【Author's Note】 This article is not about how to do condiments; it is a work summary written during my tenure at Wanweike, the Chinese company of the US meat giant SFD. However, it has great reference significance for shelf management of condiments and extends to other products in the entire fast-moving consumer goods (FMCG) industry. This article was published in the fourth issue of the channel edition of Sales and Market in 2004. When I first got the magazine, I had already taken a position at Singapore's Fuda Food Group (now a Heinz company). At that time, the company's foreign president read it and praised it highly, making two color copies and posting them on the two main corridors of the company for everyone to study. In the past 10 years, my former rival Shuanghui has also become my client, inviting me to teach them how to win in KA channels. Ten years have passed, and readers have continuously come to ask about some methods in this article. Recently, some readers saw this article and sent emails to express their gratitude, saying that using the methods in this article has achieved very good results in the local market. An article that can be read for 10 years is something I never expected. Why does this article have such appeal? Please see:
In the freezer and refrigerated cabinets in stores, the shelves emit cold air. Expensive equipment, huge electricity consumption, milk, beverages, buns, fruits, etc., all need refrigeration. It is already quite good to have about one meter of display shelf left for our low-temperature meat products. And several major brands compete in this limited space. Don't forget, the time left for you to succeed is not long, because the shelf life of such products is generally between 35 and 50 days. From the time the goods leave the factory to immediately entering the store, if they are not sold within 15 days, they face returns and will never be sold again. If you have the ability, come and fight with bayonets in this one-meter space.
Turning Enemies into Friends In a hypermarket in the Pearl River Delta of Guangdong, Shuanghui's promoters were very dedicated. Thinking about it, our company's promoters were really inferior. Since there are generally many promoters in the freezer and refrigerated cabinets, to prevent promoters from pulling and tugging at customers in front of the shelves and affecting the store's image, the store arranged promotions for different manufacturers in turns. This caused promoters from different manufacturers to speak ill of our products behind our backs. Our promoters were very angry and retaliated in kind. My salespeople did the same, but I thought that this was not a long-term solution; it was like fighting a tunnel war, resulting in both sides losing. So I taught my salespeople to be nice to Shuanghui's promoters. She is also working for a living, not the boss herself. From time to time, sincerely praise her and treat her to something. This trick worked; the competitor's promoter indeed stopped saying bad things about us. Of course, we never said anything bad about them either. The relationship was built day by day. Since our products sold well, they couldn't sell theirs. Finally, I persuaded her to abandon the dark and come to the light, and we recruited her, making her one of our best promoters.
Cutting Off Their Retreat Frozen food generally has a short shelf life due to preservation issues. This is a product characteristic. Analyzing it, there is a big problem: if it is not sold within the shelf life, it faces large-scale returns. We found Yurun's problem: their return rate was quite high. Their distributors were unwilling to supply anymore, promoters withdrew, and later their shelf space shrank more and more. They returned goods, and because the competitor withdrew, our importance in the freezer cabinet increased day by day. The store could no longer negotiate with us hard, because if we stopped doing business, they would lose a lot of business. Negotiation is the head office's business, but each store competes with each other for good sales. If a store's sales are low, the store supervisor may not get a bonus, and even their job might be at risk. This is the principle mentioned in The Art of War: 'When you feed on the enemy's grain, it is worth twenty times your own; when you defeat the enemy and grow stronger, you become stronger.'
Reconnaissance by Fire In a hypermarket in western Guangdong, Shuanghui's business was very good, but we never knew their exact numbers. Since the supermarket computer system categorizes by category, when we pulled up our product data, the competitor's product sales data was also pulled out. But the buyer would not show you these data. Therefore, when the competitor's data appeared for a moment, if you could remember those numbers, you succeeded. I kept looking for these opportunities, and finally I saw it: their best-selling product was small-pack black pepper cocktail sausages, accounting for nearly half of the store's total sales. We then focused on promoting this product, building display stacks, offering special prices, doing in-store POP, and having promoters focus on recommending it. After a month, the other side's sales performance all came down. For two consecutive months, I think their intestines probably turned green. We also used this method to force back these so-called world's largest meat companies or China's number one meat, China's number one frozen meat product, or Fortune 500 companies. Watching them proudly advertise on various media, I thought to myself, aren't they still trampled under our feet?
Winning Allies Honestly, store buyers cannot really become our allies, but I have my ways. Buyers are also tired; their job is to get the maximum benefit from manufacturers. If they don't achieve this, they also have to be laid off. So whenever I see those sexy and charming but very demanding buyer ladies, I understand the store owner's good intentions. Buyers have their tasks, which is what the boss wants them to do: ask manufacturers for more fees. Now, store buyers seem to have become project managers. They not only have to ask manufacturers for fees and organize supply, but also consider the turnover of goods after entering the store, smooth sales, other marginal benefits brought to the store, and whether doing this product can enhance their competitiveness. They have received good training in 'category management' and do everything according to the most scientific means. They look unfathomable, but that is their bottom line. If you can understand this, dealing with them will be much easier. I am glad that my competitors' sales managers have not yet learned and applied this set of things. I prepared a set of talking points and repeatedly trained my sales team on them: I would tell the buyer that large stores divide all suppliers into three categories: one is for earning fees; the second is for earning sales volume and popularity; the third is for earning profit. Asia Pacific Food is obviously the second type. Even if all suppliers do not support your promotions, I stand firmly behind you. This can be written into the contract; it doesn't matter (actually, this is one of the company's strategies: through continuous promotions, first capture market share and build the brand). You see, this is the sales report from another supermarket in the same city. Our sales amount is XXXX yuan. Why can't this store achieve it? Buyers are mostly half-pushing and half-yielding, and the annual contract is thus obtained. Generally, those who have been in the buyer position for less than three years are basically all handled. For buyers with more than three years, they will insist on asking for a price, and we will meet hardness with hardness, forcing them into the trap. Several buyers couldn't outdo us. After stopping supply for a month and a half, they came to us themselves, asking to renegotiate, and the conditions were naturally much more favorable. We told them that with such a large sales volume in their store, they are very stable. Whether other brands come in or not, it doesn't matter; they can easily report to the boss. But if other brands want to enter the store, they can boldly charge them fees. What they can't get from us, they can get double from them. I am very clear that only when our sales volume rises do we have absolute negotiation advantage.
Profit Story This was learned from P&G, and I used it myself; it's very good. It is to tell the store buyer this thing. Put our Wanweike meat products on the shelf. On a 28-centimeter-wide shelf, you can place 20-30 packs of large-pack hot dog sausages (if it is 120g small packs, the sales and gross profit are even more). Each month, it can turn over about 4-6 times, with total sales of 1200-3000 yuan, and your gross profit is between 15% and 25%. But if you put frozen buns, beverages, fruits, because their unit value is very low, the total sales value is only half, one-third, or even one-tenth or lower of displaying Asia Pacific Food. So how much shelf space do you think you should give us? These are our past sales data, and these are our sales data from other places. Use the competition between stores to negotiate with buyers. I am happy that my competitors did not calculate accounts with buyers like this, thinking so thoughtfully for them. I did not attack my competitors Shuanghui and Yurun; I only targeted our common potential competitors. Shuanghui and Yurun should be happy, right?
Store Merchandising Whether it is display stacks, shelf displays, or promotional activities, Asia Pacific Food does the best merchandising among similar companies. I prepared a small booklet on Product Display for each colleague responsible for follow-up in each regional market, and everyone followed the principles and standards listed to make the best improvements. I am glad that when competitors were only doing personnel promotions, DM, and special prices—these shallow promotional activities—we had already started merchandising displays, category management, and sales merchandising. These things greatly increased our sales, reduced return rates, and greatly enhanced our ability to negotiate with stores. Fighting for customers' eyeballs and increasing sales in the store must be like this. Since the cost of trading with stores is high, once you enter the store, you must do everything possible to sell more and push sales up, so that the contract fee ratio will decrease and company profits will increase. We continuously used tools like red houses (Chimney), POP, wobblers, display zones, 3.5 yuan zones, insert cards, and hanging flags, achieving good results. Lotteries, tastings, and giving small gifts are also good ways to sell vividly. These activities came in waves, cultivating a large number of loyal customers.
Mr. Chen Xiaolong (personal WeChat: chuchen), a famous marketing expert in the Chinese condiment market, is currently the general manager of Guangzhou Mingdao Marketing Consulting Co., Ltd. He has made outstanding contributions to the development of many well-known domestic and international brands in China, including Haitian Flavoring, Lee Kum Kee, Hengshun Vinegar, Jialong Food, Singapore Fuda Food (Master Sauce Soy Sauce, Guanghe Fermented Tofu), Meile Food, Baili Food, Baiweijia Food, COFCO Group, Shuanghui Group, Yili Dairy, Mengniu Dairy, Hengan Group, Qiaqia Sunflower Seeds, Vinda Paper, Ximai Oatmeal, Xiaohutuxian Wine, Danbaoli Yeast, etc. Since 2000, Mr. Chen has published research articles on the condiment industry in national newspapers and magazines, with footprints across nearly 30 provinces, municipalities, and autonomous regions in China. He has conducted thorough research on the distribution channels, distributors, new product launches, market environment, and competitive conditions of Chinese condiment and catering ingredients. His research on the sales and market of Chinese condiments and catering ingredients has provided enormous intellectual support for Chinese and foreign condiment and catering manufacturers. Mr. Chen is a contributing expert to the China Condiment Association and a contributor to media such as Sales and Market, New Food, and Sugar, Tobacco, and Wine Weekly. He also provides opinions as a marketing expert for media such as China Business News and Southern Metropolis Daily. Mr. Chen Xiaolong is the author of the world's first condiment marketing monograph, Condiment Marketing.
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