Chapter 12 3. "The way is different, do not conspire with each other"

Dong Mingzhu once said: "There is no Gree without me, but there is no Gree without me." Undoubtedly, because of Dong Mingzhu, Gree has undergone earth-shaking changes. There is a popular saying among Gree employees: "Follow Dong Mingzhu, you will never lose!" But Dong Mingzhu's goal is definitely not just to be a good leader, but to make the entire Gree enterprise be at the forefront of the industry through her own efforts.It is not easy to strive to be the leader, and it is even more difficult to become the leader of the industry, because it means that the enterprise has to bear greater mission and pressure.Dong Mingzhu is full of arrogance, and she does not hide her desire to make Gree "the first world famous brand in China's air-conditioning industry" on any occasion.She dared to declare to the public: "I'm not wrong, I'm always right." The people who really saw Dong Mingzhu's power were those who had directly fought against her.

In a fierce and cruel price war in 1996, major domestic air-conditioning brands competed to cut prices, but Dong Mingzhu firmly opposed Gree's price cuts.After discussion, Gree adopted Dong Mingzhu's opinion and decided that Gree air conditioners would not drop a cent.But some people don't listen.This person is Gree's largest distributor, with annual sales of hundreds of millions, accounting for nearly 10% of Gree Electric's sales. He started cooperating with Gree in Jiangsu in 1995, and became Gree's largest sales force within one year. However, the success of running Gree made him overestimated his ability. He publicly declared: "Whatever policy I want, Gree will Give me some policies.” He completely disregarded Gree’s marketing rules, and engaged in dumping to hit various cities. Often through the relationship with Gree’s upper management, he shipped goods to nearly 10 provinces including Sichuan, Guangdong, Hunan, Hebei, Jiangxi, and Anhui during the off-season. , Even sold below the purchase price, which severely damaged Gree's sales policy and made many Gree dealers unprofitable.In this cold summer, this person entered 80 million yuan at once and demanded a lot of goods.The purpose is to hoard a large number of Gree air conditioners. As long as Gree lowers the price, he will spare no expense to crowd out others and monopolize the Jiangsu market, while also making Gree rely on him.For such a big dealer with energy, manufacturers generally look up to them, but Dong Mingzhu doesn't believe in this evil. In her eyes, all dealers compete equally and enjoy corresponding treatment according to their scale.So Dong Mingzhu informed the big family to stop supplying, even if he paid in, he would not deliver the goods.The relationship between this big household and a senior leader of the company is extraordinary, so not only did he encourage many dealers to go to Zhuhai one after another to exert pressure, sue Dong Mingzhu, and threatened to give up the distribution of Gree brand, he also came forward to Zhuhai himself to complain to Dong Mingzhu. Play hard and soft.But Dong Mingzhu would rather be dismissed than give in.If they had chosen to back down and tolerate the price reduction demands of dealers, the pricing power of Gree air conditioners would have fallen into the hands of dealers, and Gree would have lost the initiative and lost its market competitiveness.The decision to kick out the big family took everyone's breath away. In one day, they threw away hundreds of millions of yuan in annual sales without hesitation.What is commendable is that the blockade of large households has safeguarded the interests of most dealers, and many small and medium dealers have breathed a sigh of relief, and the morale of the army has been stabilized.Since 2000, large chain enterprises such as Gome and Suning have begun to conquer cities in major cities across the country, and their share in the entire home appliance market has increased significantly, and their status has risen sharply.According to the latest list of the top 30 national commercial chains released by the Ministry of Commerce, Gome ranked third with annual sales of 17.8 billion yuan and ranked first in the field of home appliance retail.For a long time, the air-conditioning industry has been using the transaction mode of payment in off-season and dumping goods in peak season, and manufacturers embezzle dealers' funds for development.

Gome adopts the model of regular settlement or consignment sales, and uses the funds of manufacturers to seek its own development.With the growth of power, these hypermarkets inevitably hope to seek greater market benefits, continue to provoke price wars, and even lower prices privately for dumping.China's home appliances have entered the era when the terminal is the boss. Gome has seized the weakness of the manufacturer's vacillation between inventory reduction and profit demand. Many manufacturers rely on hypermarkets, which will offend small and medium dealers; offended these small and medium dealers, they It is more dependent on hypermarkets, thus forming a vicious circle.Gome was originally one of Gree's sellers.

In February 2004, in the warm spring season, the air conditioner market gradually entered the start-up period.Gome, which has always been adhering to the principle of "small profits but quick turnover", made a small move behind Gree. Without Gree's permission, Chengdu Gome adjusted the price of Gree air conditioners privately.At that time, Dong Mingzhu, who was attending the National People's Congress in Beijing, was very surprised and dissatisfied when he heard the news.Dong Mingzhu believed that Gome's behavior had damaged Gree's price system and damaged its first-line brand image. She immediately called the manager of Sichuan Gree Sales Company to ask Gome to immediately terminate the low-price sales behavior and apologize to Gree.Gome apologized, but not to be outdone, it removed all Gree air conditioners from its branches across the country.Dong Mingzhu was enraged, and she ordered categorically: Stop supplying Gome.At that time, accusations about the cruel backlog of profits by Gome and other channel vendors were rampant. Many companies complained about Gome.It is said that Gome is required to enter every newly opened branch store, and if it does not enter the new store, the manufacturer's products will be withdrawn nationwide.Gome promotes sales at a price lower than the manufacturer's price, and the manufacturer even needs to make up for the losses incurred.

Gree's move undoubtedly gave many manufacturers a bad breath!Behind the conflict between Gree and Gome is the contest between the two different sales models.The contradictions and conflicts between the two distribution systems of Gree and Gome will eventually be inevitable in the face of the business philosophy of both parties.Gome is a sales giant of traditional agents, while Gree is constantly verifying the correctness of its concept through its original "emerging chain sales" model.To be precise, the Gome model relies on the supplier's money to settle its payment for goods, then use the loan to solve the cash flow, use the cash flow to solve the listing, and then use the listing to kill the supplier.In fact, this is an approach that undermines the win-win principle for its own benefit.Dong Mingzhu once again showed that her decision-making is very far-sighted.Dong Mingzhu said: "After this incident happened, many companies applauded and said behind their backs that Dong Mingzhu gave us a sigh of relief. But I said that since I gave you a sigh of relief, why can't you carry out a platform with Gome? Negotiation. Later, I summed up my experience. It was not Huang Guangyu’s problem, but our own company’s problem. Because you want to rely on it to cheat your products out, I think the word "cheat" is more appropriate. If your quality is good, Gome does not sell it, but others sell it. Consumers will eventually come to buy your products. But many of our companies just don’t realize the importance of product quality, and only launch products during the transaction process. Competing on price, what should we do in the end? Then cut corners and enter a vicious business environment.” In 2007, when a reporter talked to Dong Mingzhu about the contest between Gree and hypermarkets again, Dong Mingzhu said that Gree’s Therefore, some hypermarkets were launched because she did not agree with the sales philosophy of some hypermarkets.Dong Mingzhu's marketing concept is "win-win", consumers must win, dealers must win, and manufacturers must win.She has doubts about hypermarkets: "There must be problems with them. They think that the strong are bullying the weak, and I am the largest in the country. I want to swallow up other stores. This is unrealistic, and it does not conform to objective laws, and it is impossible to succeed. Dong Mingzhu further pointed out that although many companies applaud Gree's approach, they dare not withdraw from the store like Gree. The reason is that "Gree dared to do this because of its good quality. Mine. If you have consumers, you are not afraid that you will have no way out. After quitting Gome, Dong Mingzhu began to build her own sales channels. Many people still think that she is beyond her control. Many media and experts have expressed their opinions on this. Some people assert: Gree’s The channel model is obviously old and backward, leaving Gome is bound to be a dead end. Gree and Gome's "breakup" has made many people sweat for Gree, including Gree stock holders. It is generally believed that this is for Gree It was extremely bad news. On the stock market that day, Gree's stock fell several points as a result.Almost everyone kindly reminded Dong Mingzhu to reconcile with Gome as soon as possible. It is too late for air-conditioning manufacturers to please Gome and Suning and other hypermarkets. Offending them is really thankless.Although there are many comments from the outside world, Gree's interior is calm. Dong Mingzhu's answer is more straightforward than Gree's spokesperson: if it cooperates with Gome and other hypermarkets on a large scale, many companies will die faster.On the surface, the conflict originated from Gome's price cuts to sell Gree air conditioners, but in fact, Gree and Gome have not been in harmony, and this price cut is just a fuse.

On April 25, 2003, Shenzhen Gome launched a controversial "buy power, get Gree" promotion. Originally, it is very normal to give gifts in promotional activities, and many consumers also have this concept. It is just a normal thing to buy large commodities to get small commodities, and to buy first-tier brands to get second- and third-tier brand products.But this time the incident was completely reversed. Buying a third-tier brand might give away a first-tier brand Gree. Obviously, this practice has seriously damaged the reputation of the Gree brand, and it is suspected of unfair competition. It also disrupted the market price system of Gree air conditioners.Cai Jie, who was the general manager of Shenzhen Gree Branch at the time, said very angrily: "Why did Gome join forces with Power to tease Gree? One important reason is that Gree is the leader in air conditioners. In accordance with Gome’s rules, Gome insists that “manufacturers distribute goods for free, and settle after 7 days.” We think this business model is extremely unfair to manufacturers. Another point is that Gome’s entry fee ranges from 50,000 yuan to more than 50,000 yuan. This is a serious monopoly and extortion.” Gree spokesperson Huang Meifang believes that the fundamental purpose of Gree air conditioners not to fight price wars is to maintain market order.Gree will sincerely cooperate with merchants who abide by the rules of the game. If merchants do not abide by the rules of the game, there is no room for cooperation.Not bargaining does not mean that Gree air-conditioning has a violent tendency. Our prices have always been close to the market, and sales companies also rely on services to obtain reasonable profits.Regarding the low-price strategy used by many companies, Gree believes that it is almost exhausted and should be used with caution.For this war that will come sooner or later, Dong Mingzhu has already been mentally prepared.She clearly realized that this is not just a competition between the two parties for product price control, it is also related to the issue of whether the two parties can have good cooperation.At the same time, considering that although Gome has strong strength, a sales network all over the country, and a huge sales throughput, it only accounts for less than 1% of Gree's sales.Even without the cooperation with Gome, Gree's losses are relatively limited, so Gree is not afraid of this struggle.As the saying goes, "Those who have different ways should not conspire with each other." Gree and Gome have different business ideas. The conflict between the two companies is not beyond the conflict of interests, but represents the conflict between the two business ideas. .Under the new market structure, contradictions and conflicts between Gree and Gome's two distribution systems ("emerging chain system" and "traditional agency sales") are inevitable.Gome is a traditional agency giant, intending to dominate the world through chains; while Gree is constantly verifying the feasibility of its own operating channels through its original "emerging chain sales" model.This is not only a contest of strength between the two sides, but also a confrontation between old and new concepts.