Sales channel models of beverage industry

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Coca cola, the world’s most successful beverage company, leads the standard operation of beverage marketing all over the world, and achieved tremendous sales performance over the past century.

The sale channel model that a company adopts concerns its existence and development in the fierce global competition.

beverage industry

Nowadays, there are various sales channel models in the beverage market. New companies and tricks emerges continuously, but there are more failures than successes. As observed by Professor Lu Taihong, marketing channel is a decisive factor for success, but it is a mess with the most variations.

Here I’d like to introduce the major 4 sales channels of beverage business.  They are factory direct sales, network sales, sales by platform, farmers’ market Radiation. 

Factory direct sale

This model is represented by coca cola and Sanzhu group.

Direct sales applies to city operation and the places where company can directly affect. It has strong marketing ability and control on price and logistics.

Advantages: the shortest channel; the fastest reaction; timely service; stable price; effective promotion; active control.

Disadvantages: direct sale is confined to cities where transportation is convenient and customers are intensive. It cannot cover many places where the investment is high and the management is difficult.
factory direct sales

Network sales

This model is represented by Wahaha and Tingyi coperation.

Network marketing is suitable for mass products, which can cover rural and small-medium cities market.

Advantages: network marketing can save you large amount of manpower and material resources. Wide sales scope and strong penetrability. The rights and obligations of each grade is clear. They can build a price alliance for the same interest, get their own profits by cooperation with others.

Disadvantages: network marketing may give rise to price confusions and cross region sales. It requires intelligent manager to organize every department, or the company may response slowly to the market changes.
network sales

Sales by platform

This model is represented by Shanghai Suntory beer and Pepsi.

Sales platform is suitable for large cities where the consumption is intensive, the service is comprehensive and customers welcome new things.

Take Shanghai for example. It covers an area of 580 square kilometers, with more than 13 million civilians, and 40 thousand retail terminals. If we set up about 80 agencies, they can form a huge logistic platform, with each dealer in charge of several streets and stores. By this mean, they can realize home delivery and deep distribution.

Advantages: the responsibilities are clearly and strictly separated; the service circle of each agency is small (radius of 3-5 kilometers); timely delivery and comprehensive service; steady marketing network; less likely to be affected by cross region sales; fine operation and deep distribution.

Disadvantages: sale platforms are confined to regional market. It requires the manufacturer to deliver products directly, and more staffs to cooperate.
sales platform

Radiation from farmers’ market to surrounding

In underdeveloped rural areas where the transportation is not convenient, farmer’s markets still have some influence on the neighbor areas. Through the farmers’ markets, beverage market can expand to larger rural areas.

Advantages: free flow under no regulations; not restricted by administrative regions; flexible operation; small profits but quick returns; wide varieties; easy allocation of cargos; strong radiation.

Disadvantages: organized casually, without regular customers or network; attract customers with low price, easy to fall into unhealthy price competition; no conscious of deep service.
farmers' market radiation

In my opinion, companies engaged in beverage business should make certain the basic models of sales channel, and analyze the internal and external environment, as well as your competitors. You are certain to figure out the most effective model. It is also feasible to combine several sales channels together to adapt to wider markets.

If you want to engage in beverage business, or have interests on beverage production, please feel free to send us inquiry. TICO is a professional fruit juice machinery and production line manufacturer and supplier in China. We are able to provide customized solution according to your situation.

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