tiebreaker third terminal

For people in the fast-moving consumer goods industry, it is generally customary to divide terminals into A, B, C, D stores and other types according to parameters such as area and effective bank. This classification has problems such as simple arbitrariness and poor enforceability.

The author has been engaged in the marketing practice and management of fast-moving consumer goods for more than 8 years, and believes that the management of the terminal should "focus on the big and focus on the small". Starting from the industry characteristics of fast-moving consumer goods, it is more practical to divide the terminals into three categories.

The first terminal refers to international chain stores and domestic cross-regional chain stores, the second terminal refers to local shopping malls and supermarkets, and the third terminal refers to local convenience store type supermarkets other than the first and second terminals. Community convenience stores, mom-and-pop shops, village shops, bazaar stalls, hotel specials, etc.

Pay attention to the third terminal

If blood vessels are used to describe the sales channel, the third terminal is like the capillaries in the body, the network is huge and spreads all over the body.

For fast-moving consumer goods, whether it is a well-known brand or an emerging brand, in order to expand the market, it is an unavoidable problem to do a good job in the third terminal. Although there may still be differences in the industry's current understanding of the third terminal, they are generally optimistic about its development speed and market size.

The vast market space, market size and market potential of the third terminal are extremely attractive to every FMCG company. However, the characteristics of the third terminal determine the difficulty of expanding this market.

Characteristics of the third terminal

High price elasticity The biggest market characteristic of the third terminal is the high price elasticity, that is, the consumer group is very sensitive to product prices. Product price positioning is basically low-end. Enterprises should conduct a comprehensive and systematic investigation and research to locate products with reasonable prices.

Strike the third terminal market. Reasonable pricing is an important factor in winning the market initiative.

The second and third-tier brands are the main expansion of the third terminal. Enterprises need to find suitable products, not high-end brand products, but the brand's extension products.

Low barriers to entry As a distributor (supplier), the barriers to entry are relatively low. The requirements for the quality of employees are not high, the funds required are not much, and it is suitable for enterprises that are just starting out.

Complicated market conditions The third terminal market has large coverage, small batches, many batches, fast turnover, and difficult market maintenance. The management is not very standardized, the network is complicated, and the purchasing channels are chaotic. The market has large operational space, high flexibility, and important interpersonal relationships. No merchant can fully cover the third terminal of the resident.

Re-execute the sales of the third terminal fast-moving consumer goods after sales. The execution is more than the strategy. It is easy to start and relatively controllable.

The pros and cons of the expansion model

The unique consumer groups, consumption characteristics, regional characteristics, channel characteristics, etc. of the third terminal of FMCG determine the expansion mode of the third terminal.

Sequential expansion For big brands, it is necessary to first establish the market image of high-end brands, first strive to do a good job in the first and second terminals; and then develop low-end products suitable for the third terminal (marketing strategy of opening high and moving low) , taking advantage of the brand advantages of high-end products to drive the sales of third terminal products, in order to achieve full channel coverage.

For example, Colgate toothpaste, which entered the Chinese market in 1995, first adopted a high-end strategy, focusing on the first and second terminals; after the high-quality market position was established, it developed a low-priced product in 2002 (2 yuan/piece) ——"Family Portrait" toothpaste, so as to cover the vast third terminal.

From the perspective of the market, this move has not only enriched Colgate's product line, but also expanded its sales channels. Colgate's products have already covered the vast third terminal, and at the same time, it has squeezed the living space of competing products.

Reverse expansion For small brands with weak strength, first develop mid-to-low-end products, do a good job in the third terminal, and then develop high-end products and expand the first and second terminals when the conditions are mature. . However, this strategy has little market momentum and is not easy to succeed.

Hualong Experience

As a fast-moving consumer goods, the word "fast" is not only reflected in the fast demand of consumers, but also in the fast supply of manufacturers. The point of view of "grasping the big and letting go of the small" for distributors and "grasping the small and seeking the big" for the terminal market has become a consensus view in the fast-moving consumer goods industry.

Many manufacturers have realized the importance of refined marketing and are paying more and more attention to the development of the third terminal. The earliest and most effective fast-moving consumer goods companies in China to develop the third terminal should first promote Hualong instant noodles. Hualong instant noodles was born in 1994, and now it has occupied nearly 30% of the market for more than ten years, ranking second before "unification" and second only to "Master Kong". Such rapid development should benefit from Hualong's development of the third terminal.

As early as 1997, Hualong began to use the three-dimensional sales network to expand and build the third terminal network in depth. With the help of a network of 600 dealers across the country, Hualong has expanded 228,800 mom-and-pop shops, non-staple food stores and canteens in 12 provinces and cities, 146 regions or prefecture-level cities, and 794 counties or county-level cities in the north, covering a population of 596 million. , On average, there is one Hualong sales network for every 2566 people.

It only took 3 years for Hualong to establish a sales network of 1 million across the country, and it has become the largest, fastest and most controllable sales network system in the industry in the country. This huge third terminal The network maintains the healthy development of Hualong, and gradually establishes the market image of Hualong as "Mianba".

Let manufacturers be closer to consumers and closer

In summary, if fast-moving consumer goods want to quickly open up the market and stand firm in the market, they must quickly start the development and maintenance of the third terminal. The thrust of the channels at all levels, but also the pull of the third terminal. For fast-moving consumer goods, this is an era when the terminal is king, the terminal wins, and the terminal is decisive. Whoever wins the terminal wins the world! Please manufacturers to be closer to consumers!

This article is a contribution from the author.