Liu Chunxiong's Comments
1. Codes are the most convenient way to connect channel customers and end users.
2. The “five codes” evolved from baijiu: inner cap code, outer cap code, inner box code, outer box code, and pallet code. For FMCG companies, these can be understood as user C code, promotion code, terminal b code, distributor B code, and logistics code. All five channel objects are within the codes.
3. “Five-code integration,” also called “five-code association,” establishes a logical chain among all channel members at once, making channel relationships transparent on the system and simplifying full-chain digitalization.
4. Traditional channels rely mainly on channel push (selling). The most valuable codes in the “five codes” are the bC codes, making bC integrated digitalization technically possible. bC integration has both selling and channel pull functions (pull-selling). For example, the “One Yuan Joy” (Dongpeng Special Drink) in the beverage industry, and scenario-based pull in the baijiu industry.
5. “Five-code integration” also makes online-offline integration possible. Because bC codes can be product codes or scenario codes for offline promotion.
6. It is apt to say that “five-code integration” is the infrastructure for channel digitalization. It can unify all digitalization models within one system and enable data sharing.
Why is “Five-Code Integration” erupting at this time?
After three years of the pandemic, China's economy has been severely weakened. Consumption, investment, and exports—the three growth engines—have all slowed simultaneously, causing cash flow strain for many enterprises and individuals, and even capital chain breaks. The entire market is filled with pessimism, and the public tends to be conservative and cautious in both consumption and investment.
Looking back at 2023, China's FMCG industry faced complex challenges: price inversion, high inventory, and difficult sell-through became common industry problems, leading to a downturn in market sentiment. Overall, 2023 was a year of deepening involution.
Involution is a zero-sum game under the same dimensional conditions. The market often sees big fish eating small fish, such as the sinking of famous liquor brands in 2023, where leading brands gradually encroached on regional baijiu market share. Involution is an inevitable phenomenon in the evolution of most industries and a process traditional enterprises must undergo. To escape the sea of involution, traditional enterprises must jump out of the current competitive dimension, enter a higher dimension, and then launch a dimensionality reduction strike.
So, how can traditional enterprises upgrade their dimension? Seeing through the essence, finding the rules, grasping the key issues of the main contradiction, and concentrating superior forces to fight a war of annihilation have always been the surefire way to solve problems.
As we all know, traditional FMCG companies' offline channels typically account for over 80% of revenue. Data shows that among 20 listed baijiu companies, traditional distribution channels account for a much larger share of revenue than direct sales, with most companies' traditional distribution channels exceeding 90% of revenue. Therefore, the main battlefield for traditional enterprises is offline channels. To achieve counter-trend growth in the era of shrinking volume, FMCG companies must use “channel digitalization” to reconstruct offline channels, build a new integrated manufacturer-distributor-store relationship and a value chain of full-chain shared profit distribution, and complete the conversion of old and new growth drivers. Only then can they upgrade their dimension, escape involution, and launch a dimensionality reduction strike. This is the main contradiction for traditional FMCG enterprises.
Channel digitalization relies on two major infrastructures: “product flow” and “channel relationships.” “Five-code integration” is the basic prerequisite for building these two infrastructures and is the key lever for channel digitalization. Thus, “five-code integration” is the key issue within the main contradiction.
Only by grasping the main contradiction and solving key issues can companies gain competitive advantage and carve out a space in the shrinking market. This is precisely the logic behind why major brands have been rushing to deploy “five-code integration” in recent years.
When we talk about five-code integration, what are we really talking about?
Since Miduo systematically proposed the construction methodology in 2018, “five-code integration” has become a basic consensus among mainstream FMCG companies, especially in the baijiu industry. Many famous liquor companies regard it as an important strategic project. For example, Luzhou Laojiao, Langjiu, Tanjiu, Jiugui, and Shede have all adopted “five-code integration” for channel digitalization reform in recent years.
After products undergo five-code integration digitalization, the entire channel chain is connected, and all roles such as channels and terminals are included in the rebate and profit-sharing system. BbC integrated linkage promotes store sell-through and becomes a new growth driver. In the future, five-code integration will become the infrastructure for FMCG companies.
Since “five-code integration” is so important, when everyone talks about it, what are we really talking about? Below, we will elaborate from the dimensions of definition, essence, and underlying logic.
1. Definition of Five-Code Integration
“Five-code integration,” also called “five-code association,” is an advanced application form based on the one-product-one-code technology. Through five-code integration, companies can carry out five-code association coding transformation on multi-level packaging products on the production line, achieving data collection and association of “inner cap code, outer cap code, inner box code, outer box code, and pallet code,” forming five-code integration. Then, based on the EBC (Enterprise Business Capability) system, functions such as anti-counterfeiting traceability, code-scanning marketing, channel control, distribution rebates, and channel inventory management are realized, achieving digitalization of “product flow.”
The five codes correspond to different user roles and application scenarios, each performing its own function, interrelated, and with data interoperability. For different industry customers and product packaging methods, the five codes are not fixed. For example, boxed products generally consist of six codes: “inner cap code, outer cap code, outer box code, inner box code, outer box code, and pallet code.” Some products are composed of three or four codes. Although the forms differ, the product logic is the same, so we generally call it “multi-code integration,” but for ease of external communication, it is commonly referred to as “five-code integration.”
2. What is the essence and underlying logic of five-code integration?
The essence of “five-code integration” is the digitalization of “goods,” realizing the digitalization of the entire lifecycle of a product from production to consumption.
A product's life goes through the full lifecycle of “procurement → production → quality inspection → packaging → warehousing → logistics → distributor → distribution → store → salesperson → consumer.” All business activities of an enterprise revolve around this lifecycle line. Five-code integration can connect all links in the channel chain, achieving end-to-end digitalization; all business data flows back, realizing the datafication of all business, and accumulating massive data; forming data assets. Through data processing and governance, it intelligently empowers front-end business applications, thereby achieving digital upgrade of traditional channels and helping brands build a full-chain digital capability foundation that promotes channel digitalization and business growth. Therefore, “five-code integration” is the infrastructure project for channel digitalization.
The underlying logic of “five-code integration” is “point, line, surface, and volume.”
The essence of traditional FMCG enterprises is “selling goods.” All business activities revolve around “selling goods.” In the current shrinking market environment, enterprises must return to the fundamentals, return to the origin, and start anew. Realizing product digitalization is the starting point and foundation of enterprise channel digitalization. Without product digitalization, empty talk of marketing digitalization and channel digitalization is like a castle in the air. Five-code integration will build the “starting point” for enterprise channel digitalization.
Through one-product-one-code technology, “five-code integration” realizes the collection and association of “inner cap code, outer cap code, box code, box code, and pallet code.” According to “order, code segment, batch, and serial number,” the ownership of goods is precisely transferred to distributors, terminals, and consumers. Enterprises can accurately know when a product was produced on which production line and by which shift, when it was shipped from which warehouse to which distributor, which second-tier distributor it was then sold to, which terminal store it was then sold to, when the store opened the box and put it on the shelf, and finally when it was purchased and scanned by a consumer. This connects all links in the enterprise's production, warehousing, circulation, retail, and consumption chain, and accurately collects real-time product circulation data at each link, connecting points into lines, and realizing the digitalization of “product flow.”
After products complete the “five-code integration” digital coding transformation, they possess digital capabilities. During circulation, in addition to realizing online product flow, channel relationships can be quickly established based on product flow. The massive number of products continuously delivered to terminals by FMCG companies will become touchpoints that form relationships with channel users (distributors, stores, salespeople, promoters, and consumers). Terminal stores can register store accounts with one click by scanning the box code when opening the box; promoters can also register accounts with one click by scanning the box code or outer cap code. With the help of Miduo's 300W terminal store ecosystem database, automatic store verification and audit are completed, thereby establishing a “3+2” multi-role account system for the enterprise.
During the registration and verification of channel accounts at all levels, channel relationships are established based on product flow and sales area attribution, connecting points into lines, enabling the onlineization of channel relationships such as “channel type, channel chain, and terminal network,” and connecting the full chain, i.e., F2B2b2C.
Channel digitalization relies on two major infrastructures: “product flow” and “channel relationships.” Through “five-code integration,” product flow and channel relationships are digitalized. The two lines form a surface, building a “basic surface” with channel digitalization capabilities for the enterprise.
In the past, due to the lack of data capabilities and means, channels were fragmented, terminals were disconnected, and people, goods, and places were not online. Enterprise marketing behaviors were “flood irrigation” style, with problems such as low efficiency, wasted expenses, and no data retention, which urgently needed solutions.
All marketing scenarios rely on the intersection of “channel relationships” and “product flow.” After digitalizing product flow and channel relationships through “five-code integration” and building a “basic surface” with channel digitalization capabilities, enterprises can then, based on this, revolve around marketing scenarios, using marketing expense digitalization (TP&CP) as the “baton” to restore all offline business scenarios.
Traditional CP promotions for consumers (buy gifts, discounts, “one more bottle”), traditional TP activities for terminal stores (purchase incentives, box opening and shelving, product displays), traditional TP activities for promoters/service staff (bottle cap collection, product promotion), and TP activities for distributors (ordering tasks, sales rebates, tasting events, banquets) are all digitally upgraded, realizing the datafication of all business.
Through the big data engine, precise expense placement and targeted strikes are achieved. “Total budget, pre-expenditure, post-offset” is upgraded to “total budget, volume-based placement, automatic offset, and dynamic effect control.” Ultimately, without changing the total sales expense budget, expense placement becomes more precise, efficient, and controllable, ultimately empowering enterprises to establish a marketing digitalization system of “integrated control of factory, store, and terminal, and full-chain shared profit distribution,” driving business growth through digitalization.
The above is the “point, line, surface, and volume” of “five-code integration.” Starting from product digitalization, connecting the two lines of product flow (goods) and channel relationships (people), through the integration of lines, building a basic surface with channel digitalization capabilities, and on this basis completing the digitalization of marketing scenarios (place), and ultimately reconstructing “people, goods, and place” through digitalization, establishing a complete marketing digitalization system for the enterprise.
Why is “Five-Code Integration” difficult to succeed?
Because five-code integration, as an important technological innovation, is also going through these stages. The era of shrinking volume has arrived. Some traditional enterprises are unwilling to admit that shrinking volume is the new normal, still immersed in the inertia of incremental growth. When sales decline, they blame the macro environment for affecting increment. Their business operations remain in the inertia of extensive growth in the past, and they do not actively embrace digitalization.
As a digital innovation, many traditional enterprises feel it has nothing to do with them, or choose to “turn a blind eye.” Some think five-code integration is just one-product-one-code and nothing special. Others do not have a correct understanding of five-code integration, treating it as a simple promotional tool, and failing to see its essence and underlying logic. These are all obstacles hindering enterprises from successfully implementing five-code integration and achieving channel digital transformation and upgrading.
We need to clearly recognize that five-code integration is a systematic project, a typical “old city renovation.” It vertically coordinates the enterprise's upstream and downstream, and horizontally links multiple internal departments. It is a “top leader project.” Without the top-down push from enterprise decision-makers, it is difficult to succeed.
During a recent pilot project with Miduo on one-product-one-code, a P&G project leader sighed: “The one-product-one-code project is the most complex project I have ever been responsible for. I didn't expect to coordinate so many departments!”
Five-code integration involves comprehensive digital coding transformation of multi-level packaging products, which increases product accounting costs. For FMCG companies, it may also require production line transformation. Deploying industrial cameras and production line industrial computers to collect and associate QR codes on inner and outer packaging will increase factory costs, possibly involving budget revisions and allocations between production and business departments, requiring enterprises to adapt their internal budget systems.
Five-code integration involves production line transformation, data collection, and product code scanning for inbound and outbound, which changes the original workflow of the factory. Many enterprises have performance assessments for factory and production department employees. Changing workflows may mean increased workload. If it affects the achievement of performance assessment goals, it may encounter employee resistance. This requires enterprises to adjust their performance assessment systems in a timely manner according to actual conditions.
After enterprises achieve digital upgrade of marketing scenarios through five-code integration, the way expenses are placed will change. Previously, TP expenses for channels and terminals, and CP expenses for consumers, were processed through offline approval and verification, creating gray areas such as leakage, expense interception, and fraudulent claims. After enterprises use five-code integration to make expenses online, expenses go directly to terminal users without offline manual intervention. This will directly conflict with the interests of existing vested interest groups, who may resist fiercely, potentially causing the project to die prematurely.
This is not uncommon in Miduo's past customer cases. If enterprises cannot establish a reasonable expense structure and supporting expense policies, it will be difficult to advance.
In addition, because the way expenses are distributed changes, various promotional expenses are distributed online through one-product-one-code, which also involves financial and tax compliance issues. Many companies have not made proper arrangements in tax planning and capital security, making it difficult to win the support of the finance department. If the CFO cannot view issues from the height of enterprise digital development and actively embrace change, it will form a significant resistance to business advancement.
Some enterprises implement five-code integration with a quick-fix mentality, hoping to see immediate results after investment. They lack phased implementation plans, reasonable goals, and mechanisms for fault tolerance and trial and error. When they do not see short-term help in achieving sales targets, they begin to doubt digitalization, and the project may even be halted. Digital construction is like digging a well. If enterprises cannot firmly set goals and persistently dig deep, but instead shoot and change, they will never find water. Shallow attempts and constant well-digging will never succeed.
Furthermore, “five-code integration” itself is only an infrastructure. Behind it, a powerful EBC (Enterprise Business Capability) system is needed for supporting, and a strong code middle platform capability is required. Miduo has spent ten years in research and development, successfully upgrading “one-product-one-code 1.0” to “one-product-one-code 4.0,” specifically designed for “five-code integration.”
Miduo's one-product-one-code 4.0 consists of three parts: “Identifier Middle Platform,” “Identifier Center,” and “Identifier Applications.”
Identifier Middle Platform: Defines code types, code rules, and encryption algorithms, manages code batches/relationships, provides unified identifier resolution services, and is attributed to Miduo's business middle platform.
Miduo's one-product-one-code 4.0 adopts safe and efficient coding rules, supports multiple code rule configurations, is compatible with mainstream international identifier resolution systems, and supports multiple encryption algorithms such as AES and hash.
Identifier Center: Responsible for code generation configuration, code issuance applications, identifier management, and code package downloads. It is the infrastructure of the brand domain system and is attributed to the basic modules of the brand domain EBC system.
Miduo's one-product-one-code 4.0 covers full lifecycle management from code issuance, coding, production, warehousing, circulation, to consumption.
Identifier Applications: All SaaS applications based on identifiers, including logistics traceability, product traceability, and intelligent marketing, are attributed to the application center of the brand domain EBC system.
Guided by “marketing vision and incremental thinking,” using marketing expense digitalization as the baton, aiming to improve marketing efficiency, relying on digitalized “channel relationships” and “product flow,” and based on different channel roles (B-end, b-end, C-end) and role association attributes (bC linkage, Bb linkage, BbC linkage), Miduo provides solutions for various marketing scenarios on the basis of “integrated control of factory, store, and terminal, and full-chain shared profit distribution.” Based on the dual helix of “network collaboration” and “data intelligence,” the Miduo big data engine system, through the conversion of old and new growth drivers of “datafication of all business, assetization of all data, and businessization of all assets,” helps brand merchants achieve “million terminals and billion fans,” driving business growth through digitalization.
How to correctly implement five-code integration?
Five-code integration, as the infrastructure project for channel digitalization, is a difficult but correct thing. It must be a top leader project. To correctly implement five-code integration, it is necessary to break it down from the dimensions of strategic goals, organizational system, system construction, and implementation steps.
1. Strategic Goals
Enterprises need to formulate strategic goals from top to bottom based on analysis of the current situation and the enterprise's development goals. Around the goals, formulate the digital evolution path, implement in phases, break down advancement steps, unify the consensus of enterprise management, and enable all departments and teams to generate synergy on digital projects. “Those with the same desire win.”
In 2018, Snow Beer elevated product digitalization to a strategic height, defining it as a digital traceability infrastructure project. In 2019, it completed production line transformation, coded products, and achieved multi-code association, laying a solid foundation for subsequent marketing digitalization construction and supporting Snow Beer's counter-trend growth during the three pandemic years.
Typical enterprises with successful digital construction in China, such as Yanghe, Wuliangye, Jiannanchun, and Luzhou Laojiao, have all promoted five-code integration as a strategic goal and laid out early.
2. Organizational System
The advancement and implementation of the five-code integration digital project involves coordination among production, warehousing, sales, IT, finance, and other departments. Many enterprises simply define the five-code integration project as an IT project and hand it to the IT department to drive. According to Miduo's past experience serving customers, this is ultimately difficult to succeed.
The traditional IT department's function is more about developing and maintaining internal systems, passively meeting business department needs. Its ability to drive business and coordinate across departments is far from sufficient. This requires enterprises to build new digital organizations and capabilities, and match corresponding assessment indicators, with business orientation and user-centricity, strongly driving cross-departmental collaboration.
A company with preliminary marketing digitalization capabilities, at every internal meeting, some positions may be absent, but ITBP must attend. In recent years, more and more leading enterprises have established dedicated marketing digitalization departments, directly integrating digitalization with marketing business. This is a common phenomenon.
Among all brand merchants served by Miduo, P&G is one of the brand merchants that most respects the value of service providers and also has the strictest requirements. This may benefit from their relatively clear digital concepts (integration with business), digital blueprint planning (step-by-step promotion), and digital architecture design (what needs self-building, what must be SaaS). This is more conducive to the success of enterprise marketing digitalization capability building and also helps marketing digitalization service providers provide better services.
3. System Construction
In the process of promoting channel digitalization capability building based on five-code integration, there are currently two main ways for system construction: private deployment (self-built) or cooperation with SaaS service providers. From Miduo's long-term practical experience: internal management systems are suitable for self-building, and external business systems are suitable for procurement.
Internal management systems are closed management systems within the enterprise, mainly used by internal employees, with weak dependence on external ecosystem resources, emphasizing the standardization of business processes, pursuing management stability, and using management stability to solidify internal process standards. Typical examples are ERP systems, so they are suitable for self-building.
External business systems are open empowerment systems outside the enterprise, mainly used by external partners, with strong dependence on external ecosystem resources, emphasizing empowerment of channel partners, pursuing business growth, and using system flexibility to respond to rapidly changing markets. Typical examples are EBC systems, so they are suitable for procurement.
External business systems involve long channel chains, limited enterprise control, diminishing influence, and terminal users beyond reach. This requires business systems to have strong operational capabilities; the ability to connect the full channel chain; the ability to reach all scenarios; the ability to integrate SFA, TPM, DMS, and other systems; the ability to break data silos and achieve data interoperability; and the ability to flexibly configure according to market changes, to support enterprises in accurately restoring offline scenarios through digitalization and driving channel users through various marketing scenarios and operational indicators to achieve business growth.
The business system based on five-code integration is essentially an ecosystem centered on achieving user success. We call it the EBC (Enterprise Business Capability) system. A core key of the ecosystem is that it must be “live data.” Data collected and entered by the enterprise is lagging, static, and heterogeneous “dead data.” Any “live data” is based on user ID, and any user ID grows within the digital ecosystem.
So wherever users are, enterprises must connect. Only data created autonomously by users is real-time, dynamic, and continuous “live data.” Data from self-built digital systems is basically “dead data.” “Live data” is like the “living water” of the Yangtze and Yellow Rivers, while “dead data” is like the “dead water” of a pond.
In any digital ecosystem, user IDs assume the role of data “producers,” typical “self-sustaining organisms,” highly dependent on the rich scenarios (inorganic environment) of the digital ecosystem for nourishment. For any enterprise, the investment in people, goods, and money required to build rich scenarios is enormous, equivalent to “enterprise running a society,” no less than “building a power plant to use electricity.”
Moreover, a digital ecosystem built by a single enterprise often lacks sufficient “consumers” (B-end users) and decomposers (algorithm models). The data chain is relatively thin, and the data network is fragmented, lacking basic stability. This kind of “building a power plant to use electricity, building a safe to save money” behavior of “enterprise running a society” is a regression in efficiency. Not only will it fail to achieve expected results, but in the long run it will definitely hinder growth and greatly deplete the enterprise's own vitality.
Therefore, enterprises must choose an EBC (Enterprise Business Capability) system that is user-ID-centric, can connect various “live data,” can connect the full-chain digitalization of F2B2b2C, and achieve full-scenario reach. Therefore, enterprises need to choose a suitable service provider as a long-term partner to jointly advance digital construction.
4. Implementation Steps
Five-code integration is the infrastructure for channel digitalization. Enterprises can complete the five-code integration digital transformation upgrade of products in five steps, and based on five-code integration, achieve the transformation and upgrading of channel digitalization.
Step 1: Generate batch codes according to multi-level packaging products, and complete coding of bottles, boxes, and pallets.
When brands formulate product production batches, they generate corresponding batch code packages in the system backend according to the bottle-box packaging ratio.
Provide the inner and outer cap code packages of the primary packaging products to the bottle cap factory for coding. Mainstream domestic bottle cap factories have the capability for inner and outer cap coding, and the industry chain is mature. After coding, deliver the bottle caps and inner and outer cap association data to the brand factory. Provide the inner and outer box code packages of the secondary packaging to the carton factory for printing. After coding, the carton factory delivers the cartons and inner and outer box association data to the brand factory.
Most traditional FMCG products can refer to the above bottle-box-pallet three-level packaging structure for product packaging coding.
Miduo's one-product-one-code 4.0 divides code specification types into single code, same-level code, and hierarchical code. Single codes are used for single-level packaging coding, for code generation configuration in single-activity scenarios for consumers/promoters/stores, and support one code for multiple uses. Same-level codes can call any two batches of single codes for combination, used for code generation configuration in scenarios such as bottle cap inner and outer codes, box inner and outer codes, or associated promoter codes. Hierarchical codes can call any multiple batches of single codes or same-level codes for combination, used for code generation configuration in scenarios such as multi-level packaging labeling, associated sell-through, or five-code integration. By turning codes into “building blocks,” flexible combinations are supported, achieving the “72 changes” of codes, meeting the coding needs of various product packaging specifications.
Step 2: Perform data association collection of bottles, boxes, and pallets on the production line to complete five-code association.
According to the customer factory's production line situation, five-code association has three collection and association modes.
The first is the pre-association mode. Enterprises print labels with pre-associated relationships in advance, and on-site production is done by manual label pasting. After label pasting, data accuracy is verified. This pre-association mode is suitable for enterprises with low production line speed requirements and low budgets.
The second is the post-association (online collection) mode. This requires upgrading the production line, installing industrial cameras and product rejection equipment. Bottle, box, pallet, and multi-level packaging are automatically associated and collected by production line equipment without excessive manual intervention. This is the mainstream association mode adopted by most enterprises.
The third is the post-association (online coding and collection) mode. In this mode, the system first generates respective code package data files according to each packaging level (e.g., bottle, box, pallet). During product production, coding equipment (industrial computers, coding devices, industrial cameras, rejection devices, etc.) automatically completes packaging coding, and the “coding collection and association system” completes the association and binding of data and physical objects.
This mode can achieve integrated coding and collection, with higher costs, suitable for enterprises with high production line speed and sufficient budgets.
Step 3: Products are scanned level by level for shipment, realizing online product flow.
After products are sealed and produced, when palletizing in the factory, workers use handheld PDA devices to scan the outer box code to complete the collection and association of the entire pallet's box codes and automatically generate a virtual pallet label. This way, warehouse inbound and outbound only need to scan any outer box code on the pallet to complete the entire pallet shipment, improving shipment efficiency.
During product circulation, distributors and stores scan codes through mini-programs to complete product receipt, realizing online product flow.
However, in the process of channel digital transformation, only the digitalization of “goods” is not enough. People are the core carrier of business and the ultimate target of transactions. Therefore, the digitalization of “people” is also needed. After products complete the “five-code integration” digital coding transformation, they possess digital capabilities. During circulation, channel relationships are quickly established based on product flow, establishing a “3+2” multi-role account system for the enterprise. At this time, a “channel router” is needed.
A “channel router” can be simply understood as an infrastructure platform for the industrial internet. Based on “connection-distribution” infrastructure services, it connects brands upward and reaches channels downward. Distributors, salespeople, stores, and promoters only need to connect to the channel router once to participate in various marketing activities of various brands through the New Distribution Assistant, Universal Retail Assistant, Gold Promoter, and Business Helper mini-programs.
While effectively connecting various channel roles, it efficiently distributes business flows and activity flows through data intelligence.
Step 4: Design sales expense rebate ratios and activity strategies.
All marketing scenarios rely on the intersection of channel relationships and product flow. After building product flow and channel relationships through the two infrastructures of five-code integration and the channel router, enterprises can carry out various online marketing activities.
Before launching marketing activities, enterprises need to reallocate some predetermined TP and CP expenses, such as distributor quarterly achievement rewards, store ordering incentives, display expenses, tasting, and banquet activity expenses, based on the new five-code association rebate model, without changing the overall sales expense budget.
This ratio setting is a test of the brand's operational capability. If the post-rebate ratio is too large, distributors will not accept it; if too small, it will not provide effective incentives.
In the design of activity strategies, it is necessary to consider the brand's actual product flow, sales model, consumer behavior, and other factors to set relevant rebate trigger nodes and strategies.
This step can first select some category SKUs and some regional markets for pilot testing, and make dynamic real-time adjustments based on the pilot situation. First trial and error, then trial and right. After the model is proven, gradually expand categories and replicate to the national market. Throughout the process, Miduo, based on 10 years of practical experience serving more than 3,000 brand merchants, will provide rich landing operation service support to help brand merchants achieve the best landing results.
Step 5: Data empowerment, continuous optimization of marketing activities.
Through the Miduo EBC system, enterprises are empowered to collect full-chain data, realizing the datafication of all business. Through data cleaning, processing, and extraction, data assetization is achieved. Through unified data modeling and algorithm engines, multi-dimensional data analysis is output to assist enterprise business decisions, and provide data insight services for precision marketing and deep user operation, realizing the businessization of data assets.
Application Value of Five-Code Integration
1. Clear Control of Product Flow
Through five-code association + channel BbC associated rebates, terminal store bC linkage incentives, and other marketing empowerment, online product flow is realized. Through product flow direction, flow volume, flow speed, and other data, channel product inventory and shelf age are mastered. With terminal and consumer code scanning, big data channel conflict warnings are achieved, ensuring the stability of the goods market.
2. Online Management of Channel Relationships + Refined Operation
Realize online connection of F2B2b2C full-chain users and user data accumulation, providing brands with user insights (profiles, tags) and precision marketing empowerment, greatly enhancing brand loyalty.
3. Promotional Expenses Directly Reach Terminals
Users at all channel roles scan codes to directly participate in marketing activities. Promotional expenses directly reach terminal users, avoiding channel expense interception. Expense reach rate increases from 50% to 99%.
4. Improve Marketing Efficiency in Deep Distribution Channels
With the help of five-code association + EBC system, offline scenarios are accurately restored, and original marketing scenarios such as purchase incentives for various roles, performance rebates, and display rewards are restored online, greatly improving marketing efficiency.
5. Real-time Control of Sell-through Data, Empowering Precise Decision-making
Real-time control of national terminal sell-through data, inventory, and shelf age data empowers precision marketing and scientific management of regional business, assists sales decisions, and provides precise support for production-sales coordination.
6. Connect Internal Systems, Break Down into Parts
Currently, most FMCG companies deploy SFA, TPM, and DMS systems as separate projects. Terminal networks are mainly collected by salespeople, data is heterogeneous, and TPM data is manually entered. Distributors, stores, promoters, and consumers cannot autonomously contribute real-time dynamic “live data.”
These systems are essentially information systems, and data between systems is not interconnected, forming data silos. Departments operate independently and cannot produce effective collaboration. This not only fails to achieve digital-driven business growth but may also cause internal friction and reduce efficiency.
However, Dongpeng Special Drink's SFA, TPM, and DMS are all built based on effective terminals connected through the “One Yuan Exchange.” Therefore, it is easy to extract dynamic real-time business indicators. For example, terminal sell-through rate: Dongpeng Special Drink uses scanning the box code to open the box + several bottles in the box scanned by consumers to open the bottle. This business indicator requires bottle-box association to be achieved.
Therefore, without channel digitalization based on five-code integration, and without “product digitalization” as the starting point to collect “live data,” systems such as SFA, OMS, TPM, and CDP are rootless. Enterprises must focus on the smallest digital unit: thoroughly solve the digitalization of “goods,” make “product flow” clearly traceable through “bottle, box, pallet” association (five-code integration); fully connect the digitalization of “channels,” establish three-dimensional “channel relationships” through “bC integration.” On this basis, establish a unified account ID and collect real-time dynamic “live data” to truly enable SFA, OMS, TPM, CDP, and other systems to integrate, achieve data interoperability, and break down into parts. Only then can such digital applications realize value.
7. Turn Weak Store Relationships into Strong Operations
Resources invested by manufacturers in terminal stores are not the stores' due profits, but fees entrusted to terminal stores for consumer operation work. In the value chain distribution system, this money should be actually spent. It is a fee entrusted by the manufacturer to the terminal store to strengthen relationships with consumers based on trust.
This is bC integration, the logic of operating C-end around b-end. Elevating terminals from a purely transactional function to a function integrating cognition, transaction, and relationship, achieving bC integration and manufacturer-dealer collaboration, is the key issue for FMCG companies to break involution and achieve counter-trend growth.
In the past, when enterprises wanted to deeply cultivate terminals, they found that with the existing sales team, they could only connect and cover less than 20% of terminal mom-and-pop stores. The remaining over 80% of small stores either had distorted data in original management systems and could not be connected, or manual coverage costs were high (low per-person output). The brand was far from terminals, beyond reach. Many brands could only sigh and remain in a weak relationship with terminal stores for a long time.
After Dongpeng Special Drink completed channel digitalization through “five-code integration,” Dongpeng achieved dynamic tracking of the entire product lifecycle. From production, outbound, distributor inbound/outbound, terminal inbound, sales, and verification, the entire chain is connected. Channel data is uploaded in real time, transparent and traceable. It can also classify channels and grade terminals based on data, conduct refined targeted operations, and plan corresponding market activities based on scanning situations of different channels and terminals, empowering terminal sell-through.
With the help of digital systems, through “One Yuan Exchange” + Dongpeng Merchant Assistant, Dongpeng achieved connection of 3.5 million+ active terminal small stores, successfully turning weak store relationships into strong operations. These 3.5 million terminal small stores have become Dongpeng's “nuclear weapon” for business growth. Benefiting from this, Dongpeng's market value has repeatedly hit new highs in recent years. Dongpeng's digital transformation has become the best practice case in the FMCG industry.
Therefore, in recent years, leading brands have begun to pilot bC integration in terminal mom-and-pop stores, including brands such as Mengniu, Yili, Yanghe, Wuliangye, and Jinmailang.
8. Achieve Business Innovation and Drive Business Growth through Digitalization
All marketing scenarios rely on the intersection of channel relationships and product flow. After digitalizing channel relationships and product flow through five-code integration, enterprises can achieve digital innovation in marketing activities. For example, banquet activities in the baijiu industry typically contribute more than 30% of sales for mid-to-high-end baijiu brands. In the past, baijiu manufacturers assessed the “opening rate of banquet activities”: after the banquet host reported the banquet, they often received more than used, claiming the promotional expenses. Without five-code integration, this problem could not be solved.
After achieving five-code integration, this problem is easy to solve. Banquet activities give rebate gifts based on the scanning rate of each event. The promotional policy differs based on the reported amount of banquet liquor. But to enjoy gifts after receiving liquor, the opening rate must be assessed.
With the help of five-code integration to digitalize banquet activities, not only can the business indicator of “activity opening rate” be solved through code scanning, but also the development of banquet activities can be solved. Taking wedding banquets as an example, the host is a KOL (called “席总” in northern rural areas, “执事” in the south). Weddings basically need to be discussed with them. After digitalizing banquet activities, through the EBC system, KOLs can be precisely connected, and through banquet pending unlock gift coupons (according to different banquet policies, prizes can be flexibly set, such as gift coupons or pending unlock red packets), KOLs are pre-locked. Driven by interests, KOLs will actively mobilize resources around them to recommend banquet hosts to purchase the brand's liquor.
In this way, the assessment indicators for salespeople are also simple. They are assessed based on the number of KOLs expanded and the number of banquet events recommended, which is precise and effective. Through digitalization, business innovation is achieved for traditional banquet activities in the baijiu industry, driving business growth through digitalization.
The above is just a simple example. Based on five-code integration, various marketing digital activities can be carried out, such as channel BbC associated rebates, Bb associated rebates, store bC associated sell-through, promoter bC recommendation rebates, display rewards, N-yuan exchange, and other traditional promotional activities. All can be redone in a digital way, achieving business innovation and driving business growth.