In late October, China's Q3 economic data was released, showing improvement in both total retail sales of consumer goods and service consumption. However, looking at various FMCG brands in Q3, the situation remains mixed—some are thriving while others struggle.
For major FMCG manufacturers and distributors, the first year-end after the pandemic holds different significance. How can they stabilize existing business, explore incremental growth, seize the final opportunity to identify and fill gaps, and win the year-end battle?
Based on past experience, I'd like to share some thoughts using the beverage industry as an example, hoping to provide some inspiration to manufacturer and distributor friends.
Align Goals, Rational Rewards and Penalties
Stabilize Price System to Protect Profits
(1) Case: As a distributor for a certain brand for many years, Lao Zhang found this year particularly tough. By October, his annual sales progress was only 70%, nearly 10% behind the same period last year. Whenever the manufacturer's regional manager asked for payment, he felt resentful. This year, market sell-through was poor, inventory remained at over 3,000 cases for months without decline, and his market was frequently disrupted by cross-regional goods. Lao Zhang's state of mind was basically losing confidence in achieving the annual sales target.
(2) Problem Analysis: At the beginning of the year, when the pandemic restrictions were lifted, many manufacturers had overly high expectations for the market, but many customers' confidence kept declining, and consumption did not recover as quickly as expected. If manufacturers fail to reach a consensus with customers on goals, address their problems, and provide quality assistance during the sprint phase, the result will inevitably be a lose-lose situation for both manufacturers and distributors.
(3) Solutions: 1. Seek consensus. The manufacturer should take the lead and hold a joint sprint mobilization meeting in early November. Focus on three major topics: reviewing business to let customers voice their pain points, inventorying manufacturer and distributor resources and interpreting marketing plans, and jointly clarifying minimum and challenge targets. This is the first step before sprint work begins—putting problems on the table, with manufacturers showing attitude and customers participating, which also builds confidence.
2. Stabilize morale. During the sprint, inventory pressure is inevitable. To survive (complete sales tasks), some sales personnel colluding with customers to dump goods at low prices is a major taboo. If the price system is not maintained, it directly harms customers' interests and enthusiasm—the more payments collected, the more losses. Manufacturers must take decisive measures, strengthen penalties for cross-regional dumping, reassure customers, and protect the price lifeline.
3. Benefits first. Competition among manufacturers for customer funds intensifies at this stage. This year's year-end incentives should be front-loaded, and the "first quarter red" (good start) should be fought together with the year-end battle—don't wait until December. Be sure to calculate this account clearly for customers, making them feel that keeping money with you is the best choice.
Data First, Benchmark and Compare
Identify Shortcomings and Fill Weaknesses
(1) Case: During the business review between Lao Zhang and the manufacturer, Lao Zhang repeatedly emphasized that his market sell-through was poor, all outlets were declining severely, and sales targets should be significantly reduced. However, the manufacturer's personnel did not quite agree with such a general statement, and communication reached an impasse.
So the manufacturer shared a data table with Lao Zhang, analyzing the distribution situation of outlets in Lao Zhang's regional market by channel and level, helping him gain a clearer understanding of this year's distribution in his market.
Looking at the data, the manufacturer's sales personnel continued to introduce the management requirements and resource investments for various types of markets this year. Only then did Lao Zhang realize that execution on the ground was often disconnected from strategy. What he heard daily was salespeople reporting difficulties and urging payments, and he lacked detailed process control over his team and market.
(2) Problem Analysis: Distributor bosses who manage superficially and rely on hearsay can easily become disconnected from manufacturer management requirements. When manufacturers and distributors do not synchronize their understanding of marketing requirements, market opportunities are missed. The manufacturer's data analysis and strategy advantages, and the distributor's local resource advantages, cannot be maximally integrated and leveraged.
(3) Solutions: 1. Assess the current situation. Before the final sprint, manufacturers and distributors need to fully share and correct sales data. The manufacturer should lead a multi-dimensional analysis of sub-market sales by wholesale, channel, and outlet count, with month-on-month and year-on-year comparisons. At the same time, both parties should jointly visit the market to inspect the implementation of marketing strategies and identify the true regions and reasons for sales decline.
2. Observe competitors. Together, manufacturers and distributors should survey the sales situation of major competitors in the local market. Is it promotions? New products? Resources? See what competitors did right and wrong, and which positions were lost.
3. Organize problems. Based on the above data analysis and market visit diagnosis, comprehensively list the problems causing current sales decline by dimension—channel management, channel execution, resource investment, market promotion, etc. Identify what has not been implemented and what needs to be quickly reclaimed from competitors.
Problem-Oriented, Prioritize Major Issues
Address Urgent Matters First, Then Less Urgent
(1) Case: Lao Zhang visited the market with the manufacturer's marketing director, Mr. Wang, and found many problems. How should they start solving them? Lao Zhang suggested that Mr. Wang first provide some funds for channel promotions, push his warehouse inventory to secondary customers, have sales personnel replan routes and execute daily visits, and then give more resources for distribution.
Mr. Wang held a different view, telling Lao Zhang that the most urgent issue was the price system problem on his side. Secondary customers had lost the willingness to stock up. If you give more resources at this time, the market is not far from collapse. We must first stabilize the price system so that customers at all levels can profit from selling this product—that's the most critical. I suggest first cutting off supply to the wholesale market for half a month, investing in channel resources, and prioritizing channel resources in core markets where the price system is stable.
(2) Problem Analysis: When manufacturers and distributors face problems together, different positions lead to different approaches, but the ultimate goal is a win-win. However, it must not be that manufacturers approve resources and customers stock up. Should distributors quickly transfer risk and start anew, or fundamentally solve problems and gain a new lease on life? This requires unifying principles in handling, brainstorming together for the long-term healthy development of the market.
(3) Solutions: 1. Grasp the key. Market problems are numerous. In the short sprint phase, to quickly reverse the situation, both parties must firmly grasp the core problem of the current market. For example, in the case, the continuous sales decline, after analyzing many reasons, the most important was the chaotic pricing in the local wholesale market, damaging customer profits. If this problem is not solved, the market has no push, and customers at all levels are unwilling to stock up. Severely punishing and cutting off supply to customers who dump goods is the most powerful penalty.
2. Prioritize. Problems should be handled with a sense of urgency and priority. During the sprint, it is also necessary to quickly resolve legacy issues in core channel stores. For positions seized by competitors, resources should be tilted to quickly reclaim them. Finally, adjust sales personnel route planning and improve KPIs like visit completion rates.
3. Be assessable. Solutions must be quantifiable and implementable by sales personnel, and assessable—not just a slogan.
Festival Inventory, Front-Load Resources
Set Standards, Emphasize Incentives
(1) Case: In November, the weather turns cold, and beverage sales enter the off-season. Despite the market analysis by the manufacturer's marketing director, Mr. Wang, Lao Zhang still felt uncertain about achieving the sales target.
Mr. Wang took out a one-page plan from his pocket and said, "Lao Zhang, don't worry, take a look at this." The plan detailed local city, county, and village market folk festivals, including population analysis for these festival activities, associated the most suitable SKUs for each consumption scenario, and included market promotion schedules and resource investment budgets. After reading it, Lao Zhang couldn't help but admire this brand's sales director.
(2) Problem Analysis: During the sprint, the most important thing is to establish high ground for rapid distribution of many products, enabling customers to "reduce inventory and dare to stock up." Many visible sales opportunities are seen by all manufacturers, but they are also the most competitive. There are also many invisible sales opportunities that require careful exploration. Manufacturers should help customers shift their sales mindset, deeply cultivate the market, and truly open up and penetrate their markets.
(3) Solutions: 1. Expand thinking. Currently, consumption is sluggish, and local governments are strengthening their role in guiding consumption. Themed activities such as historical culture, folk culture, food specialties, night shopping, and night tours are emerging everywhere. Brand manufacturers should actively integrate and participate, making business work flexible and promotional. This helps distributors quickly distribute inventory while building strong brand awareness.
2. Tilt resources. Manufacturers and distributors should fully inventory existing resources and focus money on activities and stores that truly drive distribution. In the last two months, avoid casting a wide net; invest where production occurs. Additionally, manufacturers can design product gift boxes or handle packaging suitable for various sales scenarios for distributors to increase average transaction value.
3. Provide incentives. On top of normal salary and performance, launch special incentives, such as special programs for festival promotions and distribution, community store stack displays, with per-case commissions. More work, more reward, fully stimulating employee enthusiasm. The simplest and most direct incentives are often the most effective.
Channel Linkage, Atmosphere Creation
Set Benchmarks and Role Models
(1) Case: Following Mr. Wang's deployment, Lao Zhang seized various distribution opportunities in lower-tier markets, and inventory dropped by more than half in half a month. With the manufacturer's control over price-disrupting secondary wholesalers, terminal stores' willingness to stock up began to fully recover.
Lao Zhang and his sales team gained confidence. At this time, Mr. Wang invited Lao Zhang to visit a neighboring city together to inspect the market. Mr. Wang said, "Each market has a different foundation, but at the sprint stage, what should the sales atmosphere look like? Let's visit a model market today and see what more we can do."
So under Mr. Wang's guidance, Lao Zhang visited model streets, model stores, and model township markets in the excellent market, saw a strong sales atmosphere, and participated in channel ordering meetings and core terminal ordering meetings. After a few days, Lao Zhang couldn't help but give Mr. Wang a thumbs up. A leader who unifies knowledge and action is the greatest asset for distributors.
(2) Problem Analysis: The final stage of the sprint must be a comprehensive pull-up of the sales atmosphere. From terminals to channels, seeing the manufacturer's management attitude and promotional intensity, customers at all levels gain confidence, and products gain a combined push-pull force. At this time, it is essential to rapidly build momentum and atmosphere, overpowering competitors in consumption scenarios.
(3) Solutions: 1. Emphasize atmosphere. Conduct merchandising competitions among sales personnel, competing on in-store and out-of-store posters, fence stickers, price tag usage, and stack displays. Develop differentiated standards based on channel and outlet level—large stores get large packaging, small stores get small packaging. For stores in locations with crowds, such as market days or new store openings, do brand promotion, such as store sign production, large umbrella placement, and wall advertisements.
2. Create linkage. Year-end ordering meetings are essential. Invite influential customers to attend and share their business experiences on stage. Create a sense of ceremony, reflecting the manufacturer's thoughtfulness and sincerity. Don't just make it a meal with lucky draws and casual chat; be more attentive in details than competitors.
3. Set benchmarks. Recognize sales personnel who perform well during the sprint and channel customers who fully cooperate, giving material rewards. Commend them at the company's mid-year meeting, and let other customers in the region see it.
In the era of stock competition, whether considering marketing costs or sustainable business development, it should be to seek stability first, then growth. The territory once conquered must be defended to the death. For market incremental opportunities, fully stimulate the determination of the manufacturer and distributor teams to move forward to better grasp them.
In the final sprint, first solve legacy market problems, clear various obstacles, and let manufacturers and distributors leverage their respective advantages. Manufacturers give customers confidence, customers reassure manufacturers, and at the same time, provide customers and teams with incentive intensity that is higher than competitors and achievable.
Author: Xing Renbao, with 14 years of marketing management experience, has served at Coca-Cola, Yili, Red Bull, and other well-known FMCG companies, focusing on corporate marketing diagnosis, manufacturer-distributor relationships, channel operations, and digital transformation.