---
title: "Organizational Strategy Without Implementation Makes Stable Operations an Empty Talk!"
description: "Performance appraisal guides salary and benefits, which in turn determine organizational stability. This article discusses organizational strategy for marketing teams in the FMCG industry, covering manpower allocation, team ownership, recruitment and training, and compensation and assessment, with a focus on optimizing market service through effective collaboration amid rising labor costs."
author: "高级研究员 海游"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2022-12-10"
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# Organizational Strategy Without Implementation Makes Stable Operations an Empty Talk!

> Performance appraisal guides salary and benefits, which in turn determine organizational stability. This article discusses organizational strategy for marketing teams in the FMCG industry, covering manpower allocation, team ownership, recruitment and training, and compensation and assessment, with a focus on optimizing market service through effective collaboration amid rising labor costs.

**Introduction: Performance appraisal guides salary and benefits, which determine organizational stability.**
Enterprise organizational strategy is a broad topic. Today, I will share the organizational strategy for marketing teams, which involves several dimensions: manpower allocation for FMCG manufacturers and distributors, team ownership, recruitment and training, and compensation and assessment. The core of this sharing is how to achieve the best market service through effective collaboration in the current context of rising labor costs. How to precisely allocate team size? In simple terms, this is the issue of market staffing. Many companies place this work solely in the human resources department's manpower planning section, which I believe is unscientific. First, today's labor costs are incomparable to those of ten years ago. Second, with channel diversification and intense competition, most FMCG companies' profits are severely compressed, making it impossible to meet the labor needs of a labor-intensive industry. Therefore, manufacturers and distributors need to share the responsibility and management. So, how to plan most precisely? I suggest planning from the following four aspects:

1. **From a financial perspective:** Many companies do this: they calculate based on the product profit structure and cost input dimensions to derive per capita productivity cost, then calculate staffing based on regional annual sales, and finally the marketing team makes fine adjustments according to needs. A common practice is to allocate one salesperson for every certain amount of per capita productivity (e.g., in ten-thousands of yuan). A reminder here: per capita output should not be a one-size-fits-all approach. Many companies have significant regional differences in product sales structure, so profits should be calculated based on product sales structure to derive per capita productivity, and this needs to be segmented according to market sales conditions.

2. **From the perspective of market service coverage:** Does the number of personnel calculated from the financial perspective match market demand? Of course not; it also needs to be considered from the market perspective. Service coverage first requires outlet calculation. Companies should calculate the average outlet demand needed to achieve sales based on their current situation, then establish the relationship between population and outlet numbers for each region based on per capita annual consumption, and finally make staffing calculations. For example: a region with a population of 1 million, with an estimated outlet density of 1,000 people per outlet, results in 1,000 outlets. If one person can visit a maximum of 150 outlets based on frequency requirements, then 1,000/150 = 6-7 staff are needed. It must be emphasized here that different regions have different outlet coverage requirements, visit frequencies, and service outlet numbers per person, all of which require research before conclusions are drawn—not decisions made on a whim.

3. **Matching finance and service:** This leads to four scenarios. a. Finance satisfied, service satisfied—this is the optimal configuration, but beware of human resource waste; b. Finance satisfied, service not satisfied—in this case, it is best for the company to supplement personnel; c. Finance not satisfied, service satisfied—in this case, distributors need to recruit personnel and negotiate the sharing of labor costs; d. Neither satisfied—in this case, the market foundation is weak, so focus manpower on key regions, channels, and outlets for breakthroughs.

4. **Salary structure and bearing unit:** Grassroots personnel include salespeople and supervisors. When the company's finances are sufficient, the company should bear all costs to better control the terminal. When finances are insufficient, a joint sales team should be established, with shared management and cost bearing between manufacturer and distributor. How to share most appropriately? Many companies use a one-size-fits-all approach, either bearing base salary or performance pay, which I think is unscientific. The value of base salary is time buyout, performance pay is ability buyout, commission is motivation enhancement, and year-end bonus is team stability. The biggest difference between manufacturer and distributor management is time and space: distributors are with the grassroots, while companies need remote command. Therefore, I suggest that in strong regions, companies bear base salary + partial commission + partial year-end bonus; in weak regions, companies bear performance pay + partial commission + partial year-end bonus, which is more conducive to management. It must be emphasized here that whether it is company salespeople or distributor joint salespeople, the work is the same, the assessment is the same, and social insurance is the same; only the company issuing the salary differs. Otherwise, management difficulty will increase later.

**Establishing the regional market organizational structure chart**
Why establish a regional market organizational structure? Many companies tend to overlook this, or only verbally promote it. This needs to be refined. Manufacturer and distributor services need a system, and the organizational structure cannot be missing. In regional market service organizations, the most common roles are: salesperson, supervisor, warehouse & inventory keeper, finance, vehicle & driver, and clerk. These personnel form the market service team; missing one directly leads to an incomplete service chain. For example, if a clerk is missing, information transmission is hindered; if finance is missing, account reconciliation and expense verification between manufacturer and distributor are delayed. The regional organizational structure should have standards and not be makeshift. For example: when annual sales reach a certain amount, a vehicle and driver must be configured; when annual sales reach a certain level, a warehouse of at least a certain square footage must be configured, along with a certain number of inventory keepers, etc. Once standards are confirmed, tracking and checking can be carried out. The greatest role of the market organizational structure chart is to ensure the "hardware" guarantee of market service.

**Mechanism linking business performance to sales assessment**
Sales assessment determines salary and benefits, which in turn determine organizational stability. The assessment of FMCG sales teams is slightly different from other industries, with more focus points and stronger stage-specificity, and the ultimate goal is profitable sales. But the overall logic of sales remains unchanged: without sell-through, there is no distribution; without distribution, there is no sales. For example: when a beverage company just launched, sell-through was not ideal. Based on the product's sell-through logic, the company developed a business operation scoring system, converting the logic into specific steps for incentive assessment, thereby meeting the team's salary expectations while achieving product sales. Some companies assess all team members on distribution, which is based on low product placement rates and good sell-through, and can also achieve sales growth. Of course, most companies still assess distributor payments and shipments, using shipment pressure to drive distribution and sell-through. In such cases, either the company has strong product strength or the mechanism is not sound, making other assessments impossible. In summary, the assessment mechanism determines the stability of the marketing organization. There is no absolute right or wrong; it is important to match the current situation.

So how should the salary structure be adjusted? I have three suggestions.

1. **Category leaders: 6:3:1** – 60% base salary + 30% performance assessment + 10% year-end bonus. Generally, leading brands have a say in the industry and have comprehensive systems and mechanisms in all aspects. The sales team's work is more about executing relatively tedious basic service tasks. Attitude is important, and team stability is also important, so increase the base salary and appropriately reduce the bonus portion.

2. **Category mid-tier companies: 5:4:1** – 50% base salary + 40% performance assessment + 10% year-end bonus. Generally, mid-tier companies have just carved out their own territory and have some market influence. They are eager to press forward and take the lead, urgently needing talented individuals. They hope to attract strong performers through high incentives and also use high incentives to screen talent and build their talent pipeline, so the bonus portion is heavier.

3. **Category start-up companies: 4:4:2** – 40% base salary + 40% performance assessment + 20% year-end bonus. Generally, start-up brands do not have sufficient funds. To survive, they must increase employee output, but they also need to consider recruitment pressure. So the base salary is designed to ensure employees' basic survival, while high bonuses help the company control labor costs and screen for talent that matches the company.

**Recruitment and training of organizational members**
Not only FMCG companies, but many labor-intensive enterprises have faced labor shortages during the three years of the pandemic. The more grassroots the team, the harder the recruitment and the higher the cost. I once served as a marketing vice president at a company. Through the recruitment offices of various branches, the recruitment cost per grassroots employee reached nearly 5,000 yuan, including online recruitment website fees, campus recruitment fees, and personnel office costs. This is only the cost of recruitment, not including the loss from attrition within six months. Later, we placed grassroots salesperson recruitment with distributors, and the results were vastly different. My suggestion is: recruitment for grassroots execution and management teams can be placed with distributors, just set age, education, experience, and other relevant indicators in advance, and then support with some costs. Distributors will be more diligent in recruiting because these personnel directly affect their own interests. However, training for new employees must be completed by the company. New employee training first involves conveying and understanding the company's values, related products, and systems, followed by business skills training. This is difficult for distributors to do well.

**Configuration of marketing management teams**
The above discussed the organizational strategy for grassroots marketing teams. Who implements these strategies? Of course, it cannot be done without the brand's middle management. So how should management personnel be configured? There are several dimensions to consider:

1. **Management perspective:** From the FMCG industry perspective, a middle manager can effectively manage 3-5 grassroots supervisors, and a grassroots supervisor can effectively manage 6-9 salespeople. Too few may mean management work is not fully utilized or management granularity is too fine; too many may lead to extensive management.

2. **Business perspective:** A middle manager's responsible area should be at least a region, with a relatively large business volume. Companies can set this based on business volume and workload. This requires precise positioning: whether it is a fine cultivation model or an extensive management model, the personnel configuration logic differs.

3. **Management organization setting:** A middle manager typically has assistants, which are generally divided into three types: sales administration, sales planning (also called promotion specialists), and sales operations specialists. They are gradually added based on different sales volumes: first-level offices have 3, second-level have 2, and third-level have 1. In principle, the more management organization personnel, the more refined market operations and the stronger regional competitiveness.

**Extended Reading:**
Hai You: Special contributor to New Distribution, senior researcher, practitioner of offline channel marketing, and designer of enterprise channel coverage models. He has provided channel consulting for over a dozen first-tier brands, earning a good reputation.

**If you wish to communicate with the author**


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