In the current market, there are too many competing products, and mainstream products require frequent promotions, while non-mainstream ones need even more. The prolonged price war has spoiled consumers. "Frequent promotions yield no profit, but once promotions stop, brand sales drop directly by 30%." This is a dilemma every distributor faces.
Currently, to seize the peak sales opportunities during each festival, distributors have to intensify promotional efforts, hiring promoters and setting up displays, spending a lot but without significant sales improvement. Yet, not promoting is not an option, leaving distributors in a bind. How to solve the 'no promotion, no sales' problem? The experiences of three mainstream distributors from different regions, handling different products and channels, may offer some insights.
- Differentiate Promotion Targets and Promote Rationally
Yu Bensheng, Sales Manager of Caimao Commercial Firm
Caimao Commercial Firm distributes products such as Haoliyou, Panpan, and Special Forces, covering a population of about 2 million in parts of Puyang City, Puyang County, and Xinfeng County. Yu Bensheng stated that 'no promotion, no sales' is particularly evident for distributors who rely heavily on secondary wholesalers. This is because some secondary wholesalers are profit-driven; when products sell quickly, they add to the momentum, but when products don't move, they won't consider sharing the burden with the distributor. In such cases, distributors need to increase outlets, improve network coverage, maintain terminal relationships, and enhance channel control. Therefore, Caimao Commercial Firm places special emphasis on developing B and C class stores in rural markets, achieving a direct control rate of 90% among four to five thousand terminals.
Due to the large number of directly controlled terminals and strong channel control, Caimao Commercial Firm focuses more on promotions at the terminal level. Yu Bensheng said that promotions should be differentiated into two types: terminal store promotions and consumer-facing promotional activities, depending on the product. For terminal store promotions, gifts are often used based on the store owner's needs, such as home appliances or cash, which significantly boosts sales of snack products. However, it is also necessary to calculate based on the terminal's actual capacity; if the distribution volume is too large, it may lead to bad inventory at the terminal and cause downstream customers to return or exchange goods.
Consumer-facing promotional activities are usually carried out by major brands in conjunction with supermarkets, such as Haoliyou's promotions during holidays, which significantly increase sales. At this time, the distributor plays a public relations and service role. They need to formulate a reasonable plan in advance, select the store in the early stage, and communicate with the manufacturer's business manager to obtain the maximum resources with minimal investment, such as posters, floor displays, end caps, and reasonable pricing. They should also assign dedicated promotional staff and temporary promoters for key support, enhance promotional pull, create a festive atmosphere, and increase the brand's influence in the region.
- Quantify Indicators and Boost Promoter Motivation
Yu Zhenhui, General Manager of Dongzhaojie Trading
Dongzhaojie Trading mainly distributes Want Want bulk goods and Zuixiangyuan mooncakes and other snack products, with Suguo supermarket system as the main sales channel, supplemented by individual supermarkets. The team includes sales, logistics, and promoters, totaling about 100 people, of which about 70 are promoters. These products are basically mainstream in the market, and consumption is more pronounced during festivals, making the management and training of promoters crucial.
The Mid-Autumn Festival is the peak season for gift sales, and Zuixiangyuan mooncakes and Want Want gift packs sell quickly, so promoters play an important role in gift sales. Dongzhaojie Trading has a complete management system for promoters, covering recruitment, training, business management, performance appraisal, daily incentives, and information management, and has established a quantifiable assessment system to stimulate their enthusiasm.
To provide better service to consumers, during the golden period of mooncake promotions, Dongzhaojie Trading, together with the manufacturer, trains sales guides on product recommendation, explanation scripts, and sales etiquette when facing customers. Promotion costs are shared by the manufacturer and distributor, and guides are paid a salary and commission based on a certain percentage of product sales. For example, during the promotion period, sales below 20,000 yuan earn a 1% commission, and sales above 20,000 yuan earn a 2% commission. Due to adequate incentives, the daily sales of Zuixiangyuan Cantonese-style mooncakes at a single store reached tens of thousands of yuan.
Appendix: Assessment and Incentive Plan for Sales Guides at Dongzhaojie Trading
Job Level | Tenure | Assessment Requirements | Corresponding Benefits | Demotion Conditions Fourth-class Silver | 1 month | Pass probation to enter this level | Base salary + commission | 3 cumulative rankings in bottom 10% Third-class Gold | 6 months | Rank in top 10% twice in monthly assessments | Base salary + commission + 20 yuan | 3 cumulative rankings in bottom 10% Second-class Diamond | 12 months | Rank in top 10% for 6 consecutive or 8 cumulative monthly assessments | Base salary + commission + 50 yuan + eligibility to compete for consumer consultant training school | 3 cumulative rankings in bottom 10% First-class Crown | 24 months | Rank in top 10% for 8 consecutive or 14 cumulative monthly assessments | Base salary + commission + 100 yuan + eligibility to compete for consumer consultant training school + insurance subsidy of 100 yuan + 3 days paid leave in off-season | 3 cumulative rankings in bottom 10% Special Master | 36 months | Rank in top 10% for 15 consecutive or 20 cumulative monthly assessments | Base salary + commission + 200 yuan + eligibility to compete for consumer consultant training school + insurance subsidy of 200 yuan + 7 days paid leave in off-season | 3 cumulative rankings in bottom 10%
- Clarify Promotion Objectives and Combine Promotion Methods
Yu Xiuwei, General Manager of Tangshan Baozhu Food Co., Ltd.
Baozhu Food mainly distributes products such as Yili milk. In the past, it often encountered the 'no promotion, no sales' problem because it did not choose different promotion methods based on different promotion objectives. Yu Xiuwei believes that one promotion method cannot satisfy two objectives; the promotion method to boost sales is different from that for long-term brand development. Many times, distributors confuse objectives and methods, resulting in chaotic, self-entertaining promotions, which are pathological promotions.
The fundamental purpose of promotion is to promote the product, which requires combining multiple promotion methods based on the product's life cycle and changes in the competitive environment:
First, the new product cultivation period: at this stage, the product has just been launched, and the key is to help it grow;
Second, the rapid growth period: after the product grows, it needs to establish a position in the industry. At this time, consumers have a preliminary understanding of the product's price, functional selling points, and benefits. How to increase product volume requires thinking about pricing and matching value-added gifts;
Third, the maturity period: the product has achieved sales success and is attacked by competitors. At this time, it is necessary to eliminate competitors in a targeted manner rather than spreading out comprehensively. On the one hand, stabilize the price system; on the other hand, avoid excessive consumption that could break the capital chain;
Fourth, the decline period: the product becomes a chicken rib (of little value), consumers have high awareness of the product, and promotions based on price or gifts are ineffective. The only options are to conduct blood-letting promotions (deep discounts) or completely abandon promotions. During this stage, when competing with rivals, you can combine with competitors' promotional intensity to consume their resources, while also fully promoting new products in the other three stages.
Price promotion is the lowest level of promotional means. It works because consumers get a bargain, but over time, it lowers the product's image. At this point, you can adopt combined promotion methods, selecting related gifts to blur the price and guide consumers' perception of the combined product. It is best to cooperate across industries, joining forces with other product suppliers to conduct promotions in supermarkets, such as bread and milk, frozen dumplings and vinegar, making it easy for consumers to form consumption scenarios.
This type of promotion is highly attractive to consumers and also protects the interests of distributors and enterprises. The key is for distributors to facilitate communication and interaction between brands.
Source: Food Business -END-