Chapter 18 1. Know how to grasp the hearts of dealers

Dong Mingzhu is a man of the hour in China's home appliance industry, a businesswoman who always puts herself at the forefront of the storm.She has created an original marketing model of regional sales companies with assets as the link and brands as the banner, and has opened nearly 10,000 Gree stores around the world.The innovative marketing model has established Gree Electric's leading position in the industry and ensured that Gree will continue to cross the peak. It has been hailed as "a new revolution in the economic field in the 21st century" by the economic and theoretical circles. ——This is a profound comment in the list of the world's top business women published by the US "Fortune" magazine.

"Dong Mingzhu is a legendary marketing master. From 1995 to now, Gree Electric Appliances led by her has ranked first in the industry in terms of sales volume, sales revenue and market share for nine consecutive years, and paid more than 2.5 billion yuan in taxes. Her original Her regional sales company model has been hailed by the economic and theoretical circles as a 'new revolution in the economic field in the 21st century'." The industry has such a high evaluation of her. However, what is unexpected is that this businesswoman with a unique business experience stepped into the business world so casually.More than ten years ago, Dong Mingzhu from Jiangsu came to Shenzhen. After seeing the hustle and bustle of Shenzhen, the tranquil atmosphere and the blue water of Zhuhai Bay deeply attracted this pearl.

Choosing Zhuhai, this decision changed the development track of Dong Mingzhu's life.In an environment where the air conditioner market is turbulent, competing to kill, concept hype, and saliva wars emerge one after another, Gree's market performance is more like a martial arts master who closes his eyes and meditates, making everyone in the industry feel a deep internal force without making a sound.This can be seen from the relationship between Gree and dealers.Dealer relationship 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 has a strong cohesive force with dealers.All department managers, there is no one who does not want rights for the welfare of his department and his subordinates, Dong Mingzhu just "eating inside and outside".In other air-conditioning companies, marketing salespersons are paid according to the development of sales volume, which is the most lucrative position.Dong Mingzhu believes that the power of salespersons should be limited.The fact that Gree air conditioners are selling well is due to the workers and the scientific research developers. For a mature product, it is unreasonable for the marketing staff alone to spend such a large proportion of funds.Dong Mingzhu stipulated that the salesmen of Vangelis are not allowed to take kickbacks, and if they take a penny, they will be fired immediately.The evaluation of marketing salespersons is not measured by sales volume, but by the workload of communicating with dealers, market research, and price supervision.No matter how big Gree is, there are only 23 marketing salesmen, each responsible for a province, only responsible for coordination, not for network development.Distributors are divided into first-tier and second-tier dealers. Each region has only a few limited first-tier dealers, and the first-tier dealers will develop second-tier dealers.Different scales have different rebate standard lines.In this way, first-tier dealers tend to work hard to expand their network and cross the line, and Gree's dealers can expand rapidly.Dong Mingzhu also stipulates that the first-level dealers are responsible for supervising the second-level dealers.Once the quality or installation of the second-tier dealer has problems, immediately stop the goods of the first-tier dealer.What is even more surprising is that Dong Mingzhu, who was born as a salesman, not only restricted the power of salesmen, but also began to reduce salesmen.She only retained 23 salesmen, and then used all the saved marketing expenses of up to 100 million yuan to subsidize the distributors.In this way, Dong Mingzhu has always only used 23 salesmen to compete with thousands of salesmen from competitors. This is a unique marketing method in the country, and it is also the content of Dong Mingzhu's revolution.Dong Mingzhu's seemingly unreasonable reform measures have won the support and love of dealers.Some dealers said: Some company sales staff compete with dealers for profits, and even sales staff start their own companies.Gree is different, it depends entirely on our dealers.In Chongqing, Gree has only 5 employees, but its sales are 300 million.And Chunlan has its own sales company in Chongqing, with 150 marketing salesmen, and the annual cost is more than 20 million yuan.

Air conditioners are different from other home appliances in that their sales are highly seasonal. September to March is the off-season for sales, and April to August is the peak season for sales.Factories are often underutilized in the off-season, and even have to stop production for maintenance.Moreover, in order to maintain a certain amount of inventory, the factory will purchase important components such as compressors in advance, which means that the off-season expenses will not be adjusted. In the peak season, the factory will not have time to work overtime 24 hours a day. It is difficult to guarantee, and the product is large in size, which can easily cause a large amount of inventory.Therefore, for manufacturers, the shortage of production funds in off-season, the pressure of supply and inventory pressure in peak season are all headaches.With the high sales growth, Gree Electric has to borrow a lot from the bank to purchase raw materials and important components every off-season.Since 1991, Suning, which was still very weak, pioneered a new business model of ordering from factories in the off-season and making payment against the season. The merchants support the manufacturers in the off-season, and the manufacturers reward the merchants in the peak season.Without the knowledge of competitors, Suning quietly changed the rules of the game in the industry, established a new cooperation model with factories, unknowingly wiped out the opponent's competitive advantages, and relied on this innovative model in the industry in the In the business war of "the eight major merchants fighting against Suning", they defeated their opponents in one fell swoop, and this secret was immediately imitated by the industry peers, and gradually evolved into an "industry rule".

In 1995, Dong Mingzhu began to consider this issue after she became the business manager. Referring to the industry experience of off-season payment, she invented the "off-season rebate" policy that has been praised by people so far.The so-called "off-season rebate" is a marketing strategy created by Gree.It uses a very flexible method, which not only solves the problem of corporate liquidity, but also better links dealers and companies together.With the rapid growth of sales, Gree Electric had to borrow a lot of money from the bank to purchase raw materials every off-season, and the air conditioners produced in the factory put a lot of pressure on the inventory.At that time, the bank loan interest rate was as high as 7%, and Gree Electric had to pay the bank more than 100 million yuan in interest every year.Dong Mingzhu thought, instead of handing over the money to the bank, it would be better to use it on the closer dealers.As a result, a brand-new manufacturer cooperation model emerged. During the off-season, dealers invest funds in Gree Electric Appliances, and Gree Electric Appliances distributes the air conditioners produced to dealers. Inventory pressure and the pressure of concentrated supply during peak season.

Distributors can get two benefits. One is that Gree Electric guarantees to provide them with sufficient supply during the peak season, and the other is that Gree Electric will pay reasonable interest.This is Gree's original "off-season rebate" model.It is this model that allowed Gree Electric to pay 1.1 billion yuan in the off-season in 1995, which more than tripled compared with the previous year.For dealers, Gree Electric not only supplies the goods with guaranteed quality and quantity, but also rebates 60 million yuan, which is much more beneficial than their money in the bank.It is this sales policy that greatly stimulates dealers to join Gree Electric.Since dealers can get more competitive prices by paying the manufacturers in the off-season, and they can also enjoy the discounted prices in the off-season when picking up the goods in the peak season, it is impossible for them not to flock to them.Moreover, those who can invest huge sums of money in the off-season must be big sellers.Regardless of whether the funds come from deposits or loans, their investment in the off-season has virtually expanded Gree's sales market. However, this method has certain risks for large customers.Since air conditioners are seasonal products, no one can guarantee whether the next peak season will be hot weather. Once "cool summer" occurs, it will be difficult to sell the air conditioners in the warehouse, and capital flow will naturally become a problem.On the contrary, Gree is also betting, betting on the kindness of God, betting on the courage of major customers, and betting on the mistakes of competitors.The risk is obvious. Once the strategy is wrong, there will be a phenomenon of big dealers turning back.At that time, if Gree wants to cooperate with dealers, it will be difficult to be attractive.However, Gree is not blindly betting, and it still holds a few cards: First, the appeal of Gree's brand is increasing day by day.The peak season will always come. Gree air conditioners have obvious advantages in product differentiation, providing consumers with more value and more and more consumers agree. That is to say, Gree air conditioners already have a certain consumer market. The second is that in the past cooperation with large households, there have been relevant successful cases for your reference. Obviously, realistic cases are more convincing.The third is the advantages of institutional innovation.Gree Electric took the lead in adopting off-season rebates, and competitors responded in time, and it was difficult to imitate them quickly.Gree's off-season rebate policy can be said to kill two birds with one stone. It not only solves the problem of capital demand in the off-season, but also firmly binds the dealers and enterprises together. Since the dealers have already invested funds in Gree air conditioners, it is difficult to get more It is definitely a good thing for Gree to spend more funds to invest in other brands.Then, Dong Mingzhu introduced the "year-end rebate" policy.Year-end rebate means that at the beginning of a year, the manufacturer makes a certain commitment to the dealers in a certain form, or the dealers make a request to the factory and get the approval of the factory, and the year-end sales of different quantities will be given at the end of the year. Returned with varying percentages of profits.The content is that the manufacturer will return a certain amount of profits to the dealers at the end of the sales year according to the prior commitments based on the sales volume completed by the dealers throughout the year.The common practice is that the more dealers sell, the higher the points returned by the factory at the end of the year.This is a typical policy of encouraging more sales and cultivating large households: the more years you sell, the more rebates you will get in the end, and the more rebates you get and are expected to get, the more powerful you will be to expand the network with price advantages. The bigger the network, the more rewards you will get. And expect to get more rebates.

After the end of the sales year in 1995, Gree made another extraordinary move that shocked its competitors and surprised its dealers. Without much preparation, Gree rewarded dealers with a profit of 100 million yuan. .This strange trick of Gree has further increased the confidence of the majority of dealers in Gree, and laid a strong foundation for the re-implementation of the "off-season rebate" and "year-end rebate" policies in the next year, and made it difficult for competitors to imitate. Foreshadowing.After Gree created the year-end rebate, the manufacturer stated that we will give as much as Gree gives at the end of the year.At that time, Gree air conditioners offered a 35% profit discount based on the ex-factory price, and some manufacturers simply offered a 40% profit discount to attract dealers with a policy superior to Gree's.These manufacturers blindly learned from Gree, but they only learned a little bit.In order to maintain the long-term accumulated market reputation and brand reputation, Gree strictly controls product quality during the production process. Gree's product quality and business reputation cannot be learned.However, there is also a disadvantage of year-end rebates: if some dealers estimate that Gree can bring them 5 points of year-end rebates, they will take the initiative to reduce the profit of 3 points to consumers when selling products. , they can still make a profit of two points.And the bigger the sales, the higher the rebates they get.There are also some dealers who don't even think about making money by selling air conditioners. They sell them at whatever price they buy, and what they earn is not money from the market, but rebates from the production of air conditioners.This kind of non-standard operation of dealers, although they can get benefits themselves, has seriously damaged the interests of manufacturers.If the price of a manufacturer's products is chaotic in the market, it is definitely not a good thing for the reputation of the product or the stability of the market.Faced with the adverse consequences of year-end rebates, Dong Mingzhu made another move and formulated a new restrictive policy.

In 1997, Gree products began to implement barcodes, limited regions, and did not allow cross-regional sales. The purpose is to control the flow of products and prevent the phenomenon of counterfeiting.But Dong Mingzhu also realized that the method of using barcodes has great disadvantages, a bit like building a dam is not as good as flood discharge.Although in 1997, Gree's sales again ranked first in the market, but if this phenomenon cannot be dealt with in time, Gree's future will be difficult to predict. In 1996, Gree developed a less impressive but more deadly new weapon in terms of sales strategy - stepping back a month to enter the peak season.The distinction between peak season and off-season is neither legally recognized nor scientifically proven. It is more of a convention and thinking inertia, that is, April to August is the peak season, September to March is the off-season, and the off-season sells at low prices. , sell at high prices in peak seasons, and use price signals to regulate the elasticity of supply and demand.Smart manufacturers have reached an accomplice in the pursuit of profits: dealers mobilize funds in advance, buy in large quantities before the peak season comes, and sell them after the peak season arrives; manufacturers want to advance the price of the peak season and the month of making money .Gree's outstanding surprise: the off-season price has been extended by one month, which means that the price difference of two percentage points has cost Gree tens of millions less.Although the dealer is shrewd, he is not as shrewd as Dong Mingzhu.Compared with the shrewdness of the dealer, Dong Mingzhu is more ingenious and foolish.As soon as she made this strange move, all the dealers fell against the wind and were defeated by their subordinates.A company in Zhongnan originally planned to purchase three brands of air conditioners in April, namely Midea, Hitachi, and Gree. Now Gree has suddenly extended it by one month, which means that when most air conditioners are sold at the peak season price, he can still sell them at the same price. The off-season price is purchased from Gree. The general manager of the company immediately called and told his subordinates that all of them will be purchased from Gree, and he paid 88 million to Gree.

Numerous air-conditioning manufacturers have just recalled that they have been studying Gree's business strategy for many years.This time when they woke up, it was already too late, and the dealer's money had already been transferred to Gree's account.They could only sigh again: "Dong Mingzhu is too ruthless. After so many years, why didn't we think of this trick?" Dong Mingzhu kept showing her unique reverse thinking. Large dealers realized that selling Gree air conditioners not only has a higher profit margin, but also that the larger the sales volume, the more rebates they can get.Businessmen exist for profit, and when they realize this, they spend more money to develop sub-distributors.The dealer's move is significant.Because second- and third-tier dealers often give up their original suppliers and follow the big players because of their own interests.The process of expanding the sales network of large households is actually the process of expanding Gree's sales network. In just two years, the production and sales of Gree air conditioners have risen rapidly from the eighth to the first. The role of large households cannot be ignored.If it is said that the success of the Gree model relies on "off-season discount rebates" and "year-end rebates" to stabilize franchisees, this is just an implementation of the Gree model.Gree mode is a good idea, but it is not an easy task to realize this good idea and achieve good results.This requires a good team and integrity as the foundation. It is precisely the tension of a corporate culture led by Zhu Jianghong and Dong Mingzhu with integrity, strict systems, and effective implementation that has gathered a group of large dealers to fight the market together. Finally achieved a win-win situation.