Mentioning this topic may seem absolute, and some brand marketing personnel may object, but it is indeed the case. First, propose a formula: Brand market share = Product & Brand Competitiveness × Channel Competitiveness × Consumer Competitiveness. To explain, market share is a result indicator. To improve it, one must achieve squeeze-style growth in a shrinking market, because your increment means competitors' decrement. No one will sit idly by, so involution intensifies and continues, and the items of involution gradually enrich: product brand, channel, and consumer. To increase market share, efforts must be made in the "three forces." Without product & brand competitiveness, channel partners' willingness to cooperate decreases, and product sales (specifically the link where brand sells to distributors) decline. Without channel competitiveness, product distribution capability (the link where distributors and sub-distributors sell to outlets) declines. Without consumer competitiveness, product reputation and the resulting sell-through capability (the link where outlets sell to consumers) decline. Thus, the "three forces" are the core of market share.
Marketing personnel mistakenly treat the platform as their own ability. Among brand marketing teams, there is a kind of "confidence" called mistaking the platform for ability. In the first half of the year, I visited a market in Guizhou and communicated the market research results with its provincial head. During the meeting, this head was full of confidence, expressing that under his leadership this year, the market achieved certain completion rates, year-on-year growth rates, and progress in distributor management and team management. These achievements are good, and I fully agree. Two days of research cannot cover all information, but I reminded him of one point: When visiting several core large stores (including hypermarkets and campus stores), why is it that compared with main competitors, our in-store face count, floor stacks, end caps & special displays, SKU count, display positions, and visual merchandising and scenario layouts are all weaker, yet our in-store market share leads? And our cost-effectiveness ratio is also the best? This is worth pondering. Let's use a table to calculate. Suppose a competitive force's full score is 10 points. Based on comparative scores, our total score is 200 points, so our market share is high and cost-effectiveness looks good, but these value points are not entirely created by the marketing team. Product brand competitiveness is positioned by the company headquarters. For the marketing team, product and brand tone are not decided by themselves; they can only inherit the offline communication function of product & brand. What they can operate is the visual merchandising and scenario construction that link consumers, and the terminal building of brand image around outlets. If this is not done, product brand competitiveness is unrelated to the marketing team. The core of product brand competitiveness is inheritance. Consumer competitiveness mainly reflects consumer reputation. The marketing team can only inherit promotional and experiential pull activities based on consumer acquisition, repurchase, and average order value. They can deeply influence individual consumers, but in breadth and density, they need headquarters' overall planning and fire support. The core of consumer competitiveness is inheritance. Finally, only channel competitiveness remains, which requires the marketing team to build with full effort. Most FMCG consumption is immediate (non-planned products, e.g., food and beverages: immediate demand, immediate purchase, immediate consumption; online cannot easily satisfy this), so offline channel layout is particularly important. This will not change in the next decade. This is also the value of the marketing team. The core of channel competitiveness is construction and development.
Conclusion: If your team has not changed in channel competitiveness, then most results do not belong to you. This does not deny your hard work, but you cannot mistake the platform for ability!
How to build channel competitiveness? First, study the composition of the FMCG channel chain, as shown in the figure below: The channel is the pathway from brand to consumer, with four links in total. If any link is blocked, high-speed flow cannot be achieved. Ensuring each link operates efficiently is channel competitiveness.
Channel Chain Link 1: Distributor Development. For brands, the most preferred distributor standards are only two: one is capable (ability), and the other is willing (willingness). This requires brands to establish a complete distributor capability and willingness evaluation system to select distributors with strong ability and willingness to lead regional market operations. For distributors lacking ability or willingness, empowerment and rectification are needed. So the first thing is to establish a distributor capability and willingness evaluation system. What dimensions judge distributor capability? For example: organizational structure, numerical distribution rate, capital, warehousing, logistics, etc. What dimensions judge distributor willingness? For example: business share, profitability, interaction enthusiasm with the brand, etc. The second thing is to build four models by region: heavy distributor model, support distributor model, close distributor model, and eliminate distributor model.
Heavy Distributor Model: Match distributors with strong ability and strong willingness. The distributor acts as the market leader, with core work: market outlet development, various outlet development and visits, display maintenance; market promotion plan formulation and implementation; team and shopping guide team management and assessment, etc. The brand acts as market assistant, with core work: market supervision and inspection, sell-through activity summary; brand building, company brand landing; daily morning meetings, tracking data and process advancement; market co-visits and standard training, assisting in creating model stores, etc. Next are support work such as expense model, coverage model, and inspection model. It must be emphasized that the leading operation model is not simple expense contracting, nor is it management by contracting; rather, the manufacturer and distributor each perform their own duties and maximize their own efficiency.
Support Distributor Model: Match distributors with weak ability but strong willingness. The distributor is positioned as investor and participant, while the brand team is positioned as business leader. Distributor core work: market outlet development, various outlet development and visits, display maintenance; market promotion plan formulation and implementation; team and shopping guide team management and assessment, etc. Brand core work: build systems, negotiate and establish standardized operation systems (organizational management system); build teams, help distributors with daily team management, attend morning meetings daily, track data and process advancement; conduct market co-visits and standard training, assist in creating model stores; build brand, company brand landing, etc. It must be emphasized here that the brand's regional supervisor, as the distributor's professional manager, must first possess good operational ability, not only to undertake the brand's various operational management goals and act as market operator, but also to manage the distributor's team and daily operations. Therefore, their ability, quality requirements, and job responsibilities must have implementable process systems. Market success depends on the brand supervisor's operational ability. Due to space limitations, the close distributor model and eliminate distributor model are not listed one by one.
Channel Chain Link 2: Team Building. The team here often includes three parts: first, the brand's marketing team; second, the distributor team; third, social force teams (wholesalers, sub-distributors, B2B, etc.). All three teams must be built. Only by uniting all forces that can be united can the stability of the channel chain be ensured. This is a big topic, involving FMCG manufacturer manpower allocation plans, team ownership issues, recruitment and training, salary and assessment, and other dimensions. The core is how to achieve the best market service through effective collaboration under the current situation of rising labor costs. The following points can be combined for layout:
Distributor product, channel, and benefit improvement, improving personnel efficiency in the process
Distributor team daily operation standardization, solidifying standards in the process
Brand marketing team evaluation, internal evaluation, strengthening manufacturer-distributor matching
Social forces: increase numerical distribution rate, do well in low-capacity outlet expansion and maintenance
Distributor generation 1 empowerment plan, improving distributor boss ability is the foundation for improving distributor team ability
Distributor generation 2 succession plan, second-generation succession also needs brand empowerment, doing well in the transition period
Channel Chain Link 3: Outlet Development. What is the essence of outlets? From a consumer profile perspective: outlets are the last link between FMCG channels and consumers; behind an outlet is a gathering place for a type of consumer. From a brand building perspective: outlets are windows for offline brand building; they can satisfy the body's "five senses" needs (sight, hearing, smell, taste, touch), displaying the brand and products to consumers more three-dimensionally. This cannot be achieved by any media and is an important part of brand offline layout. From a marketing perspective: outlets are important places for building consumption scenarios and are key to achieving B2B2C integration. From a promotion perspective: outlets are the end of deep distribution and the starting point of deep sell-through; the end of channel promotion and the starting point of consumer promotion. Therefore, this link needs to consider both distribution factors and purchase factors; neither is dispensable. The competition of FMCG brands in offline channels, from a certain perspective, is a contest of controllable terminals (four controllables: control sales output, control brand communication, control profit sources, control competitive landscape). The more controllable terminals a manufacturer has, the higher the theoretical sell-through. The premise of controllability is the classified operation of outlet value. As the old saying goes, crossing the shrinking era, outlets remain the foundation of manufacturers' survival.
Channel Chain Link 4: Consumer Development. The end of the channel chain is the consumer, also commonly called the user. Ten out of ten business failures occur at the consumer link. Products pass through five gates and six generals, through layers of channel barriers, to reach consumers, but if consumers do not buy, all efforts are in vain. This is a problem with consumer strategy. The core of consumer strategy is simply three points: acquisition, repurchase, and average order value. In plain language: guide consumers to buy; drive consumers to buy again, multiple habitual purchases; find ways to increase the quantity or amount of consumer purchases. Strictly speaking, these three basic actions of consumer strategy need to be done continuously, but in reality, enterprise resources are limited, so there must be a focus. Usually, I suggest first doing a market profile. Two common division dimensions are: one is annual per capita consumption of the product (annual sales divided by regional population), and the other is the competitive landscape of the regional market (can be obtained through third-party market share data or by comparing the annual sales volume or amount of the region's first competitor).
- Regions with high annual per capita and strong competitiveness: brand awareness is high, product circulation is not a big problem, so the core of consumer strategy is to focus expenses on increasing consumer average order value.
- Regions with high annual per capita and weak competitiveness: the brand has some awareness but is suppressed by competitors, meaning users prioritize competitors when choosing similar products. The core of consumer strategy is to focus resources on consumer repurchase actions.
- Regions with low annual per capita and strong competitiveness: brand awareness is high, but category awareness is low, meaning consumers do not know much about the category, but as long as they know the category, they will buy your product. The core of consumer strategy is to focus resources on acquisition actions.
- Regions with low annual per capita and low competitiveness: there is category awareness, but brand awareness is low, not the first choice for consumers. The core of consumer strategy is to focus resources on finding a small group of target customers and do acquisition, repurchase, and average order value work for their consumption scenarios, with the goal of first cultivating a small group of loyal customers.
Finally, it must be emphasized: Designing a good consumer strategy is a key step to successfully occupy consumer minds, with the purpose of stimulating consumer purchase desire and establishing a virtuous cycle of sell-through logic. This is also the core of consumer development.
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