As a fast-moving consumer goods, the gross profit of the product can not support the depth of this cost, even if some well-known brands rely on dealers to do the market.
Although deep distribution enables enterprises to control channels, they have great autonomy in market promotion and price control, and can control the market more effectively. But there are a lot of problems that are difficult to overcome in the middle. The mere expectation depth to develop the end result of the market is not worth the candle. Therefore, deep distribution can only be used as a tool. After use, it will be collected and avoid becoming a burden.
There are a few issues with deep distribution:
1, the cost is too high
The initial investment cost of deep distribution is quite high, and the post-maintenance cost is also a considerable expense, unless the product's single profit and sales volume can be guaranteed. So in general, only companies with sufficient strength and industries with sufficient profit margins will adopt this approach.
Self-built terminals, especially for the fast-moving consumer goods industry in the low-profit state, coupled with the oversupply market environment, it is not a simple matter to reach the break-even point. These will bring potential crisis to the company.
2. Channel conflicts. The practice of deep distribution has affected the survival of other dealers. The root of the conflict lies in the competition between enterprises and distributors for control of channels and terminals, leading to the outbreak of channel panic. So everyone unites against the business. This kind of conflict is irreconcilable, because there are interests in it, and the self-built terminal is facing a lot of crisis.
Enterprises are slightly careless, dealing with the relationship between channels, or attempting to replace the original channel model with deep distribution, while small leads to continuous channel conflicts, which may lead to channel shocks. In this case, the muzzle is not external, but is consistent, which in turn creates civil strife.
3. Sales volume is difficult to increase rapidly. I think that I have to do better than the dealers. As long as I have deep distribution, I will be able to increase sales significantly. It is often just a wish. These dealers will promote new products or walk through the long-term network construction and accumulation. And when enterprise personnel go to build channels and terminals, they must establish a relationship of trust and cooperation with the terminal, which is not something that can be completed overnight. In fact, many companies have spent a lot of money on deep distribution, the sales increase is very limited, and the company is also very tired.
4. The company's management also puts forward higher requirements. In addition to the rapid expansion of the personnel team and the increased management difficulty, the operational capability is also required to be improved. All kinds of factors are combined. If the loopholes are too large, they will lose money, and they will lose money and lose some people.
How can we get better and avoid the effects? The use of deep distribution as a channel, as an important means for enterprises to open up the market, is a very powerful weapon. If used properly, it can do more with less.
Deep distribution has several functions:
First, combat competitive brands. The spokespersons of local competitive brands are local distributors. Enterprises can concentrate on these dealers and compete for the core markets of these dealers. The strength of dealers is no longer likely to compete with enterprises, and it can be effective soon.
Points to note:
1. It is necessary to work closely with your own dealers to avoid joint sings and to concentrate on each other.
2. The terminal that has been robbed should be used as a prize for the dealers of their own, and encourage their dealers to fight and promote their products.
3. This program can only be carried out in a short period of time and cannot be sustained, avoiding civil strife and conflict of interests at that time.
Second, support dealers. Cooperate with dealers to develop the market, for dealers with smaller scale and high loyalty to manufacturers. Enterprises can use the deep distribution method to help dealers become bigger and stronger. Once the dealers develop, they will have high loyalty to the company.
Enterprises create value for dealers as the core concept, make full use of the existing funds, network and logistics of dealers, and guide and help dealers to become stronger and bigger on the basis of controlling market dominance. As an effective supplement and adjustment of the conventional channels, self-built terminals fully exert their role in brand promotion and reform, and the two are effectively integrated and complementary.
Points to note:
1. The company treats the dealers as partners in cooperation and treats them equally, and provides assistance in the weaker dealers.
2. Assist dealers as the ultimate goal of deep distribution and avoid conflicts with dealers
3. The developed terminal is given responsibility and service according to the actual situation of the dealer.
4. The team responsible for channel construction can be unified under the leadership and command of the dealer.
Third, hold the dealer. To gain competitiveness, it is essential for companies to fully utilize their resources and dealer resources to operate the market. When you encounter a dealer who is relatively strong and does not cooperate, it is necessary to adopt a trick. The use of the strength of the enterprise to contain the distributors, and ultimately promote the dealers to increase cooperation with the enterprise, and increase the enthusiasm of promoting products.
Points to note:
1. Dealers who do not cooperate can be put aside, and the use of deep distribution terminal development to assist those dealers who are more loyal and obedient to grow and develop is a threat in itself.
2. For the market of dealers that do not cooperate, the strength of deep distribution of enterprises should be strengthened as a kind of containment and supervision.
3. The above method is only a gesture. When the unmatched dealer becomes compatible, the method of deep distribution can be cancelled or weakened.
Fourth, make up for the market gap. For some markets that are more difficult to develop, dealers are reluctant to enter, and companies can adopt deep distribution methods. Make use of the team with strong execution ability, put in place the policies and plans, and make the market improve and then hand it over to the dealers. Points to note
1. This kind of market development is targeted, and it is not allowed to bloom everywhere, increasing marketing costs and management costs.
2. After the development, even if the deep distribution is completed, the transfer to the dealer can avoid the rapid expansion of the cost and the management of the loophole.
3, this market development can be part of the pre-market advertising investment, this form is much stronger than the market advertising.
Fifth, promote new products. If the company promotes a high-end product with a relatively high price, the dealer is not willing to distribute it because of certain market risks. At this time, market development can be carried out through deep distribution. With a certain profit margin, once this form of development is successful, the company can retain it for a long time as a source of profit.
Precautions:
1. Allow some space in the market operation as an input for deep distribution.
2. Team building is the key to the success of this deep distribution
3. Don't hand over to dealers who don't have the same consumer terminals as the product, otherwise they will make the whole market worse.
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