Chapter 13 4. Whoever gets the channel wins the world

In 2007, Gree Electric’s sales exceeded 30 billion yuan for the first time, and it took less than a year to grow from 20 billion to 30 billion yuan. What’s even more gratifying is that the growth rate of Gree Electric’s profits exceeded sales for the first time. growth rate.Gree Electric's previous performance forecast showed that the company's net profit in 2007 increased by about 100% compared with the same period last year. Dong Mingzhu, President of Gree Electric, said: "This growth is a historic breakthrough for Gree Electric since its establishment." The brilliance from small to large and from weak to strong in the past few years relies on the Gree model.The reason why Gree Electric has achieved such impressive performance is its unique layout and strong control over the air-conditioning channel, which has become the key to its success, making it a "one-way champion" in the air-conditioning industry.

In 2004, when Gome confronted Gree, many experts pointed out that if Gree broke away from a national home appliance chain like Gome, it would surely die.Two years later, Gree, which parted ways with Gome, not only was not suppressed in terms of sellers, but became more and more powerful in the market. In 2006, many brands hesitated in the market, but Gree went against the trend, not only continued to maintain a substantial growth in sales, but also lengthened the distance from other first-line brands. Gree proved with facts that not only did he not die, but he also lived better than before.This naturally makes other companies and many media puzzled.They once again focused on Gree in order to find the factors of Gree's success.The result of the debate has returned to the previous answer: the reason why Gree can achieve today's achievements is due to the incomparable advantages of the Gree model that other models have.To be precise, the Gree model refers to Gree's marketing model.This model was once called "the new marketing model in the 20th century", which shows that the birth of this model shocked everyone.The creator of this model is Dong Mingzhu, who is constantly known for his surprising victories.In "Playing Chess Without Regrets", Dong Mingzhu summarized Gree's marketing model from 1992 into five stages: the sales promotion stage before 1994; the major customer stage from 1995 to 1996; the standardized market stage from 1996 to 1998 ; The joint agency stage from 1998 to 2000; the professional agency stage after 2000.Through continuous evolution, Gree has formed its own sales model, which is called "Gree model".Speaking of which, the birth of this model is also due to the air-conditioning war.

1996 was hailed as the year of the "First National War" in the household air-conditioning industry.Dong Mingzhu, who was the business manager of Gree Electric Appliances at the time, never had a good night's sleep.The disorderly competition in the market and the rare cool summer have brought the price war to the "valley of death".A Gree dealer threatened: "Unless the price is lowered immediately as I said, Gree will die this year!" On the other hand, due to the lack of market mechanism due to the fact that the buyer's market has just shifted from the buyer's market to the seller's market, there are many heroes everywhere, and the princes are divided.Take Gree's Hubei market as an example. Gree originally had four big salesmen in Hubei, known as the "Four Heroes of the Warring States Period". The result of the "bloody battle in cool summer" eventually led to the loss of most dealers and manufacturers.In this bloody battle, although Gree relied on favors to break out of the siege, the disorderly market competition in the end still made Gree's distributors unprofitable.

At the end of 1996, Gree reluctantly took out 100 million subsidy dealers. After learning from the pain, Gree realized that the vicious price war not only damaged the reputation of the brand, but also made dealers unable to afford after-sales service to consumers due to the low price, which eventually caused the fundamental interests of consumers to be damaged and the entire industry to go bankrupt. .After careful consideration, Dong Mingzhu started the exploration and practice of a new sales model. At the end of 1997, Dong Mingzhu's bold idea coincided with the conscious requirements of Hubei dealers, so a mutually beneficial and win-win economic alliance was established with assets as the link and Gree brand as the banner. "Hubei Gree Air Conditioning Sales Company" was officially born on December 20, 1997.This is Gree's original creation of the first regional brand sales company in China composed of manufacturers.This joint-stock sales company model is: unified channel, unified sales, unified market and unified service, opened up a unique professional sales road, unified price external approval, joint market development, and common development.The Gree Electric Appliances of the regional sales company adopts a unique market model. The reason why it is called "unique" is because the Gree Electric Appliances Regional Sales Company has networked the largest wholesalers in the province and city, so that even if other brands cooperate with other sales companies, they will not be sold at all. Can't compete with Gree Electric.After continuous running-in and development, Gree Electric Appliances has achieved relatively large growth.In 1998, the sales reached a big level, with a growth rate of 40%. The secondary dealers also made a lot of money, and the market was gradually standardized and improved.Dong Mingzhu's idea is very clear. Instead of impacting manufacturers, merchants, and consumers due to prices, it is better to maintain the interests of the three together. Everyone will jointly establish a sales company that is controlled by Gree and jointly formed by various merchants. In this way, their respective interests become the common interests of everyone, and self-discipline in prices and self-discipline in services can be realized.The biggest feature of the sales company is that it is controlled by the enterprise, like Gree's sales department, so that manufacturers and merchants do not need to play various marketing tricks; it earns reasonable profits and requires merchants to use services to occupy the market; No opportunism, no profiteering.In these places, Gree not only stabilized product prices and maintained its brand image, but also steadily increased its market share.Dong Mingzhu focused on constructing a strong restrictive mechanism to ensure the influence on dealers and prevent the phenomenon of defection.If the manager of the sales company cannot keep up with Gree's development, or if there is a problem with the operation, Gree can replace him.There are some sales companies where Gree does not hold a controlling stake, but they can still be replaced.Because the purpose of Gree's replacement is to develop the sales company, the dealers will of course agree.Other companies can copy this model, but it is difficult to achieve Gree's level of control, which depends on corporate culture, company management and corporate integrity.Gree has all these points.Yu Yun, general manager of Sichuan Sales Company, once commented: This model not only has great advantages in turning enemies into friends, uniformly controlling the regional market, and ensuring the profits of manufacturers, but also different from the office and the large household system. The sales model closely integrated with the factory has fully realized the characteristics of localized operation.Therefore, it is extremely effective in regulating the market and increasing sales.It is not difficult to see from the sales performance of Gree Electric Appliances that Dong Mingzhu has rich practical experience in air-conditioner marketing and advanced channel marketing ideas, so that Gree Electric Appliances has always been ahead of China's air-conditioner industry in terms of channel marketing advantages.Since 1994, Gree Electric has successively launched the "off-season rebate" and "year-end rebate" policies. Through flexible and efficient marketing strategies, Gree has adapted to the development and changes of the air-conditioning market, and has formed a strategic cooperative relationship with distributors for the integration of manufacturers and common development. , established Gree Electric’s leading position in the air-conditioning industry.After several years of successful operation, the business model of Gree Electric's regional sales companies has proved to be the best marketing model to deal with the increasingly chaotic price war and the increasingly intensified industry competition.This original marketing model makes it an important factor for Gree Electric to lead the air conditioner market.With the in-depth development of world economic integration, corporate marketing has entered the era of "channel is king".

The theory of "channel is king" is regarded as the marketing book in the new era by most manufacturers, and the status of channel providers is increasingly recognized and valued by manufacturers.Gree's unique channel strategy is closely connected with Dong Mingzhu's personal insights and planning. She has only dealt with dealers for a few years, but she has already understood the truth that "water can carry a boat, and it can also overturn it". Dong Mingzhu gradually controls and operates This power is used by Gree.Some experts pointed out: channel management is marketing dealers.The relationship with dealers has always been the focus of Gree's marketing model. The so-called "representing the interests of dealers" is an active representation rather than passive maintenance. Therefore, Gree dealers have formed a strong cohesion.Dong Mingzhu said: "We treat dealers equally, no matter how big or small, and treat them with sincerity, consistent policies, equal cooperation, and mutual benefit. In addition, Gree Electric pays great attention to 'integrity' in dealing with dealers and does not cheat. Distributors, keep your promises to dealers, and promises will be fulfilled. If you don’t promise, you will surprise dealers.” Gree Electric Appliances has better protected the interests of dealers. In turn, dealers can also loyally publicize and promote Gree, thus forming a good cycle.Although the Gree model has brought great success to Gree, no matter which model has its weaknesses.The disadvantage of the Gree model is that, due to excessive decentralization, Gree headquarters lacks unified management and constraints on the sales companies, resulting in several incidents of "rebellion" by sales companies.Due to the old grievances among the major dealers tied to Gree Electric Appliances in the past when they competed for the market, and the fact that each shareholder has different shares in the company, the seemingly perfect shell of the regional sales company cannot conceal the conflicts among shareholders.This paved the way for the subsequent "civil strife" in some areas.Because Gree relies too much on large distributors and neglects the construction of sales terminals, the implementation of strict channel control also makes the number of sales terminals limited, resulting in the isolation of consumers from Gree products.In actual operation, Gree only existed as a small shareholder at the beginning, and did not have a real controlling stake. Coupled with the difficulty of monitoring, it is easy to have bad behaviors such as illegal operations and self-serving by dealers who participated in the establishment of regional sales companies during the operation process. Naturally, it damages the interests of the joint venture company and Gree Electric.However, what is surprising is that in this conflict of interests, the Hubei sales company was the first to become a "competition place" between Gree and regional big players.

At the end of 2000, Gree Electric discovered that some people with bad intentions in the Hubei company wanted to use the method of "transplanting flowers and grafting trees" to use the Gree brand to engage in "extracorporeal circulation" and transfer Gree's resources to small companies registered by individuals, damaging the second and third-tier distribution. The interests of businessmen and profiteering from it. Dong Mingzhu once again showed a tough style. At the beginning of 2001, Zhuhai Gree established a "Xin Gree Company" in Hubei to replace Hubei Gree Sales Company.Subsequently, Hubei Gree Sales Company, with an annual sales of more than 500 million yuan, began to cease operations, which became a sensational "Hubei Mutiny" event.Similar things are still happening in Anhui, Chongqing, Northeast and other places.The emergence of this series of problems made Dong Mingzhu deeply realize that no marketing model is static, and so is the Gree model.The birth of a new model does not mean it will always be applicable. It must continue to grow, improve and adapt to changes in the market situation.After learning the lesson, Dong Mingzhu's adjustments to Gree's channels have also been successively launched in the southern region.

In August 2003, Dong Mingzhu began to take the initiative to "reduce the feudal clan".In the first step, Gree injected funds into the branch company for the first time, increased its shareholding in the branch company, and achieved the purpose of holding shares.In the second step, Gree directly dispatched the chairman and sales executive from the headquarters, and the new shareholder also served as the general manager.The third step is to re-divide the sales area, and the branches of Conghua, Panyu, Huadu and Qingyuan are directly assigned to the Guangzhou Branch, and the Huizhou and Dongguan branches are assigned to the Shenzhen Branch.As a result, the sphere of influence of the sales companies in Guangzhou and Shenzhen has been strengthened.At the same time, Gree is also actively adapting to changes in the market. It does not ignore the emerging home appliance chain industry represented by Gome and Suning. Develop close relationships.Gradually abandon the big dealers, move the center down, and directly cooperate with second- and third-tier dealers and sales terminals. Channel flattening has become a general trend in the air-conditioning industry, and Gree is no exception.In fact, the "Gree model" is not a simple "channel model", it has gone beyond the ordinary marketing channel model, but a chain marketing model.It cannot be regarded as a simple management concept, but a business concept.Under the current market situation, it is indeed of great significance for manufacturers to strengthen the construction of channels.But we should also be deeply aware that if we pay too much attention to channel construction and ignore the competitive elements of other markets, we will inevitably lose sight of the other, and even if it is beneficial, we can only achieve a short-term competitive advantage.When the market gradually matures and consumers' demand for personalized brands and products rises, the advantages of channels will be weakened.In the ever-changing commercial society, it is impossible to have a once-and-for-all business model.For Gree, if there is one thing that will never change, it is the eternal freshness of product quality.When everyone thinks that Gree's success is due to its channel advantages, don't ignore that Gree air conditioners have the most competitive advantage in terms of quality.The era when channels are king is slowly becoming a thing of the past, and the era of oversupply of products has arrived. Companies that ignore product quality and imagine that they can leave the market after making a profit cannot last long.The kind of thinking that relying on channel advantages to secure the world will gradually be cleared from the market stage.We must realize that Gree can succeed because it can always keep pace with the times, be good at summarizing itself, stick to itself, and always be responsible to consumers, dealers and enterprises.The "Gree Marketing Model" widely praised by the industry is the creation of the Gree Electric Appliances team.Dong Mingzhu said very modestly that the development of Gree Electric Appliances to today's scale is due to the efforts of everyone in Gree to make it a world famous brand; Gree's good performances in the past 20 years are not one-man shows, but a group of people and a team. The chorus, therefore, the key to the success of the "Gree marketing model" is the incomparable team spirit of Gree Electric Appliances, and the power of a single-minded team is infinite.Dong Mingzhu also said that as for Gree's future model, we must first look at the current model, because without the current model, there will be no future model. Therefore, Gree's model is constantly changing, overthrowing and surpassing itself, and integrity and responsibility are Gree's constant mode.