significantly; some distributors may be unable to continue normal operations.
- China's market is vast with regional cultural differences; under the epidemic's influence, the work status of manufacturer teams after returning to their posts will also change greatly.
In summary: The 2020 water head layout is destined to be unusual. The most obvious point is that it is impossible to achieve nationwide synchronization and simultaneous water head layout. A customized water head layout plan based on province or region is necessarily an important part of strategic adjustment at this stage.
-02- Quickly build an integrated manufacturer-distributor convenient operation model: Customer as employee, employee as customer
In studying the supply chain: brand owner - distributor - sub-distributor/wholesaler - terminal store - consumer, each link is indispensable. To accelerate the layout, we must first achieve integrated manufacturer-distributor operations, customer as employee, and employee as customer.
That is: Treat distributors as employees of the brand owner, with unified management and command by the brand owner to reduce internal friction and gain time in efficiency. At the same time, treat brand owner employees as distributors, allowing them to go deep into the distributor's operations, participate in the daily operations of the distributor team, and achieve flat policy communication and implementation, gaining time in communication efficiency.
Ultimately, achieve an integrated manufacturer-distributor mindset with consistent concepts: merchants support manufacturer decisions, manufacturers fully respect and grant merchants rights, both parties leverage their core values based on real market conditions, reduce costs and increase efficiency, and maximize mutual benefits.
The concept is good, but time is tight. How to quickly build an integrated manufacturer-distributor convenient operation model? Cultivating relationships is obviously too late; the best way is to screen. It is recommended to operate from the following aspects:
1. Selection of target distributors
Distributor business models are divided into three types:
- Exclusive: The distributor operates only one brand owner's products; 2) Dedicated sales: The distributor operates multiple brands but has a dedicated sales team for one brand owner's products; 3) Mixed sales: The distributor's one sales team sells multiple brand products simultaneously.
Exclusive operation is actually a result of manufacturer-distributor game-playing, cooperation, and mutual trust; it must be a result, not a starting point. No manufacturer initially requires distributors to be exclusive, and conversely, no distributor initially operates exclusively for one manufacturer. Obviously, in special times, exclusive distributors are most suitable, followed by dedicated sales distributors.
2. Selection of target markets
The above is the epidemic management regulation issued by the Jiangxi Provincial People's Government on February 17: requiring that vehicles and personnel, after necessary temperature checks and disinfection, be allowed to pass without restricting the passage of people or vehicles.
With this policy, the Jiangxi market can quickly return to normal operation and can be included in the water head target market layout.
It is believed that as the epidemic is controlled, various provinces will gradually introduce corresponding measures, so brand owners must always pay attention to current policies to ensure timely screening of target markets.
3. Joint manufacturer-distributor promotions
After selecting target distributors and markets, joint promotions are the next focus. During the epidemic, product supply and demand have not changed; only the supply-demand bridge is blocked. After returning to normal, terminal store inventory will be small, and the cash flow pressure from long closures will be significant, so the demand for profit in subsequent operations will be stronger.
In other words, they are very concerned about product promotional policies. At this time, the brand owner's strength is limited (compared to competing brand owners), and the distributor's strength is limited (compared to competing distributors), but if both sides contribute some profit for joint promotions, the strength is unlimited. In today's product homogenization, for similar products, a one-yuan effort might make a world of difference in sales. After the epidemic, the competitive situation in the new consumer market environment is increasingly fierce; only with sincere cooperation between manufacturers and distributors can they achieve a competitive advantage of 1+1 > 2!
4. Integration of manufacturer and distributor employees, joint assessment
Led by the brand owner, the distributor's person in charge formulates personnel assessment policies and implements them, with the brand owner inspecting and verifying. Combine the employees of both sides into one, in the same trench, doing the same thing, enjoying the same rewards and punishments (employee as customer).
The purpose is to ensure that policies are unified at the employee level and smoothly implemented.
5. Conduct phased manufacturer-distributor water head meetings
The market is constantly changing, especially in special times. Competitors may cut losses and clear inventory, so the core of manufacturer-distributor integration is effective communication, promptly identifying market issues and communicating via meetings. A weekly distributor meeting model can also be established (not necessarily in-person; online meetings are best), where everyone shares opinions and summarizes methods.
At this time, it is recommended that brand owners set up rewards conducive to discussion, for example, if a distributor shares successful experience that is recognized and replicated, then reward the distributor with some market expenses to encourage thinking and sharing (customer as employee).
Summary: The beverage industry can be said to be a necessity. To reverse the passive business situation, when the market environment cannot be changed, only by carefully analyzing distributors' pain points, prescribing the right medicine, giving distributors a sense of security, achieving 'you in me, me in you,' can we effectively cater to distributors, reduce internal friction, quickly achieve manufacturer-distributor integration, and make products stand out in the market.
It must be emphasized that the peak season is coming soon. At this time, manufacturer-distributor integrated operations are selected. Brand owners must first grasp their core customers and core markets to ensure the basic market is unchanged. As for other markets, proceed step by step and wait for opportunities.
-03- Quickly achieve integrated B2B and B2C operations
Special emphasis: The B2B and B2C integration I mention does not mean directly reaching consumers (C-end) with products, but rather simultaneously conducting B-end and C-end work along the channel.
In studying the supply chain: brand owner - distributor - sub-distributor/wholesaler - terminal store - consumer, brand owner and distributor merge into one, and terminal store and consumer also merge into one.
Generally, a sales team focusing on one thing can achieve perfection, so brand owners and distributors first require the team to do basic market work at terminal stores: collect funds, press storefronts, stock shelves, enter freezers, and visual merchandising, and then do consumer education and promotions. On the B-end, it's 'selling'; on the C-end, it's 'buying.'
Nowadays, the most effective way to improve timeliness is integrated B2B and B2C operations, similar to the 'doing business' left by our ancestors.
1. Complete consumer education at the B-end
I remember when working at Nongfu Spring, the company required everyone to complete 8 route water tests per day, which was the 8-step visit plus 1 step: in the terminal store, simultaneously complete water differentiation education for in-store consumers and the store owner. At the same time, there were promotional items like pens, tissues, and garlic peelers in the backpack, ready to be used in highly competitive terminal stores.
The core of sales is accumulating loyal consumers and stimulating the purchase desire of non-loyal consumers; the persistent effort of dripping water wearing through stone is the most effective.
2. Complete product sell-through at the C-end
A few years ago, when Wanglaoji was promoting, they did this well. After making good displays in key restaurants and convenience stores, they placed in-store promoters for one-on-one product introductions and one-on-one sales pull. Now it needs improvement: time is tight, so salespeople must simultaneously take on the dual functions of salesperson and promoter (wealthy companies can hire a large number of temporary promoters), and time nodes also need guidance.
For example, adjust lunch break time: 12-13:00 as restaurant promoters, 17-18:00 as community convenience store promoters. Conduct targeted consumer activities based on actual conditions to drive sell-through at target terminal stores.
Summary: The core of quickly achieving integrated B2B and B2C operations is completing consumer education at the B-end and considering B-end sell-through at the C-end. This raises the work requirements for grassroots sales staff and increases their workload.
Therefore, it is recommended that manufacturers and distributors jointly conduct training in advance on product knowledge, communication skills, promotional skills, etc., and set goal-oriented achievement rewards to increase staff motivation.
Final words:
This article mainly analyzes the water head layout strategy that differs from previous years after the epidemic. The purpose is to efficiently complete the work at each node of the product flow within a limited time, so that when the peak season arrives, manufacturers and distributors can easily cope. Matters similar to previous years, such as how to formulate water head policies, how to hold order meetings, how to quickly distribute, etc., are not mentioned.
Still that saying: The process of water head layout cannot be compressed, but the time to complete it can. Which brand can stand out and complete the process items with quality and quantity within the limited time? That brand will be the winner in the beverage industry in 2020.
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