The industry-wide challenge of product sell-through is undoubtedly a major test for food manufacturers and distributors, and also a collective reflection on traditional marketing thinking in the food industry. As the saying goes, sell-through stems from good marketing strategies, but it also relies on excellent channel execution. To this end, food companies must stand at the height of the entire industry chain, re-plan their functional positioning, strengthen their product development and marketing promotion capabilities, and at the same time closely unite with channels and work closely with distributors to jointly break the ice of sluggish sales.
Sell-through strategy is a complete product promotion plan
Currently, the food industry generally faces the test of sell-through pressure, but the problems exposed by various companies are different: some companies have good product quality and image, but do not do market promotion, resulting in no one paying attention at the terminal, and sales are worse than second- and third-rate products; some companies have strong strength and are determined to build a brand. After various promotional campaigns, the product is nowhere to be seen at the channel terminal. Without distribution rate, there is naturally no sell-through rate; there are also companies that have both promotional campaigns and ground promotion, with terminal store purchases and promotional investments not lacking, but as soon as the market begins to sell through, the company cuts investment, and the sell-through situation takes a sharp turn for the worse. The product becomes popular for a short time and then disappears.
Looking at the above three types of companies, the first type has no marketing strategy, and the market has never sold through; the second type has a marketing strategy, but the strategy is not right, leading to slow market sell-through; the third type has market sell-through, even becomes popular, but dies too quickly, and sell-through is not sustainable. This also reflects three misunderstandings in formulating sell-through strategies:
First, product sell-through cannot be separated from promotion, but is promotion alone enough? Companies simply equate marketing with promotion. Under this concept, the sell-through strategy can only treat the symptoms, not the root cause, and even leads to promotion syndrome, that is, big promotion leads to big sales, small promotion leads to small sales, and no promotion leads to no sales.
Second, sell-through is not just a single means, but a systematic measure. For example, focusing on high-altitude brand hype but ignoring basic channel construction makes the brand a source without water. If the channel is unclear, the terminal is invisible, promotion cannot keep up, and consumers do not buy it, then sell-through becomes empty talk.
Finally, thinking that sell-through is only a phased market launch, ignoring the continuity of strategy. Companies operate the market with a top-heavy approach, trying to open up the sell-through situation by concentrating firepower in the early stage, then withdrawing firepower to sit back and reap greater profits, but in the end, it backfires, making it difficult to achieve long-term and best-selling products.
Fundamentally, sell-through is to make products sell at the terminal. The so-called sell-through strategy is a complete set of product promotion plans provided by companies to distributors, including how to create publicity, how to build channels, how to execute promotions, how to maintain terminals, how to manage cross-regional sales, and how to support policies, so that products truly sell through at the terminal. From this perspective, attracting investment is only the first step in a company's marketing actions, and sell-through is the top priority. Only by working closely with distributors, distributing products to terminals, and achieving substantial consumption can the entire marketing action be considered complete.
Two keys to grasping sell-through in the new normal
Currently, after rapid development, China's economy has stabilized and gradually entered a stage of new normal growth. Many food manufacturers believe that the macroeconomic downturn is one of the main reasons for difficult markets and slow sell-through. At the same time, food companies have to think about how to adapt to the market environment under the new normal and achieve counter-trend growth of products.
In this regard, marketing expert Liu Chunxiong believes that the macroeconomic downturn has a certain impact on the market, and food companies also face the problem of sluggish sell-through. But rather than using the economic downturn as an excuse for marketing failure, it is better to seriously study market changes, find opportunities for reversal, and solve the sell-through problem under the new normal with new marketing ideas. To this end, food companies need to proactively change according to market conditions and reasonably formulate product and marketing strategies.
First, innovate in products to cater to the development trend of mainstream products. Whether a company's sell-through situation is good or not depends on whether its products are mainstream. Moreover, with the continuous emergence of new mainstream products, they will gradually replace the market position of previous mainstream products, that is, mainstream shifting. If companies with sell-through difficulties still hold on to mainstream products from ten or twenty years ago, their market is bound to be sluggish. So, what kind of products can be considered mainstream?
In the past, the mainstream products in the food industry were low-quality and low-price products, which could meet consumers' demand for quantity. Companies solved the contradiction between consumption hunger and insufficient consumption capacity. But now the contradiction is that consumers have the ability to buy high-quality products, but companies cannot produce high-quality products, leading to the embarrassment of market prosperity but industry downturn. Therefore, the characteristics of future mainstream products are: first, quality is greatly improved on the original basis; second, the price range is one level higher than before; third, packaging is novel and can catch consumers' eyes. With these three characteristics, products are expected to become best-selling mainstream products.
Second, upgrade marketing methods, shifting the focus from distribution to promotion. In the past, whether large or small companies, they all did deep distribution, but ignored the risks behind deep distribution. Deep distribution is based on channel sinking, where companies deeply intervene in the market and take on some of the distributors' functions. The cost is that the company's human and financial investment is too large, even unsustainable. Therefore, deep distribution can only be used as a short-term strategic investment, helping distributors gradually improve their distribution functions, while avoiding excessive dependence of distributors on the company, ensuring that after the company exits, distributors can still maintain healthy product sell-through.
To this end, companies must adhere to four principles: First, only help distributors who are willing to cooperate, only help those who cannot do it, not those who are unwilling; Second, must be able to make the market pattern improve a level in the short term; Third, manufacturers only do key work, and daily work is completed by distributors; Fourth, cooperate in distribution and gradually exit. In addition, it is worth noting that with the development of the market, marketing will also enter the era of promotion. The promotion era requires reordering marketing, that is, product first, channel second, method third, team fourth, brand fifth. Channel marketing methods will also change. The most obvious manifestation is that the number of company promotion personnel will exceed that of sales personnel. The former is responsible for promoting products to consumers, while the latter mainly maintains manufacturer relationships, which means companies need to have more contact with consumers.
Stabilizing channels and boosting confidence are urgent
"Competition in the food industry is not individual competition between enterprises and enterprises, or between distributors and distributors, but competition of the entire value chain with the manufacturer-distributor relationship as the core." This is a viewpoint repeatedly emphasized by "Sugar Tobacco Wine Weekly". In the current sell-through dilemma, food companies not only need strong chains, but also strong circles. Only by uniting channel partners and forming a community of interests can they effectively control the market and win time and opportunities to reverse the sell-through situation.
But it must be admitted that the relationship between food manufacturers and distributors has always struggled between game and cooperation. When product sell-through is smooth, differences and contradictions between manufacturers and distributors are often masked by market prosperity. When sell-through is hindered, market pressure and risks will appear and amplify, and the manufacturer-distributor relationship is bound to face challenges. At this time, the channel strategy adopted by the company largely determines the direction of the manufacturer-distributor relationship. As a distributor said: "If companies do not cherish distributors, distributors will become more realistic. If they can make money, they will endure and do your brand. Once the company has a crisis, distributors will not hesitate to abandon you." Therefore, the prerequisite for companies to get out of the sell-through quagmire is to ensure the stability of the channel network. As long as distributors have the willingness to continue promoting products, products will not die in the market. To this end, companies should at least do the following three aspects:
First, actively bear market development costs and encourage distributors to do more activities. The best way to improve product sell-through is to increase market activity. Especially when sell-through becomes an industry-wide problem, whoever actively does market activities will achieve sell-through faster. Therefore, companies should encourage distributors to organize tastings, carry out promotions, and put promotion staff in the front-line market, and actively and timely reimburse related expenses for distributors.
In fact, the reason why distributors reduce investment in products is largely because the market activity expenses they advance are not reimbursed for a long time, thus losing trust in the company and lacking attention to the product. To this end, companies must improve operational efficiency, compress review time as much as possible, especially for expenses incurred in joint activities, and it is best to reimburse them as soon as possible. In addition, losses in business operations, such as product damage and extra terminal expenses, should also be actively borne by the company. These measures can not only improve the distributor's capital situation, but also, after seeing the company's determination to improve sell-through, the distributor's personnel, vehicles, networks, and other resources will also tilt accordingly.
Second, change the channel strategy dominated by inventory pressure and alleviate the inventory pressure of distributors. Now companies must realize one point: simply pressing inventory on distributors cannot solve the problem of difficult sell-through, but will aggravate the hidden danger of product nearing expiry and channel inventory risk. In the eyes of distributors, the company's inventory pressure behavior is a manifestation of transferring business risks. Some distributors even refuse to accept inventory pressure and are threatened by company personnel with cancellation of agency rights. From the results, inventory pressure not only does no good to improving sell-through, but also greatly damages the manufacturer-distributor cooperation relationship. As mentioned earlier, the current focus of the company's work is to stabilize channels and convey confidence. Blindly pressing inventory is obviously cutting off its own retreat.
Therefore, companies should adjust channel strategies in a timely manner, strengthen control over channel inventory, and actively cooperate with distributors to digest existing inventory. When distributors see that the warehouse is no longer piled with goods, they will firmly believe that your products can sell through!
Third, focus on regional markets and concentrate advantageous resources to let some distributors move first. Facing the dual pressure of declining sales and shrinking funds, many companies find it increasingly difficult to operate the national market. If they continue to hold on, they may "lose both the wife and the soldiers". Instead, it is better to combine market conditions, select several advantageous regions nationwide, focus limited resources, let some distributors improve their sell-through situation, and then drive sales in surrounding markets.
In addition, in order to improve the survival rate of new products and avoid the situation of "one order death" for distributor customers, companies can position the recruitment and promotion of new products in specific regions, follow the consumption characteristics of the region, and choose more matching distributors to cooperate, thereby ensuring smooth product sell-through.
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