Misunderstandings about distribution channels, channel design and management

We list the top ten common marketing management misunderstandings among Chinese enterprises and give corresponding "prescriptions". We hope that more enterprises can wake up from them and take active measures to save themselves, and immerse these into their skin as soon as possible. Root out the "cancer" and restore a healthy and strong body.

Myth 1: Marketing concept

[Symptom]: Enterprises that fall into this misunderstanding do not pay attention to marketing concepts, are not good at developing marketing concepts, do not work hard to cultivate marketing concepts, and do not actively guide people The marketing concept does not know how to update the marketing concept, and still clings to the old product concept, promotion concept, and sales concept.

At present, China's marketing competition is divided into three levels: the first level is marketing technology competition; the second level is marketing strategic planning; and the third level is marketing concept development. In the 21st century, competition in marketing concepts is the deepest and most advanced form of competition in corporate marketing activities. It is the essence and core of corporate marketing management activities. It is also a powerful tool for Chinese companies to participate in market competition. It determines the success or failure of companies to a certain extent. .

[Prescription]: The huge gap in marketing management between Chinese enterprises and multinational enterprises is concentrated in the gap in marketing concepts. The first task of Chinese enterprises is to make up for this "short board". First, they must implement Concept management of enterprise employees, through training and communication, establish modern marketing concepts that are customer-centered, competition-oriented, holistic marketing, and people-oriented, instill the marketing concepts established by the enterprise into the minds of employees, and integrate the enterprise's marketing concepts into the minds of employees. into the behavior and specific actions of employees; secondly, implement customer concept management, carefully study customer concepts and needs, and scientifically position marketing concepts, and strive to convey to customers through integrated image design and brand promotion marketing appeals to complete complex communication goals.

Misunderstanding 2: Blind faith in experience

[Symptoms]: Enterprises that fall into this misunderstanding are roughly divided into three categories: First, operators do not think carefully from the perspective of overall market development. "What kind of industry are we engaged in", so that the company's tasks are defined too narrowly, which limits the company's development; secondly, business operators are short-sighted and lack foresight in their business guiding ideology, and only consider the current short-term interests. and cannot see the long-term development of the enterprise; third, some particularly successful companies, their past successes have made them forget about the upcoming failures, only see themselves and know nothing about or turn a blind eye to the outside situation, and blindly believe in past successes. Experience will still be successful now.

Aiduo, which once occupied the second position in the national VCD market and was known as the most successful brand of home appliances in China, its flagship product VCD is considered to be a technology and industry that is about to be eliminated and is in a transitional period. After the changes in consumer demand, Aiduo is still stuck in high-spirited talks about how to plan new ideas and how to defeat its opponents. What is even more sad is that Aiduo has never formulated any form of strategic planning, but only relies on the passion of decision-makers. Killing, the result is that its success is sudden and its death is sudden!

[Prescription]: Continuously meeting the needs of consumers is the only way for today's enterprises to survive and develop. This requires enterprises to adhere to the marketing concept in business practice, in order to fundamentally overcome marketing myopia, avoid business errors, and enable enterprises to achieve long-term survival and development. At present, there are still many companies, especially those with famous brands or "fist" products, that are still attached to the high-quality famous brand products they have created through all kinds of hardships, and hold on to old business methods and old-fashioned concepts; there are also some From a formal point of view, enterprises seem to have introduced new business concepts, and slogans can be seen everywhere. However, they cannot implement the new concepts well in their business practices, and their behaviors are still dominated by traditional concepts. As a result, corporate marketing myopia has resulted in Business operations are in trouble, or even lead to business failure. These should attract our great attention to avoid the emergence of marketing myopia.

Myth 3: Strategic Management

[Symptoms]: Enterprises that fall into this misunderstanding suffer from a kind of "short-sightedness" and "restlessness": emphasizing tactics and ignoring strategy; Emphasis is placed on ingenuity over tactics; emphasis is placed on the present rather than the long term.

These companies either believe that strategy is empty, long-term, and useless, and that only tactics and short-term benefits are practical, effective, and direct to the company; or that senior managers and marketing managers are too busy with work and have no time for marketing. excuse on the grounds of strategic planning.

In marketing management, strategy is "choosing the right things to do", while tactics is "doing things right". Enterprises such as "Giant", "Flying Dragon", "Chundu", and "Asia" that were once famous all over the country later failed. Their failure was not a tactical failure, but a strategic mistake.

[Prescription]: At present, my country's marketing has entered the stage of marketing strategy competition, and the use of any marketing tactics must be based on marketing strategy. Marketing strategy includes market research, market segmentation, target market selection, market positioning and competitive strategy selection. Marketing tactics refer to product, price, distribution, promotion, etc. Enterprises must correctly handle the relationship between marketing strategy, marketing sub-strategies and specific behaviors of marketing personnel. Without the strategic planning of the marketing division, the strategic management of the marketing headquarters will be difficult to achieve the expected goals. Secondly, for marketers, although their marketing behaviors are often short-term profit-oriented, if the company cannot encourage more marketers to establish long-term concepts and overall awareness, the strategic value of the company will be greatly damaged.

Myth 4: Brand Management

[Symptoms]: There are two types of companies that fall into this misunderstanding: One is to sanctify and complicate the brand, thinking that building a brand is something only big companies can do. The second thing to consider is that building a brand requires a very large investment. Small businesses have no strength and do not need to build a brand. Second, they blindly emphasize the increase in sales and regard product sales as the biggest goal pursued by the company. They believe that doing sales means doing business. Brand, as long as sales increase, the brand will naturally be improved.

[Prescription]: Another misconception that Chinese companies need to overcome is: building a brand means building sales. In fact, to build a strong brand, one needs to maintain healthy growth in sales volume and market share, and the other needs to focus on improving brand image and accumulating brand assets. Looking at some strong brands, they all focus not only on sales and market share growth, but also on brand infrastructure construction - the improvement of brand image and the accumulation of brand assets. Coca-Cola, Haier, etc. have always wanted both immediate and long-term benefits. ; It requires both sales volume and brand accumulation. Only such brands can dominate the market and remain prosperous. On the contrary, the one-sided pursuit of sales often leads to business personnel over-exploiting the market and "fishing for the best", causing great damage to brand reputation and brand loyalty.

Myth 5: Organizational Construction

[Certificate]: Enterprises that fall into this misunderstanding mistakenly believe that: First, the original sales organization of a single sales department (section) can also be very good. In order to fully undertake the marketing management functions of the enterprise and complete the sales tasks, there is no need to set up a separate marketing department; secondly, the sales department is more important than the marketing department. The marketing department spends money, while the sales department creates benefits, so the marketing department The role and status must be ranked below the sales department.

[Prescription]: Establishing a fully functional and efficient marketing organization is the prerequisite and foundation for ensuring the efficient operation of corporate marketing management work. Accelerating the construction of corporate marketing departments, establishing a market-oriented, scientific, reasonable and standardized operating mechanism, and re-constructing new corporate technology, culture and organizational structures are of great and practical significance to accelerating the process of corporate marketization. This requires enterprises to fully understand the importance and urgency of building a marketing department. Enterprises must speed up their liberation from the traditional sales model and carry out market-oriented operations at a high level, so that marketing work changes from passive to active, from decentralized to systematic, from artificial to scientific, and must establish a system that is compatible with the market economy. The operating organization - marketing department.

Myth 6: Channel Construction

[Symptoms]: Companies that fall into this misunderstanding believe that in China’s current special market environment of dispersed channels and backward distribution systems, “ "Channel is king", a company has everything if it has a huge channel.

These companies over-exaggerate the fact that China's market distribution system is backward and imperfect and the dealers' short-sightedness and short-term behavior. Especially with the rapid rise of new retail formats such as supermarkets and hypermarkets, they believe that there are a large number of good and bad products, and short-sightedness. It is more effective to integrate dealers than to skip dealers and build large overseas sales agencies and sales teams to shorten channels and directly operate terminals.

Sanjiu Pharmaceutical has established the "Sanjiu Pharmaceutical Chain Company" and plans to spend 1.3 billion yuan to build 8,000 Sanjiu pharmacies in three years; TCL plans to build a nationwide distribution network in five years a comprehensive retail network; Sinopec invested 25.1 billion yuan to acquire more than 10,000 gas stations; Master Kong has established more than 200 business offices across the country and vigorously promoted the "three batches of direct sales" plan for retailers and retail outlets to develop business . This practice directly leads to a significant increase in network operating expenses and marketing costs, an increase in marketing personnel, an increase in the difficulty of branch management, a reduction in distribution efficiency, and even breeding of branch corruption.

Haier has a marketing team of 20,000 people, Robust has more than 8,000 marketing staff, TCL has 7,000 people, and Skyworth has more than 4,000 people. The huge sales team has turned into a heavy burden for the company. Calculated at 30,000 yuan per person per year, Skyworth Group’s channel expenses alone are as high as 1.2 billion yuan per year. Lehua Color TV has 30 branches, nearly 100 regional offices, and thousands of sales staff across the country. The annual channel operating expenses reach more than 200 million yuan. The monthly operating expenses of a medium-sized branch are also 80,000 yuan. Around the Yuan Dynasty, this marketing model of crowd tactics became a burden for enterprises, and there was no profit at all.

[Prescription]: The Chinese home appliance industry, which cannot bear the burden of self-built channels, has launched a "channel downsizing" reform plan. Macro has completely eliminated branches. All dealers face the factory headquarters directly, and payment for goods is made directly. to the headquarters; TCL Marketing System laid off more than 4,000 sales staff; Konka is downsizing its marketing branches and merging a large number of branches. The channel reform of China's home appliance industry has given us this revelation: a highly efficient distribution system is a key asset of an enterprise. Enterprises need to attach great importance to the construction of distribution channels from a strategic perspective. They cannot blindly pursue big goals regardless of the actual situation and capabilities of the enterprise. They must act within their capabilities. , based on the company's own strength, scale and market characteristics, integrate its own advantageous resources with the social distribution system and dealer distribution system to establish an efficient distribution channel suitable for itself.

Myth 7: Promotion Management

[Symptoms]: Enterprises that fall into this misunderstanding have a one-sided understanding of promotions and insufficient or even wrong understanding of the role and effect of promotions: First, the understanding of promotions It is relatively one-sided and believes that promotion means sales with prizes or rebate sales; the second is to exaggerate the role of promotion and believe that promotion is a "panacea" that can cure all diseases, causing marketing departments and sales staff to suffer from serious "promotion dependence" , sales will drop as soon as promotions are stopped, and promotions can only be carried out year-round and indefinitely; third, there is no advance planning in promotional activities, and they follow the competitors, thinking that they can win as long as they are more competitive than their opponents; fourth, there is no overall promotion in promotions Budgets and management are out of control, headaches are solved, and even good promotional activities have become a burden and negative effects on the enterprise. These companies do not do a solid job in every aspect of the marketing management process. Instead, they place all their bets on promotion. Relying solely on promotional methods has continuously weakened the promotional effect, caused a large loss of promotional costs, and greatly reduced product profit margins. and cause great damage to the product and brand image.

[Prescription]: Enterprises must have a correct and comprehensive understanding of promotion. First of all, promotion is an important link and content in the process of enterprise marketing activities, and it is also one of the elements of an enterprise's effective marketing mix.

Secondly, promotion is not a panacea. It is essentially a temporary and short-term stimulating activity with the law of diminishing effect over time. A promotion that lasts for more than three months is equivalent to no promotion at all. It gives consumers a signal of price reduction in disguise; promotions are usually non-cyclical, and the creativity, time and money invested in promotional activities cannot usually be reused, otherwise it will give consumers a feeling of uncreativity and low appeal; More importantly, you should not hold promotional activities too frequently for the same brand of products, otherwise consumers will think that they are the manufacturer's unsalable products, inventory products or low-quality products, which will greatly damage the brand image.

Myth 8: Product Development

[Symptoms]: Companies that fall into this misunderstanding believe that as long as the product is of higher quality and has more selling points, the greater the likelihood of successful marketing; Otherwise, the product will have no market competitiveness and no sales. On the one hand, this has caused enterprises to increase investment in product research and development, causing product costs to continue to rise; on the other hand, product research and development is out of touch with the market, without considering the actual needs of consumers, but in order to pursue more selling points and ignore consumers' fundamental needs. Add unnecessary functions. This is the most common mistake that many businesses, marketers and advertisers make.

[Prescription]: Continuously launching high-quality and low-priced products based on changes in consumer demand is a requirement for companies to participate in market competition. Companies must avoid falling into the misunderstanding of excessive pursuit of perfect quality, because no matter what market, Consumers at any time want products with good quality and reasonable prices, rather than products with excellent quality but high prices. It can be seen that continuously increasing investment in making quality perfect is not necessarily the best policy. Enterprises need to find the best balance between the actual needs of customers and the company's existing resources, production capabilities and costs required to maintain quality standards. Secondly, companies must also avoid falling into the misunderstanding of concentrating too many selling points on one product, because today with the proliferation of media and the surge in information volume, consumers are besieged by countless advertising messages every day. Only simple, clear and in line with their own interests And the required information can enter the eyes and brains of consumers. Therefore, the selling points and corresponding demands of the product must be highly concentrated. Only the most differentiated and advantageous selling points of the product can be concentrated. In a relatively small market space, the selling points of the product must be targeted at specific target consumer groups. Only with concentrated, powerful and efficient appeals and information communication can it be possible to seize the "ladder" in consumers' minds and occupy the market share of the product itself.

Myth 9: Process Management

[Symptoms]: Business owners who fall into this misunderstanding often say to sales staff, "I don't care how you sell, I only look at Arabic numerals, as long as the sales Just go out.” This is a typical "result-oriented" marketing management model that "only needs results, not the process". The marketing process is not transparent, and business personnel operate in secret and have too many short-term behaviors, which leads to a series of problems: there is no way to detect in time the product sales process. problems and solved them in a timely manner; the price system in the sales channels was chaotic and vicious cross-selling phenomena were repeatedly prohibited; dealers' profits declined, their enthusiasm was low, and their loyalty to the company declined; accounts receivable remained high, and bad debts locked up the company; salesmen Actions are unplanned, performance is not assessed, and sales plans come to nothing; the opaque sales process leads to increased operating risks; sales staff work efficiency is low and sales expenses are high; sales staff team building is ineffective and marketing costs continue to rise.

[Prescription]: Establishing a scientific marketing process management system and a strict and sound multi-target marketing assessment system is a key link in promoting the sustainable and healthy development of an enterprise's market development and marketing management work. Therefore, Chinese enterprises urgently need to build a scientific marketing process management system, focusing on three aspects: process management of marketers, process management of the market, and process management of dealers, and manage "every day of every marketer" things", "at what price each product flows to which market", "each dealer's daily shipment volume, payment collection, promotion work progress", etc., to comprehensively improve the quality management level of the entire marketing process.

Secondly, enterprises need to establish a multi-objective marketing assessment system for business personnel, break the past indicator assessment system that only assesses sales volume and repayment amount, and establish a multi-objective assessment system that emphasizes both quantity and quality, with the purpose of improving corporate performance, so that sales volume , collection rate, collection cycle, sales growth rate, market penetration rate, cost profit rate, new market development ratio, strategic new product sales volume, new customer growth rate, consumer satisfaction, sales expense rate, product display, market maintenance and indicators such as development ability and enthusiasm to fully mobilize the enthusiasm of all business personnel, give full play to the wisdom and ingenuity of business personnel, and allow them to truly participate in various management tokens of corporate marketing activities as owners.

Myth 10: Price war

[Symptoms]: Companies that fall into this misunderstanding believe that under the current special market environment in China, it is difficult for companies to stay out of price wars, even if they are Companies that are very powerful in the same industry can hardly stay out of it. When competitors start a price war, they have no choice but to follow suit and lower prices. And only by lowering prices more sharply and much more than competitors can they continue to fight desperately. Winning in the end. Otherwise, there will be a risk of being squeezed out of the market, or even suffering a total loss or bankruptcy.

[Prescription]: Price war is not inevitable. In fact, it is completely possible to avoid falling into the "quagmire" of price war. The main strategies that can be adopted are as follows: First, avoid changing the focus of competition from products. Benefits are transferred to prices, preventing destructive competition and encouraging constructive competition. At the same time, customers are encouraged to shift their attention to the differences in product benefits and not take "proactive" actions in an attempt to quickly steal market share from one or two major competitors. The second is to avoid any misunderstanding of the competitive situation and market development. Enterprises should invest human, material and financial resources in order to understand the price factors hidden behind competitors' prices and the comparability between prices. You cannot simply cut prices as a counterattack based on one or two competitive offers. Third, even if we have to fight back against competitors, we should try to use other means besides price. Such as increasing product value, accelerating product innovation, improving service levels, and shortening the time from order to delivery, so that customers will increasingly feel that it is reasonable for you to maintain a higher price. The fourth is to focus on publicizing and shaping the high-quality and high-priced image of the product, and convey to consumers the message that "if your competitors lower prices and you persist in not lowering them, you will definitely be better than your competitors in terms of quality." The fifth is to look for areas that industry leaders don’t notice. It may be a marginal product, a marginal market segment or even a marginal sales channel, because it is too specialized, too small or dismissive for large companies. Careful.