---
title: "Transformation? First Cut: Eliminate the Marketing Department!"
description: "Traditional FMCG companies are losing the ability to capture consumer demand. The article argues that the first step in transformation is to eliminate the traditional marketing department, replacing it with a new structure that integrates with e-commerce and focuses on consumer engagement."
author: "方刚"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2019-01-21"
language: "en"
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---

# Transformation? First Cut: Eliminate the Marketing Department!

> Traditional FMCG companies are losing the ability to capture consumer demand. The article argues that the first step in transformation is to eliminate the traditional marketing department, replacing it with a new structure that integrates with e-commerce and focuses on consumer engagement.

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**1. Warning**
Traditional enterprises are gradually losing the ability to capture consumer demand!
The traditional marketing approach for FMCG is basically to be ubiquitous and convenient to purchase, such as high distribution rates plus vivid display. The logic emphasized in traditional marketing is 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 previously, demand kept rising like a snake game; you could just close your eyes and provide satisfaction. This satisfaction was often indirect, satisfying across channels, terminals, and sales organizations. **Once user-level changes occur, the manufacturer becomes the last point of information contact; even if it obtains information, after organizational decision-making and implementation, then passing through channels and terminals to consumers, half a year is gone!**
In terms of traditional marketing logic, the organizational structure of traditional enterprises can no longer effectively insight into and satisfy consumer demand. **The future company structure should be a flexible structure that stimulates core consumer groups, reflects consumer demand in products, and promotes spontaneously.**
**2. The Scapegoat**
Being the pig teammate for thirty years!
**1. Production Capacity Stage**
Demand was extremely strong; enterprises only needed to solve production capacity issues, including scale, cost, and efficiency, thus producing "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 divided departments into supply and marketing sections, integrating supply and sales. The positions that could be subdivided were sometimes called salesmen, simply: **personnel handling business, mainly responsible for customer liaison and account processing.**
**2. Channel Stage**
Characteristics: from big customers being popular to rampant, later cutting big accounts, flattening, going to rural areas. After production capacity surged, the enterprise's focus turned to sales; customers became flood discharge pipes. Initially, provincial and municipal big customers converted from supply and marketing systems or individual wholesalers began to block the speed of capacity discharge due to aging or channel (execution) blockage. **Thus, from a single pipe discharge to multiple pipe dredging, to get rich, cut big accounts.**
**3. Terminal as King Stage**
After flattening, it was discovered that the root of the problem was not the increase in the number of distributors or density, **but the key was terminal coverage and dominance, thus producing a manufacturer-led deep distribution stage**, 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 drivers disappeared; the space for category expansion became smaller... Turning around, it was found that consumers returned to the starting point: upgrading products.
The pattern of these four stages is: the enterprise goes from macro to micro - **from solving production 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 department names in enterprise marketing systems goes from sales section to marketing (section) company to marketing department (company, center). Within subdivided functions, it changes from business section + publicity section to sales department + marketing department. **In this 30-year 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!**
For 30 years, many enterprises fantasized about having a god-like marketing department, even believing that a slogan could create a billion-yuan brand. In reality: 99% of marketing departments are accused by sales departments of being pig teammates!
Demand that could 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 could not turn over, the most miserable thing was that it only spent money and didn't earn money; unlike the kamikaze team (sales department) which could take quantifiable, visible sales and profit KPIs to the boss to ask for bonuses, the marketing department's survival environment was parasitic in an era of subsistence brands, so it had to carry the black pot for this era. In reality, many foreign brands with strong marketing departments were driven back to their home countries by China's kamikaze teams, which often led 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 quantity as the priority. These brands were born in the process of desperately satisfying people's growing material needs, using scale or capital advantages to quickly increase production capacity, build cost or channel advantages, and thus form habitual, forced consumption brands.
2. Refined brands. After subsistence, needs are social and respect needs; technology products can be disruptive, but consumer goods emphasize upgrading. How can refined brands highlight emotion, belonging, and respect? Personalized products supported by quality may only be the beginning of breaking the game. **Remember three points: emotion, belonging, and respect.**
Five characteristics of collective confusion among subsistence brands:
> **1. Channel as king:** No subsistence brand values consumers; resources are mostly concentrated on channels.
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> **2. Stock dependence:** R&D capability is extremely weak; channel costs are as high as 80-90%, and R&D expenses are less than 1%.
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> **3. Organizational aging:** The organizational structure is matched to production capacity and channels. This structure has no ability to touch consumers.
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> **4. Double low and two big:** Low cost + low quality, maximum satisfaction + maximum occupancy.
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> **5. No category expansion and safety awareness.**
**3. Self-Castration**
Kill your pig teammate, then revive and strengthen it.
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, while the marketing department, lacking 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 and reorganize with the internet 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 essence. The transformed 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 wrong: 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 negative 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: for example, terminal performance, office management, salesperson status... Today, to see whether a company is active, you should look more at the marketing department, its functions, structure, headcount, and expense ratio.
Most small and medium enterprises desire an air force, but they don't know how to raise it and can't afford it.
> 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, and can be bribed or stimulated.
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> 3. Marketing is simply buying and selling; if the resource focus is on "buying," the marketing department is strong; if on "selling," the focus is on the sales department.
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> 4. Despise those who play the brand card but do sales work; it's the fault of 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 is to eliminate the marketing department:**
> **1. Change the name:** Change it to any name, but it can no longer be called 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 distribution and promotion, promotion follows, often under KPI guidance, taking while giving. **The transformed marketing department may lead the charge: building fan base, creating momentum, seizing public opinion, possibly giving first and taking 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 has effects like conservation of energy; if the effects differ, it's just a matter of time and technique.
Looking roughly at brands that rose after 2010, almost none are subsistence brands; the starting point is product + communication (consumers), and 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.
**4. 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 conquer the world: **one to capture mainstream sales, one to lay out future trend brands.** One team uses human wave tactics in channels and terminals; one is a special forces team of fans and mice. From a brand perspective, the marketing department has a team to guide online fan aggregation. From the sales department's perspective, one team captures mainstream sales, one captures trend sales. From a channel layout perspective, incremental brands (varieties) re-layout distributors.
Online aggregates fans, offline captures terminals (channels). Online can shout, offline can do. Trends attract eyeballs, mainstream repairs the earth. Update your channel classification standards: offline sweep streets, online sweep networks. Offline terminals still rely on deep distribution (co-marketing) iron army to sweep streets; online terminals establish supplementary networks, platform e-commerce, city distributed e-commerce, community e-commerce and other new terminals use another team to do homework.
**Key point: The hardest to change is the stock gene.** In dual-line operations, the hardest 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 firefights. Innovation has risks; act cautiously.
**5. Reconstruction**
Risk is opportunity; rise must be at the edge.
**High distribution rate, high occupancy rate, high profit rate are the "three highs" of hegemonic brands.** This dinosaur-like dominance creates a sense of stock security that makes vision biased toward strategy and long-term, while micro-level blind spots are inevitable. The dominance of the entire industry chain or regional monopoly will create a huge body while achieving a sense of security at the top of the food chain. Elephants dancing is really hard!
The more enterprises put innovation on the wall and on their lips, the worse their innovation. The more they shout brand as a strategy, the worse their brand. 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 truth of the brand." The complexity of marketing actions stems from inherent shortcomings in products.
New life always starts small; every brand (category) can be redone. What to do?
What is the opposite direction of giants? It is small, it is far, it is safe. Can you be smaller? Can you be fewer? Can you be faster? Can you be fresher?
Open the universal four Ps and do a benchmark check: Is the product the same as the hegemon? Is the channel the same? Is the price the same as the giant? Is the promotion the same as the competitor?
**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!
New Distribution will hold the **2019 (5th) FMCG + Internet Conference** during the Chengdu Spring Sugar and Wine Fair from March 16-18. This conference will focus on the topic **"Breaking the Game"** and conduct in-depth discussions with many brand owners, supply chain service providers, distributors, retailers, etc.
Compared to previous conferences, this summit will be fully upgraded. In addition to the original topics such as **channel innovation, city distribution logistics, distributor transformation**, it also adds **new marketing cases, IP + FMCG empowerment, community group buying, innovative retail** and other parallel forums. Through three days of ten high-density, high-quality expert sharing and exchanges, we believe every brand owner and distributor can learn the latest business models, expert opinions, and practical methods, find new tools and methods for their own breakthrough in 2019, and return to the track of rapid growth.
******Conference Time: March 16-18, 2019** **Conference Venue: Chengdu Longemont Hotel, Dragon and Phoenix Hall**
Conference Topics
**2019 5th FMCG + Internet Conference Topics**
Date | Time
| Venue | Topic
3.16
| All day | Main Forum | Breaking the Game - 2019 (5th) FMCG + Internet Conference
3.17| Morning | Parallel Forum 1 | New Logistics, New City Distribution
Parallel Forum 2 | How Can Distributors Achieve Iterative Upgrades?
Afternoon | Parallel Forum 3 | IP Empowerment, Helping Brand Growth
Parallel Forum 4 | How Does Community Group Buying Reconstruct the Value Chain?
3.18| Morning | Parallel Forum 1 | Retail Scene Innovation
Parallel Forum 2 | New Product Sell-Through Open Class
Afternoon
| Parallel Forum 3 | Social E-commerce
Parallel Forum 4 | New Marketing Open Class
Registration Method
**Registration channel is now open.** Long press the **QR code below** or **click "Read Original" to register**. 66% discount **early bird** special **tickets limited to 200, hot sale now...!**
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Previous Conference Review
Click the links below to review the 1st, 2nd, 3rd, and 4th FMCG + Internet Conferences:
**-END-**


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