The Secret Weapon That Established Master Kong's Market Position

Twenty years ago, almost no one had heard of Master Kong; ten years ago, many had; now, everyone knows it. Since investing in mainland China in September 1988, Master Kong has achieved impressive results through over 20 years of relentless effort: its instant noodles hold the largest market share nationally, its tea beverages lead the market, its mineral water gained the top market share in 2009, and its juices ranked third nationally, with total sales reaching 50 billion RMB in 2009. What is the secret to these achievements? Some say it's the product, others point to advanced equipment, a high-quality management team, or an impeccable management system. I believe the secret weapon that established Master Kong's market position is primarily its comprehensive set of marketing methods. It is through these methods that Master Kong has created one miracle after another. Master Kong's marketing methods can be summarized into three fundamental approaches: channel intensive cultivation, category and item management, and brand communication. Among these, channel intensive cultivation is the most important, serving as a sharp sword for the success and brilliance of Master Kong's food business. Master Kong began implementing channel intensive cultivation in 1998, continuously evolving with market development stages. Through relentless effort, by the end of December 2008, it had 552 sales offices and 84 warehouses nationwide, serving 5,872 distributors and 69,096 direct retail stores, covering 970,000 retail outlets. With such a powerful sales platform, channel intensive cultivation will play an increasingly strong role, supporting its rise as China's food kingdom. "Channel intensive cultivation" is not Master Kong's patent; it was originally developed by the renowned American consulting firm McKinsey & Company. Ting Hsin International Group acquired the rights to use "channel intensive cultivation" from McKinsey at a high price in 1998. During its implementation, Master Kong gradually developed a channel intensive cultivation operating system and methods suited to its own needs, achieving tremendous success in its instant noodle and beverage markets. Definition of Channel Intensive Cultivation Channel intensive cultivation refers to the process management of channel customers (distributors, secondary wholesalers, retail terminals). By dividing target market areas and setting corresponding channel operating models, it ensures that key sales points in the channel receive visits and professional service and management with designated personnel, designated areas, designated routes, designated points, designated frequency, and designated times. This achieves comprehensive control over channel customers, improves product coverage in the channel, and ultimately makes the company the master of the channel. The goal is to achieve "my territory, my rules." Designated Personnel: This means that for a specific area and route, responsibility is assigned to a specific person; that salesperson is the operator of that area and cannot be changed arbitrarily. In special cases such as leave, a backup person will assist. Designated Area: The area is fixed, and the customers covered are relatively fixed. The area map needs to be delineated to avoid ambiguous zones, overlapping management, or unattended blank areas. Designated Routes: Within the fixed area, six routes are defined, corresponding to Monday through Saturday. Customer classification should be included, with visit frequency set, arranging routes based on visiting 40 outlets per day. Designated Points: Sales personnel are required to arrange the order of customer visits for convenience, mark the visit sequence number, and then schedule weekly and daily visits based on the set visit frequency, ensuring that daily visits are fixed. Designated Frequency: Based on customer classification and other factors, set the visit frequency for each customer, ensuring the required number of visits per month for each point. Designated Time: According to the principles of designated routes, points, and frequency, the arrival time at each point should be within a relatively fixed time range under normal circumstances. In summary, the purpose of the "six designations" is to establish service commitments with customers, facilitate relationship building, comprehensively control the channel, and become the master of the channel. Why implement channel intensive cultivation? As competition intensifies, channel control capability plays a decisive role in sales growth. The drawbacks of the original marketing model have constrained rapid enterprise development. The drawbacks are as follows:

Too many channel layers, overly long channels, too many intermediate links for distributors, and outdated "sit-and-wait" wholesale operations lead to low sales efficiency, delaying product arrival to consumers, and increasing distribution costs and product prices.
Market price chaos, difficulty in controlling market prices, leading to low channel profits and frequent cross-region dumping.
Increased difficulty in new product promotion.
Low distribution efficiency; difficulty in increasing distribution coverage.
Occasional product stagnation in the channel.
Low channel customer loyalty, making it difficult for companies to control channel customers. With increasingly fierce market competition, the original channel operation methods cannot better adapt to market demands or drive rapid enterprise development. The purposes of channel intensive cultivation:
Comprehensive control of the channel, shortening channel levels, and becoming the master of the channel.
Expanding market coverage, establishing channel advantages in points, lines, and areas.
Strengthening customer service and accelerating product turnover.
Increasing product distribution efficiency and creating reasonable channel profits.
Stabilizing price systems and reducing dumping.
Timely access to market information, enhancing communication and service.
Perfecting the marketing mix to ensure successful rapid distribution of new products. Ultimately, shorten the channel and control the end. Targets of Channel Intensive Cultivation:
General distribution channels (wholesale and retail);
Direct-operated channels (K/A).
Closed channels (stations, factories, prisons, schools, etc.). The goal is to fully direct-operate second-tier in urban areas, and fully control second-tier downstream of third-tier in regional areas. Fight for consumers. Channel intensive cultivation operating models. Based on channel form differences, channel intensive cultivation is divided into urban intensive cultivation and suburban/outlying intensive cultivation. Urban intensive cultivation operating model: fully direct-operate second-tier, and first-tier A and B customers. Master the 2:8 rule, serving better A and B customers. Suburban/outlying operating model: suburbs directly operate second-tier. Outlying areas directly manage third-tier, controlling downstream second-tier customers. Content of channel intensive cultivation: The core content is quantitative management of retail terminals and related channels, strengthening service, compressing channel levels, and improving product coverage and distribution efficiency. Specifically includes:
City classification: Determine the city's level based on population, annual per capita consumption, and per capita GDP.
Area division: Based on city size and market concentration, divide areas into core urban areas, intensive cultivation cities, suburban areas, and outlying areas, to operate according to different channel operating models.
Channel survey: Organize personnel to conduct a comprehensive inventory of all food sales points in urban and outlying areas, and register them.
Setting operating methods: Based on city classification, set channel operating models for core urban areas, intensive cultivation cities, suburban areas, and outlying areas.
Personnel deployment: Based on the number of retail terminals or wholesalers and development plans, allocate sales personnel proportionally.
Quantitative visit routes: The number of retail terminals or wholesalers that sales personnel must visit daily must meet company standards; they must complete tasks according to company-specified visit frequency and complete company-specified work content.
Quantitative work content: According to the designated work routes, visit each customer following the standard eight-step visit procedure.
Quantitative visit frequency: Determine visit frequency based on customer level, ensuring key customers receive key services, making personnel and time usage more effective.
Timely order transfer and delivery: According to the product variety, quantity, and time required by the order, the distributor ensures delivery is completed.
Channel customer management: Divided into terminal customer management, wholesale customer management, and distributor customer selection and management.
Methods to improve sales performance: Increase distribution items and coverage to accelerate product turnover.
Sales organization operation and personnel management, etc. Stages of channel intensive cultivation development: Master Kong began implementing channel intensive cultivation in July 1998, roughly going through the following stages. Stage 1: Before July 1998: Large distributor system. Stage 2: July 1998 – September 1999: Comprehensive channel intensive cultivation. Stage 3: November 1999 – December 2006: Efficient channel intensive cultivation. Stage 4: January 2007 – present: Refined channel intensive cultivation. The so-called large distributor system: Sales representatives directly manage regional distributors. The company directly supplies goods to distributors, not responsible for first- and second-tier management. Before 1998, products were basically in short supply, distributors had high profits, strong willingness to operate, and high enthusiasm. This model saved personnel and transportation costs. However, its drawbacks were obvious. First, market fate was controlled by some third-tier customers (distributors), giving the company extremely low market control, and sales could fluctuate dramatically. Second, distributors were only willing to sell best-selling products, not to assist in promoting new products or full-item sales. Comprehensive channel intensive cultivation stage: Factory sales personnel not only manage distributors but also manage first- and second-tier customers. Based on channel forms, they set up postman, mailbox, and stall management. In this stage, the difference between urban and suburban areas is that suburbs do not serve first-tier customers. Channel intensive cultivation is divided into: intensive urban areas, suburban areas, and outlying areas.
Channel intensive cultivation organizational structure chart
98.7–99.9 intensive urban operating model: Intensive urban areas: Sales representatives fully manage direct-operated second-tier customers. Assistant sales representatives serve first-tier customers. Advantages: Comprehensive channel control, easier new product promotion, full-item sales; shortened channels, increased profits; faster product delivery to consumers, quality assurance; reduced bad inventory in the channel.
98.7–99.9 suburban area operating model: Suburban areas refer to areas between intensive urban and outlying areas. The company directly operates second-tier, with sales representatives directly taking orders and managing. No first-tier service; first-tier is served by second-tier.
98.7–99.9 outlying area operating model: The outlying area operating model is the large distributor system before 1998. Sales representatives directly manage third-tier customers, not serving second-tier or first-tier.
Explanation of special terms in channel intensive cultivation Third-tier distributors: Distributors who directly wholesale to wholesalers, who then directly supply retail points. Second-tier distributors: Distributors who directly supply retail points. Borrowing shell: The company directly controls downstream customers, using the upstream distributor's warehousing and distribution functions to proactively control the end (downstream) customers. Second-and-a-half tier: If retail behavior in a wholesale market exceeds 50% of sales, one distributor can be entrusted among the stalls to control supply and pricing. Semi-direct operation: Sales representatives manage second-tier distributors, while assistant sales representatives control the retail points they cover. Postman: Second-tier distributors with distribution capability who deliver to the door (mobile wholesalers). Mailbox: Second-tier distributors who cannot deliver to retail stores (sit-down wholesalers). Stall: Wholesale stalls in wholesale markets. K/A (Key Account): Key customers in the end channel (supermarkets, hypermarkets, etc.). Closed channels: Stations, factories, internet cafes, prisons, schools, etc.
Profit distribution among channel levels. To stabilize channel prices and ensure channel customer profits, the company set up a channel price system. Example: A box of braised beef noodles: third-tier customers purchase from the factory at 24.5 yuan, sell to second-tier at 24.5 yuan, but the company rebates 0.4 yuan per box; second-tier customers purchase from the factory or distributor at 24.5 yuan/box, sell to first-tier at 25 yuan/box, with a single-box profit of 0.5 yuan/box. Borrowing-shell distributors and 2.5-tier distributors purchase from the factory at 24.5 yuan/box, sell to second-tier at 24.5 yuan, but the company rebates 0.2 yuan/box. Under this price system, all channel levels operate smoothly without conflict. November 1999 – December 2006: Efficient channel intensive cultivation
Structure chart The difference between efficient and comprehensive channel intensive cultivation is that wholesale markets and mailboxes are delivered by logistics distributors, while postman distributors handle first-tier delivery. The difference between suburbs and outlying areas is that suburbs directly serve second-tier.
99.11–06.12 intensive urban operating model: Sales representatives directly manage logistics and postman distributors, controlling downstream second-tier customers. Assistant sales representatives serve first-tier customers. Advantages: A. Simplified management. B. Easy channel control. C. Easy new product promotion. D. Faster channel delivery. E. Lower costs. Disadvantages: Due to profit impact, establishing and stabilizing logistics and postman distributors is difficult.
99.11–06.12 suburban area operating model: Suburban areas refer to areas between intensive urban and outlying areas. The company directly operates second-tier, with sales representatives directly taking orders and managing. No first-tier service; first-tier is served by second-tier.
99.11–06.12 outlying area operating model: Operating model: The outlying area operating model assists third-tier customers in managing 2.5-tier distributors and downstream second-tier and first-tier situations. This model improves third-tier customers' ability to serve distant township second-tier customers where delivery was previously unprofitable or low-profit. January 2007 – Present: Refined channel intensive cultivation With accelerated urbanization, the rise of large supermarkets, the decline of urban wholesale markets, and the transformation of wholesale market wholesalers, to strengthen channel control, the transformation of channel intensive cultivation is imperative.
Core urban area refined channel intensive cultivation operating model In core urban areas, fully cover profitable terminals, directly operate second-tier, and subdivide the channel. Direct-operated customers are delivered by the company's logistics distributor, Dingtong; distribution channels are delivered by DC (Distribution Centre), which only delivers to secondary wholesalers; both Dingtong and DC purchase directly from the factory; DC customers are visited and orders transferred by team leaders, wholesale customers by sales representatives, and first-tier customers by assistant sales representatives.
Urban/city distributor operating model In intensive urban areas, effectively cover retail terminals/second-tier customers, subdivide the channel, and improve cultivation efficiency. Direct-operated customers are delivered by the company's logistics distributor, Dingtong; distribution channels are delivered by urban/city distributors, who only deliver to wholesale customers; both Dingtong and urban/city distributors purchase directly from the factory; urban/city distributors are visited and orders transferred by team leaders, wholesale customers by sales representatives, and first-tier customers by assistant sales representatives; CC-class customers are covered by wholesale radiation.
Suburban/outlying channel construction diagram – Suburban/outlying A1 operating model Explanation: 1) Suburban/outlying A1 controls valuable terminals in county towns, with dedicated vehicles for 2±0.5 tier distribution. Suburban/outlying A1 distributors deliver to county wholesale customers and township 2±0.5 tier customers; they purchase directly from the factory; all county wholesale customers and township 2±0.5 tier customers are visited and orders transferred by wholesale sales representatives or resident sales representatives; county first-tier customers are visited by suburban assistant sales representatives; CC-class customers are covered by wholesale radiation or vehicle sales.
Suburban/outlying channel construction diagram – Suburban/outlying A operating model Suburban/outlying A operating model requires controlling terminals with brand display value in county towns (KA/MA), with dedicated vehicles for 2±0.5 tier distribution; suburban/outlying A distributors deliver to county wholesale customers and township 2±0.5 tier customers; they purchase directly from the factory; all county wholesale customers and township 2±0.5 tier customers are visited and orders transferred by resident sales representatives; township first-tier customers are covered by wholesale radiation or vehicle sales.
Suburban/outlying channel construction diagram – Suburban/outlying B operating model Suburban/outlying B operating model requires controlling terminals with brand display value in county towns (KA/MA), following customer vehicles for distribution; suburban/outlying B distributors deliver to county wholesale customers and township 2±0.5 tier customers; they purchase directly from the factory; all county wholesale customers and township 2±0.5 tier customers are covered by resident sales representatives through customer vehicle sales.
Outlying C channel construction diagram – Outlying C operating model The outlying C operating model involves doing business through third-tier customers, assisting customers in building channel advantages, with guidance > service; outlying C distributors are visited and guided by outlying sales representatives, one outlying sales representative serving several county outlying C distributors, only controlling important secondary wholesale customers in county towns; outlying C distributors purchase directly from the factory. Marketing is an era of exceptional competition, where market changes are everywhere, consumer behavior changes constantly, and marketing networks built on market changes are continuously refined. Therefore, the success of product sales depends on the ability of channel operating models to constantly evolve! Enterprise development depends on the number and quality of outlets, ultimately on outlet quality. When channels transform from public resources to monopoly resources, it's hard for enterprises not to develop! Reply with the following keywords to categorize and read related professional articles: Sales Supervisor, Second-tier Management, Regional Manager, Distributor Management, New Channels, City Manager, Competition, 2015, Manufacturer-Dealer Game, Product Stagnation, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Channel Promotion, Sales Misconceptions, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Closing Orders, Market Visit Inspection, Baijiu, Beer, Sales Growth, Agency Products, Cross-region Dumping, KA, Terminal Merchandising, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, Sales Novice, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Franchise Recruitment, New Media, Distributor Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Stock Pressure, Holidays, Distributor Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Order Meeting, Team Management, Training, Work Report, Work Report.