Rural areas—vast opportunities await! By: Unique Consulting, Wang Weishe While the industry focuses on supply-side reform and urban marketing innovation, we should not overlook the long-standing and unresolved issue of marketing focus sinking in rural markets. After all, China's rural market still holds half of the sales share. For many mid-to-low-end brands, rural areas are the foundational market for survival. It is essential to face reality and invest effort in researching and solving the challenge of sinking marketing focus in rural markets. Why can't marketing focus sink to villages? The awkward status quo of sinking. Many manufacturers recognize the importance and urgency of sinking focus to villages, even requiring county-level distributors to establish sinking systems. County-level agents, though based in county towns, have small sales volumes and hope to increase volume by tapping into village markets, but they are slow to take action, only making trips when manufacturers inspect or push them. As a result, in the current village market, apart from a few low-end brands like Lao Cunzhang and Niu Er, and local brands, other brands are almost nowhere to be found. Reasons for not sinking. First, county-level distributors lack motivation. Because village-level products are positioned as low-end, and with the three-tier channel distribution (county, township, village), profits are too small, so they are unwilling to sink. Second, village markets are too small. A county distributor might sell only a few boxes per trip, and after deducting labor and vehicle costs, it's not worth it. Third, overlapping sinking between county and township levels creates constraints. County distributors need township agents to cooperate for each village activity; if county distributors go directly to villages, it infringes on township agents' interests and causes conflicts. What are the pain points of sinking? First, population migration leads to sales decline. Many 70/80/90s consumers go out to work, while the wealthy 50/60/70s move to cities and county towns, meaning that despite a seemingly large consumer base, 50% are not in villages. Second, sinking costs are too high. The massive expenses for personnel, vehicles, and network construction are unsustainable if fully borne by manufacturers; agents already have thin margins and cannot share the burden. Third, competition in the low-end market is even more brutal. Low entry barriers mean many competitors, and low product margins require heavy promotion, while raising prices would lose competitiveness. What are the countermeasures to solve channel sinking efficiency? Establish county-township parallel agency to improve channel efficiency. Given county distributors' inability to sink and the opportunity to open new channels, establish a county-township parallel agency model: allocate county network, county e-commerce, and cross-border channels to county distributors, and allocate village networks and professional cooperative channels to township distributors. To ensure a smooth transition from three-tier to two-tier structure, provide county distributors with moderate incentive policies for township market growth and special early support for cross-border channel development. To motivate township distributors, adopt policies to lower purchase prices and minimum order quantities, and set incremental incentive policies. To simplify account management, open a shared account at the county level, with manufacturers keeping separate records for county and township agents. Open cross-border channels to reduce sinking costs. Choose partners with rural channel advantages, such as agricultural postal services, tobacco, and supply and marketing cooperatives, to establish cross-border cooperation. Build an operating system where manufacturers lead cross-border strategic cooperation, manufacturers prioritize investment in launch policies, county distributors handle supply and after-sales service, and the external party directly supplies village networks. Implement measures such as establishing a cross-border joint meeting system, embedding advertisements in alcohol packaging and logistics carriers, cross-selling related products, and terminal store performance rewards. If network coverage is the primary goal, prioritize agricultural postal channels; if terminal sell-through is the main goal, prioritize tobacco channels; if horizontal expansion is the primary goal, prioritize supply and marketing cooperative channels. Leverage e-commerce channels to target professional large households. Innovation in agricultural industrial structure and business models has spawned many professional cooperatives and large households, who not only have strong purchasing power but are also internet users. Therefore, on one hand, cooperate with local e-commerce platforms focused on agricultural products entering cities, using platform customer information for precision marketing, while alcohol companies provide platform parties with county-level product packaging advertising as compensation. On the other hand, cooperate with regional e-commerce platforms focused on industrial goods going to villages, targeting customers' needs for holiday gifts, cultural tourism, and household daily use, using mixed promotions of alcohol and related categories. Both methods require a membership marketing model and offer personalized customization services to increase stickiness with professional large households. What are the countermeasures to solve market sinking sales issues? Capture concentrated consumption to compensate for population outflow losses. Focus on two major consumption opportunities: Spring Festival and weddings. Because no matter where people go for work, they return home for Spring Festival and weddings. Therefore, for Spring Festival reunion dinners, cooperate with village committees to launch a "Hometown Love, Reunion Dinner, Thousand Villages Ten Thousand Households Fine Wine Pre-order" activity, and ensure implementation through sponsoring village committee alcohol and pre-order preferential policies. For wedding banquets, cooperate with wedding companies or village wedding coordinators to launch a "Wine as Witness to Love Exclusive Pre-order Activity," ensuring implementation through partner rebates, consumer discounts, and packaging customization policies. Remove packaging for low-end products to improve cost-effectiveness and increase sales. Given the excess packaging value and low face-consumption demand for low-end products, fully utilize the product's market maturity and the price benchmark of the same product with packaging, quickly remove packaging and appropriately reduce retail prices. To maintain retail price competitiveness, reasonably allocate the profit space after removing packaging. Manufacturers should not participate in the distribution of saved packaging costs but instead exchange for benefits through increased sales. Allocate 20% of saved costs to county and township agents and 80% to retailers, striving to reduce retail prices by 1-3 yuan per bottle for products priced 18-38 yuan. Conduct on-site cross-promotions to tap potential and intercept customers. On-site cross-promotion means using distributors' connections and business credibility to conduct cross-promotions with local restaurants, food, beverage, meat, non-staple food, pastry, and other food-related stores. Tapping potential and intercepting customers means exploring related consumption through cross-promotion value and achieving customer interception through out-of-industry channel cooperation. Main methods: First, set up vouchers for alcohol products; consumers can use them to offset cash at designated stores. This requires alcohol distributors to have high credibility and pledge a small amount of products to designated stores as a guarantee. Second, set up universal vouchers; consumers can use them to offset cash at all participating stores in the joint promotion, provided they sign an agreement and pay a certain deposit to the organizing party. Both methods require timely verification and settlement of deposits or pledged products with stores redeeming vouchers. -END- ****Click image to read directly FMCG Industry's Most Professional Practical Knowledge Base [ Reply with yellow numbers in the background to view keywords below ] | 001 Excellent Article Selection | 002 Distributor Market Operations | 003 Terminal Visit Management | 004 Sales Supervisor Skills | 005 Sales Improvement Techniques | 006 Channel Expansion | 007 Managing Distributors | 008 Distributor Development | 009 Distributor Internal Operations Management | 010 Team Management | 011 Efficient Distribution Techniques | 012 Sales Manager's 18 Skills | 013 KA Operation Methods and Strategies | 014 First Lesson for New Salespeople | 015 Internet, Brand | 016 Distributor B2B Transformation |