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Any competent regional manager knows that "the key to market success lies in resource integration," and also understands that "you can't make bricks without straw." Business is like warfare, where the principle is "know yourself and know your enemy, and you will never be defeated." The same applies to regional managers. To "know yourself," a regional manager must clearly understand what resources they have at their disposal, especially how much budget the company has allocated. Market expenses are the true core resource for a regional manager!
A regional manager's market resources can be broadly divided into the following categories: brand resources, human resources, customer resources, distribution channel resources, and terminal resources.
Whether it's team building and recruitment, brand promotion, image materials, customer relationship maintenance, channel development and promotion, terminal promotions, or display enhancement—all of these require money! These are all market expenses!
Where do market expenses come from? Do you rely on planning and so-called "bullshit" proposals to beg the boss for money all day? The boss won't give it to you!
Market expenses are earned by yourself!
Some friends might say, "Earned by myself? If the boss doesn't give me expenses, how can I make money for him? Which comes first, the chicken or the egg?"
Any boss understands this logic. In the early stages, the boss provides startup capital, but once the market is activated, they typically give the regional manager a percentage of the collected payments as market expenses—i.e., a certain percentage of the recovered funds. At the same time, the regional manager is assessed on both sales targets and expense ratios. Even if some companies don't disclose the exact amount of market expenses available, the marketing department certainly has a budget for input-output. A smart regional manager can sense the company's expense ratio bottom line.
What is a regional manager for?
A regional manager is essentially a "hen that lays eggs"! The relationship between a regional manager's performance and market expenses is like: chicken lays eggs → eggs hatch chickens → chickens lay eggs → eggs hatch chickens...!
Expenses are the eggs, and performance is the chicken! If a regional manager cannot plan and use their expense resources to create higher performance, then that regional manager is a "chicken that doesn't hatch eggs," and the boss will "kill the chicken to get the eggs"!
Three major reasons why a "chicken that doesn't hatch eggs" fails:
1. Entrusting the eggs to a cat to hatch!
Example: Many regional managers feel that applying for market expenses is too troublesome, so they simply hand over the bare price to the distributor to operate.
There is no cat that doesn't like fish, and no distributor that doesn't know how to squeeze money from manufacturers.
When the bare price is given to the distributor, the distributor feels it's their deserved profit and thinks the manufacturer still has plenty of expense room (according to the distributor's creed: profits are limited, but manufacturer expenses are unlimited!). They continue to ask the regional manager for more expenses. Not only does the regional manager lack expense resources to leverage the distributor's resources, but they are also overwhelmed by a flood of expense requests from the distributor.
2. Incorrect hatching methods.
A. Not understanding "analysis": no data
What is performance reflected by? Data! But I've seen many regional managers who "don't have a clue"!
Some regional managers who have worked in a regional market for years—ask them: "How many KA/B/C supermarkets, convenience stores, secondary distributors, and township second-tier distributors are your products distributed in? What's your product distribution rate? Market share? Which is the golden SKU?" Many regional managers would have to count on their fingers, and still might not be able to answer!
Do you have detailed terminal information? Do you regularly update customer data? Have you organized terminal data by logic such as flagship stores, key stores, ordinary stores, problem stores, pending development stores, or by store sales/scale?
Ask these regional managers again: "What are your display standards for various terminal stores? How many SKUs on average per store? Which of your market expense plans are for channel promotion? Which are for consumer promotions? If all market expenses are intercepted by distributors, how will your products move? How many stores in your market currently sell over 50,000 per month? How many over 10,000? How many over 5,000? How many over 1,000? What's your next step to develop and build key stores to drive the market?"
I dare not ask further; some regional managers would start crying—"Oh my god, doing market work is so troublesome, can't you let people live? Do you want to exhaust us?"
Some regional managers would get angry—"Stop bullshitting here! I just need to handle the distributor, get the money back to the company, and that's it! Why so much hassle? Can't I drink, play cards, sleep, go to bars, or find women?"
B. Lazy "know your enemy": no direction
How are competitors performing in the local market? What market share do they each hold? Manufacturer XX is planning an ordering meeting to collect money—what's their ordering plan? Manufacturer XX is strengthening distribution and store displays—what are their distribution policies, display standards, reward and punishment measures, and promotion expenses? Manufacturer XX is running terminal promotions—what's the promotion format, which product is the focus, what's the special price, what are the gifts, how many promoters are hired, which terminal resources are secured, and does it threaten your brand's sales?
C. No "innovation": destined to fail
What plans and strategies do you have to compete with competitors? Are you just copying the promotion plan from ten years ago?
Huazi is a regional manager for a group. His client in a provincial capital market also represents a major competitor. Huazi's brand sales lag far behind the competitor. Huazi asked me for help! I only chatted with Huazi for 5 minutes and knew why his market wasn't performing!
Why? Because the distributor only has 5 salespeople, all provided by the competitor. Huazi's company has no salespeople locally to assist the distributor in developing the market. Huazi's products are distributed and maintained by the competitor's salespeople at the distributor's request.
No stupid regional manager would allow their people to work for a competitor. Under pressure from the distributor, the competitor's regional manager "complies in appearance but opposes in heart." They only place products in stores with no sales or poor payment records, and avoid good supermarkets! As the competitor's regional manager said, "If it falls on me, I'll play you to death!"
I asked Huazi why he didn't hire two salespeople locally to develop the market. Huazi said there were no expenses!
Where did your market expenses go?
Huazi said, "Market expenses were all given away as buy-10-get-1 or buy-5-get-1 promotions! I have no expenses left!"
I asked, "For the purchase gifts, who did the expenses go to?"
Huazi said, "This has been our company's channel promotion policy all along! This way, the client's profit is higher, so they're willing to sell!"
I said, "Channel promotion? Bullshit channel promotion! The policy all goes into the distributor's pocket. Can the distributor represent the channel? Did the distributor pass on the policy benefits to sub-distributors or second-tier distributors? Did they hire dedicated salespeople for your brand? There isn't even a single case of your product on the distributor's delivery truck for rural distribution! Your gifts only increase the client's profit; few clients will take money out of their own pockets to do market work for the manufacturer! Even if the client passes the gift policy down to sub-distributors or second-tier distributors, it only increases short-term order volume. But did your distribution rate improve? How many SKUs are on the shelves? What about product display? Are there any consumer promotions? If consumers don't buy, will the distributor use the products themselves or return them to you?"
Huazi stammered, "But our company has had this promotion policy for over ten years!"
I said, "The circulation market is shifting towards terminal-oriented distribution. If you still cling to the model from ten years ago—then you're waiting to die!"
It's like Huazi is a hydropower station director who opens the floodgates at the end of the month (payment collection), and the water flows wherever it wants! Maybe it accidentally floods the farmland. The competitor's regional manager is like a water company manager who lays pipes to every household, installs a water meter in each customer's home, and regularly sends people to read the meters.
3. Embezzlement.
I won't say much about this; Hu Fengchun's article "How Salespeople Use Marketing Black Holes to Become Millionaires" covers it well!
How should a regional manager reasonably allocate and use market expenses?
- Understand the market expenses generated by the current marketing model and plan allocation reasonably.
Example: For daily chemical companies with terminal marketing models, the following categories of expenses generally arise:
(Note: This table is based on actual data from several KA-channel daily chemical leading brands' market expense allocation and usage. It may not be universally applicable and is for reference only for regional managers in the daily chemical industry.)
- Adopt different expense allocation models based on the brand's development stage, spending money where it counts!
For example, during the new product introduction stage, channel promotion expenses or entry fees are key; during the growth stage, deep distribution or seizing terminal resources is key; during the maturity stage, public relations and terminal promotions are the focus to extend the product life cycle.
- Use limited market expenses as a lever, with creative market plans as the fulcrum—to leverage and integrate more market resources!
For example, the manufacturer launches a promotional set: 1000ml shampoo with 1000ml body wash. For consumers, it's great value; for shopping malls, it attracts foot traffic; for distributors, it boosts volume!
The regional manager knows this set has the potential to create new sales records, but just placing it on the shelf for natural sales won't yield ideal results. However, they have little expense left. What to do?
So the regional manager first approaches the buyer of a dominant local supermarket chain and says, "To give back to consumers and repay XX Supermarket's strong support, our company is launching an exclusive value set for your chain during XX-XX period, plus shopping lottery surprises. To attract even more foot traffic, we're also offering a 5% discount on the supply price. We hope your supermarket will strongly support us to break your chain's shampoo sales record!"
The buyer is thrilled to hear about such a big promotion exclusive to their supermarket. After bargaining, the buyer agrees to feature it on the flyer for free, provide a free display or end-cap at each of the 100+ stores, and offer a 10% discount for a special price.
With the buyer's commitment, the regional manager then approaches the distributor and says, "XX chain is very interested in our new set. They're not only featuring it on the flyer for free and offering a 10% discount, but also providing a free floor display or end-cap at each store, and guaranteeing retail sales over 1.5 million this month." The distributor is thrilled and says, "Great! I'll place an order for 1 million worth of goods right now. Don't leave tonight—I've got some friends coming over for seafood and beer."
The regional manager sees the distributor's enthusiasm is ignited and adds, "The supermarket requires a 5% discount and a lottery to attract foot traffic. I've already exceeded my expense budget this month for the set and hiring promoters. What about the discount and prizes? If I ask the company for more expenses, the boss will scold me!"
The distributor hesitates briefly, then slaps their chest and says, "Leave it to me!"
The regional manager used just one set and one plan to maximize the distributor and terminal resources! So regional managers must use "four ounces to move a thousand pounds" when investing expenses!
As Archimedes said, "Give me a lever long enough and a fulcrum on which to place it, and I shall move the world."
What we need to think about is: "Where is my fulcrum?"