---
title: "Traditional Companies Want to Transform? The First Cut Should Be to Eliminate the Marketing Department!"
description: "Traditional FMCG companies are losing the ability to capture consumer demand. The traditional marketing model, which relies on high distribution and visibility, is becoming obsolete. To transform, companies must first restructure or eliminate the traditional marketing department, shifting focus to consumer-centric, flexible structures that integrate online and offline efforts."
author: "方刚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-05-08"
language: "en"
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---

# Traditional Companies Want to Transform? The First Cut Should Be to Eliminate the Marketing Department!

> Traditional FMCG companies are losing the ability to capture consumer demand. The traditional marketing model, which relies on high distribution and visibility, is becoming obsolete. To transform, companies must first restructure or eliminate the traditional marketing department, shifting focus to consumer-centric, flexible structures that integrate online and offline efforts.

I. Warning
**Traditional companies are gradually losing the ability to capture consumer demand!**
FMCG traditional marketing is basically based on the approach of being ubiquitous and convenient to purchase, such as high distribution rate + vivid display! Based on this logic, the FMCG approach we emphasize in traditional marketing is basically the path: product - distributor - terminal - consumer! In this path: demand is fixed, as long as you target the demand, follow the procedures of production organization, channel recruitment, distribution and promotion, you will eventually get good results!
Five years ago, manufacturers could just throw a product into the channel and it would sell. Today, sell-through has become a major problem... In the past, traditional distributors lived a comfortable life relying on "brand territory". As long as they had a good brand and good territory, they could make money lying down! Because in the past, demand kept rising, like a snake game, you just had to close your eyes and provide satisfaction! This satisfaction was often indirect, that is, satisfying across channels, across terminals, across sales organizations! Once user-level changes occur, the manufacturer becomes the last contact point for information. Even if they get the information, after organizational decision-making and implementation, and then through channel terminals to consumers, half a year is gone!
In terms of traditional marketing logic, the organizational structure of traditional enterprises can no longer well insight and meet consumer needs. The future company structure should be a flexible structure that stimulates core consumer groups, reflects consumer needs in products, and promotes spontaneously.
II. The Scapegoat
**Being the pig teammate for thirty years!**
1. Capacity stage
Demand was extremely strong. Enterprises only needed to solve capacity issues, focusing on scale, cost, and efficiency. This produced "double low" products (Liu Chunxiong's term: low cost, low quality), enough for subsistence products!
At this stage, the enterprise's focus was on the factory and production. There was no marketing concept, at most sales. Many enterprises subdivided departments into supply and marketing sections, with supply and sales integrated. The positions that could be subdivided were sometimes called salesmen, simply put: people handling business, mainly responsible for customer contact and account processing!
2. Channel stage
Characteristics: from big customers popular to rampant, later cutting big accounts, flattening, going to the countryside! After capacity surged, the enterprise's focus turned to sales. Customers became flood discharge pipes. Initially, provincial and prefectural big customers converted from supply and marketing systems or individual wholesalers began to block the speed of capacity discharge due to long-term disrepair or channel (execution) blockage. So from a single pipe discharge to multi-pipe dredging, to get rich, cut big accounts!
3. Terminal is king stage
After flattening, it was found that the root of the problem was not the increase in the number of distributors or density, but the coverage and dominance of terminals. Thus, the manufacturer-led deep distribution stage emerged, with vigorous campaign-style introduction of deep distribution systems!
4. Consumer stage (product stage)
Deep distribution reached its limit, no deeper to the margin, incremental growth driven by volume was gone, and the space for category expansion was getting smaller... Turning around, it was found that consumers returned to the starting point: upgraded products!
The pattern of these four stages is: the enterprise goes from macro to micro - from solving capacity without needing distributors, to solving a few distributor problems, to solving hundreds of distributor problems, to solving tens of thousands of terminal problems, to today having to solve millions of user problems... Management tentacles push further and further, management contact points increase, and means become more advanced...
Reviewing this history, the evolution of the enterprise marketing system department names from sales section to marketing (section) company to marketing department (company, center). Within the subdivided functions, from business section + publicity section to sales department + marketing department! In these 30 years of evolution, the marketing department has always played a second fiddle role. Whether in resources or personnel, the marketing department always has to worship the sales department as the boss!
Over 30 years, many enterprises fantasized about having a god-like marketing department, even believing that a single advertising slogan could create a ten-billion brand! **In reality: 99% of marketing departments are accused by sales departments of being pig teammates!**
The demand that can be satisfied with eyes closed caused the marketing department's functions to degenerate, and the sales department became an invincible god! While the pig teammate cannot turn over, the most miserable thing is that it only spends money and doesn't earn money, unlike the kamikaze team (sales department) which can take quantifiable, visible sales and profit KPIs to the boss to ask for bonuses. The marketing department's survival environment is parasitic in the era of subsistence brands! So it has to carry the black pot for this era! In reality, many foreign brands with strong marketing department capabilities were driven back abroad by China's kamikaze teams! This often leads to the boss's empirical illusion: the kamikaze team is invincible!
**1. Subsistence brands.** That is, basic demand brands aimed at satisfying primary needs with volume first. These brands were born in the process of desperately satisfying people's growing material needs, using scale or capital advantages to quickly increase capacity, build cost or channel advantages, and thus form habitual, forced consumption brands!
**2. Refined brands.** After subsistence, the needs are social needs and esteem needs! Tech products can be disruptive, but consumer goods emphasize upgrading. How can refined brands highlight emotion, belonging, and esteem? Personalized products supported by quality may be just the beginning of breaking the game. Remember three points: emotion, belonging, and esteem!
**Five characteristics of collective confusion among subsistence brands:**
> 1. Channel is king! No subsistence brand values consumers; resources are mostly concentrated on channels. 2. Stock dependence, no R&D! R&D capability is extremely weak, channel costs as high as 80-90%, R&D expenses less than 1%.
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> 3. Organizational aging! The organizational structure is matched to capacity and channels. This structure has no ability to reach consumers!
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> 4. Double low and double big! Low cost + low quality, maximum satisfaction + maximum occupation!
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> 5. No category expansion or safety awareness!
III. Self-Castration
**Kill your pig teammate, then revive and strengthen him!**
The two main forces in traditional marketing: sales department and marketing department. Because sales volume comes from channel terminals, traditional marketing-oriented enterprises often have a huge sales team to drive sales from channel terminals. The marketing department, because it lacks the ability to capture user information, is gradually marginalized to the role of advertising department.
The most common practice for traditional consumer goods enterprises to transform to the internet and reform their organization is sales department + e-commerce department (e-commerce as business). This is just the entry-level first step for traditional enterprises, adding a new channel! **Only the transformation of the marketing department is the essential manifestation.** The reformed marketing department must be integrated with the e-commerce department, using online traffic to guide offline, including communication language in the internet context. Many traditional enterprises get it exactly backwards: the marketing department's focus is on the sales department, or it is combined with the sales department! This structure will inadvertently, and inevitably, use offline traditional context or habitual logic to do internet things, resulting in a flood of bad reviews! So: to see a traditional enterprise's transformation, look at its marketing department! Where the focus of the traditional consumer goods marketing department is, there the company's transformation is!
In the past, to see a company's marketing level, you could collect information from the front line, such as terminal performance, office management, salesperson status... **Today, to see whether a company is active, you must look at the marketing department! Look at the marketing department's functions, structure, headcount, and expense ratio!**
Most small and medium enterprises desire an air force but cannot afford to raise one, nor can they afford to keep one!
> **1. Western marketing theory emphasizes the marketing department, based on the development of the commercial system and the maturity of the marketing environment.**
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> **2. Chinese marketing theory emphasizes the sales department, because channels bring their own traffic, traditional terminal push is king, can be bribed and stimulated!**
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> **3. Marketing is simple to buying and selling. If the resource focus is on buying, the marketing department is strong; if the resource focus is on selling, the focus is on the sales department!**
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> **4. Despise those who use the brand banner but do sales deeds, caused by performance chasing!**
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> **5. The internet will change communication rules. A marketing department with internet genes has unlimited potential. Whether it has such genes can be clearly seen by opening the functional structure of the marketing department!**
Do traditional enterprises want to transform? The first cut of transformation is to eliminate the marketing department:
> **1. Change the name: You can change it to any name, but you can no longer call it the marketing department.**
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> **2. Change people: average age under 30, headcount not less than 1/3 of the sales department.**
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> **3. Change position: from defender to forward, from defense to attack!**
Traditional marketing battles are often started by the sales department, after recruiting distributors and distributing goods, then promotion, often under the guidance of KPIs, taking while giving. The repositioned marketing department may lead the charge: building fan base, creating momentum, seizing public opinion, may give first and take later, with upfront investment!
Marketing is nothing more than buying and selling! Sales and marketing are the two pockets of the enterprise. The company's money (expenses) is fixed. Spending 90% of expenses on the sales department for push and 90% on the marketing department for pull is like energy conservation! If the effects are different, it's just a difference in time and technique!
Looking roughly at brands that rose after 2010, almost none are subsistence brands. The starting point is product + communication (consumers). The pig teammate rises or revives!
Note: The pig teammate's full revival is just finding an attacking forward. If the kamikaze team doesn't match, it will become the pig second team!
IV. Stock
Transformation risks come from within!
Traditional enterprise transformation is stock transformation, not starting from scratch! **For traditional FMCG enterprises, a more stable approach is to have two teams to fight the world:** One team focuses on mainstream sales, the other lays out future trend brands! One team uses human wave tactics in channel terminals; one is a special forces team of fans and mouse clicks! From a brand perspective, the marketing department has a team to guide online fan aggregation. From the sales department's perspective, one team focuses on mainstream sales, one team focuses on trend sales! From a channel layout perspective, incremental brands (varieties) need to re-layout distributors!
Online aggregate fans, offline capture terminals (channels)! Online can shout, offline can do! Trend attracts eyeballs, mainstream repairs the earth! Update your channel classification standards: offline sweep the streets, online sweep the net! Offline terminals still rely on deep distribution (co-selling) street-sweeping iron army support; online terminals establish supplementary networks, platform e-commerce, urban distributed e-commerce, community e-commerce and other new terminals use another team to do the homework!
Key point: The hardest thing to change is the stock gene! In dual-line operations, the hardest thing is not how to defeat the opponent, but how to prevent defeating yourself! The two teams' covert battles will occur frequently, with black guns firing non-stop. If the boss doesn't have enough wrist and strength, it may lead to brothers harming each other, internal firefight! Innovation has risks, act cautiously!
V. Reconstruction
Risk is opportunity, rise must be at the edge!
High distribution rate, high share, high profit margin are the three highs of dominant brands. This dinosaur-like dominance forms a sense of stock security that makes vision biased towards strategy and long-term, while micro-level blind spots are inevitable! The dominance of the entire industry chain or regional monopoly creates a huge body while achieving the security at the top of the food chain! Elephants dancing is really hard!
The more enterprises put innovation on the wall and hang it on their lips, the worse their innovation. The more they shout brand as a strategy, the worse their brand is done! In today's major changes in the communication environment, the importance of traditional brands will be diluted: "Good wine needs no bush" becomes "Good wine is the true brand"! The complexity of marketing actions stems from the inherent shortcomings of products!
New life must start small. Every brand (category) can be redone. What to do?
What is the opposite direction of giants? It is small, it is far away, it is safe! Can you do small? Can you do less? Can you be faster? Can you be fresher?
Open the universal 4Ps and do a benchmark check: Is your product the same as the dominant? Is your channel the same as theirs? Is your price the same as the giant's? Is your promotion the same as the competitor's?
**Is your product +? Is your channel +? Is your price +? Is your promotion +?**
Add what? You know! If I say it, I'm afraid it's vulgar!


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