Chapter 22 Chapter 20 Wholesale Channel Management

From the perspective of marketing, to see whether a commercial enterprise is a wholesaler and whether it is engaged in wholesale business, the key is to look at the purchase motivation and purpose of its sales objects.Even if it is the same enterprise, its business can cover two aspects at the same time. In addition to retailing, many companies also sell their products to the wholesale market.Wholesale is the economic behavior of buying and selling bulk commodities for further resale or processing and production, and commercial enterprises specialized in this kind of economic activities are called wholesalers.For example, a store that sells towels to consumers is a retail business, while selling to the hotel room division is a wholesale business.

Manager Liu of Henan Yufeng Trading Co., Ltd. was originally a distributor of Xiaomuhu Xianjiu, and later represented many products.In recent years, the competition in the liquor market has intensified, the cost of terminal development has increased, and enterprises have reduced their support for distributors due to the increase in taxes and fees, and the profits of distributors have become thinner and thinner.In order to find a larger living space, Manager Liu decided to develop upstream. Manager Liu believes that he has been a distributor of more than ten products, and his years of experience have given him a deeper understanding of the wine market and consumer demand.At the same time, the accumulation of capital and experience gave him the conditions for quantitative change to qualitative change.He believes that self-developed products can not only obtain more profits, but also can develop suitable products for different markets, making product packaging, taste and price more suitable for local characteristics.

In 2001, Manager Liu found a local winery, produced the packaging and brand by himself, and put forward requirements for the quality and taste of the wine, and the winery blended the products according to the requirements.Manager Liu believes that the newly transformed dealers have limited strength and are not suitable for developing national brands, but are more suitable for intensive cultivation of regional markets.First, because of the short distance and low transportation cost.Second, the taste of products from local wineries is mostly recognized by the local area.The third is to make better use of the network advantages of OEMs in the regional market and the rational allocation of resources.With a reasonable marketing strategy, Manager Liu's winery has achieved success.

Wholesalers are also divided into different categories.Wholesalers can be divided into distributors and agents according to whether they have ownership in commodity transactions; according to the scope and degree of services provided by wholesalers, they can be divided into two types of wholesalers who provide full services and limited services . Wholesalers are different from retail, and its characteristics are manifested in the following aspects: First, wholesalers are generally at the starting point or middle stage of the movement of commodities after they enter circulation.Therefore, in the process of commodity circulation, wholesalers always act as intermediate links.Second, wholesalers pay less attention to promotions, ambiance and store locations, since they are dealing with business customers rather than final consumers.Third, wholesale transactions are usually larger than retail transactions, and wholesalers are often involved in more transaction areas than retailers.Of course there are some exceptions.Wholesalers are familiar with market conditions, social needs and various complex sales conditions, and have rich experience in market operations.Therefore, the distribution of goods by them can greatly shorten the circulation time of goods and speed up the turnover of occupied funds.

Manufacturers can bypass wholesalers and sell directly to retailers or end consumers.But because wholesalers can bring all the benefits mentioned above, whenever wholesalers can perform one or more functions more effectively, they will be used by manufacturers.For example, when the manufacturer is small in scale and limited in capital, unable to develop a direct sales organization; or when the manufacturer has sufficient capital, but they would rather use their funds to expand production than to operate their own wholesale business, wholesale Business is their best choice.And sometimes multi-product retailers often prefer to buy a variety of assortments from a single wholesaler rather than directly from each manufacturer.

Wholesalers should define their target market and not try to serve everyone. Wholesalers also need to choose a specific target customer group according to the size of customers, the type of customers, and the services or other standards that customers need.In the selected target customer group, find out more favorable target customers, design attractive products, and establish a good relationship with customers. The competition in the light textile market is becoming more and more fierce.As far as the curtain fabrics of City A are concerned, China Textile City has three major markets: North Market, Tianhui Square, and United Market. Thousands of business households are vying for this "cake".Faced with such a severe situation in the curtain market, many operators realize that in order to gain an advantage in market competition, they must define the target market and take the road of segmentation.Processing curtain cloth into finished products for wholesale is becoming a shortcut for some business owners to achieve this goal.

Taking the road of product deep processing is becoming an effective way for many operators in China Textile City to win new customers and occupy new markets.Mr. Zheng on the first floor of Tianhui Plaza is engaged in the wholesale of finished products.At present, Mr. Zheng's customers have spread all over the country, and even a small amount is sold to Moscow.Mr. Zheng said that as far as China Textile City is concerned, the wholesale of finished curtain products is a new thing. Unlike the fabric business, the cost is relatively high, and its investment risk is not big. You can do more for popular ones and less for unpopular ones.Therefore, he is optimistic about China Textile City's vacancy in this area, coupled with China Textile City's geographical advantage in fabric supply, he believes that the future prospect of wholesale curtain products will be good.

With the development of the market, the profit of the wholesale of finished curtain products has declined slightly.But wholesalers all know that because curtain distribution belongs to the first-level wholesale and factory direct sales, so in order to really increase profits, while increasing styles and giving customers more choices, they still need to improve product grades in terms of fabrics, colors, etc. . my country's market economy has developed to this day, and the pressure of competition is testing all wholesale companies. How to make their own marketing decisions, determine the target market, market positioning and product marketing mix has become a difficult problem for many companies.

Marketing experts remind wholesalers that they also need to locate a target market in wholesale distribution.The target market and market positioning of the company are very clear, so when the class A business is under attack, it should use A1 and A2 to increase its strength and maintain differentiation; how to make the class B business the castle of the enterprise?How to turn C-type business into CA, CB, and CC, constantly enrich it, expand differentiation, highlight differentiation, and take the road of specialization, so that you can finally stand out in the wholesale market. Today, wholesalers are re-studying how many varieties should be operated most appropriately, and only choose those that are more profitable.

Wholesalers' "product" refers to the variety they deal in.Wholesalers are under great pressure to have a complete range of designs and colors, and to have sufficient stocks to supply them at any time.But this will affect profits, so wholesalers are re-studying how many varieties should be operated most appropriately. Wang has been in the business for nearly ten years, and there are more than 20 delivery vehicles alone. He used to be the largest local liquor agent and a must-see dealer for manufacturers.In Wang's words, "At that time, the reception factory and the agent were too busy every day."In order to enter the market, some manufacturers did not hesitate to give Wang a very generous support.

Wang believes that with a ready-made network, one more product will always increase the profit, and the support of the manufacturer is so strong, there is no risk if the market cannot do it.As a result, more and more products are being operated, which leads to more and more scattered energy and a decline in service quality.The tepid new products dampened the enthusiasm of salesmen and distribution channels. Moreover, due to the agency of competitive brands, the manufacturers who originally cooperated closely began to reduce their support for Wang, resulting in a decline in the sales of main products.In the end, with the rise of some new dealers, manufacturers of strong brands shifted their targets one after another.In the end, Wang only had the agency rights of some small brands, and the best-selling brands had to get goods from other general distributors. Due to unclear business ideas and blind greed for profits, Wang did not have an accurate understanding and grasp of his own business varieties, and eventually lost the market he had worked so hard to expand. The problem that Wang is facing is also the same problem that many dealers are facing now.Many wholesalers, when choosing the products they distribute.Without a clear marketing plan, for the brands and cooperative enterprises, they don’t look at the market, only look at the support of the manufacturers, and seek perfection in the product line. In the end, because they don’t concentrate on operating the main products, traditional dealers tend to decline.In fact, in contrast to successful dealers, many new fast-growing dealers rely on one or two main products, and the products have strong complementary functions.However, the traditional dealers with mediocre business often have everything that one expects to find and are disorganized.Therefore, the more varieties of products, the better. Only refinement and complementarity is the kingly way. In the process of establishing a good relationship with customers, which services are most important, which services can be canceled, and which ones should be charged accordingly.The key here is to find a unique combination of services that customers perceive as valuable. Like the retail service strategy, the wholesaler's service strategy is also related to the development of its channels.Now that the market competition is becoming more and more fierce, wholesalers are competing to "please" lower-level channels in terms of service in order to win more customers.However, the provision of free services cannot be unlimited, and must be within a reasonable range that the wholesalers themselves can bear.Facing such a competitive situation, what kind of service strategy should be adopted is the best choice?Wal-Mart's establishment of Sam's Wholesale Club is the product of its implementation of service differentiation. Positioning differentiation emphasizes being different from competitors, while service differentiation emphasizes being different from customers.Since every customer we face is different, it is impossible to satisfy all customers with one service level.The conditions of customers themselves are different, and the expectations of satisfaction are naturally different.Therefore, when an enterprise implements a differentiation strategy, its recognition of important customers will be different. Every business will identify its important customer groups because of its differentiation strategy.Entering the 1980s, Sam Walton found that some wholesalers were selling goods at lower prices than Wal-Mart. These wholesalers had very low overhead and profits could be squeezed down to 5%-7%, which was far below the discount. The retailer's 22% level. In order to maintain the advantage of low prices, in 1983 Sam Walton decided to start the Sam Wholesale Club.Sam's Wholesale Club is a large warehouse-type shopping mall, mainly targeting some small business owners and ordinary consumers.Customers only need to pay an annual membership fee of $25 to become a member and buy high-quality goods at wholesale prices.Sam's Wholesale Club has attracted consumers and small businessmen in many cities based on the principle of small-profit wholesale, and has achieved great success. Wal-Mart's differentiated service strategy of establishing Sam's Wholesale Club is a good inspiration to us.Just as products have achieved market segmentation, we have also ushered in the era of segmentation for services.Only by providing the services required by customers in a targeted manner can the marketing goals be achieved economically and effectively, which is a win-win choice for wholesalers and customers. Wholesalers are beginning to trial new pricing methods.They may reduce gross margins on certain products in order to win new and important customers.When they can use this to expand the supplier's sales opportunities, they will ask the supplier to give a special price discount. The wholesaler's pricing is usually added to the cost of goods according to the traditional ratio to cover their own expenses.For example, a developer’s traditional ratio is 20%, of which, expenses may account for 17%, and the remaining 3% is gross profit.The average profit margin for a grocery wholesaler is generally under 2%. Which pricing strategy a wholesale company finally chooses is closely related to its overall marketing and production mix.Taking the pricing strategy of foreign trade clothing wholesalers as an example, we can see the pricing strategies of wholesalers. Foreign trade clothing is a seasonal and highly popular commodity, which makes foreign trade clothing enterprises often face the pressure of price changes.Facing the rapid price changes, a foreign trade clothing company made the following decisions on its pricing strategy: According to the survey, the garment factory believes that buyers will respond to price adjustments.If the price of a product is reduced, the buyer may think that: the product is outdated and will be replaced by a new product; the product is defective and sales will not be smooth; the business is in financial difficulty and it will be difficult to continue operating;And if the price of the product is raised, the customer's reaction may be: the product is very popular, if you don't buy it quickly, you will not be able to buy it; the product value is high, and the seller wants to make more profits, etc. On the competitor side, competitors respond to price adjustments in the following three ways: (1) Reciprocal reaction, that is, if you raise the price, he will raise the price; if you lower the price, he will also lower the price.Such a consistent price adjustment behavior has little impact on the enterprise and will not lead to serious consequences.Enterprises adhere to a reasonable marketing strategy, will not lose the market and reduce market share. (2) Reverse reaction, that is, if you raise the price, he will lower the price or keep the original price unchanged; if you lower the price, he will raise the price or keep the original price unchanged.This kind of conflicting price adjustment behavior has a serious impact, and the purpose of competitors is also very clear, which is to take the opportunity to compete for the market.In this regard, enterprises should conduct investigation and analysis, firstly to find out the specific purpose of competitors, secondly to estimate the strength of competitors, and understand the market competition pattern. (3) Cross-reaction, that is, many competitors react differently to the price adjustment of the enterprise, some are opposite, some are reverse, and some are unchanged. The situation is complicated.When enterprises have to make adjustments, they should pay attention to product quality, strengthen advertising and keep sales channels open. Therefore, the response of the enterprise to the competitor's price adjustment is that in the homogeneous foreign trade clothing product market, if the competitor lowers the price, the enterprise must lower the price accordingly, otherwise it will lose customers.If a certain company raises the price, other companies will raise the price accordingly (if the price increase is beneficial to the whole industry), but if one company does not raise the price, the company that raised the price first and other companies will have to cancel the price increase. In the market of heterogeneous foreign trade clothing products, buyers not only consider the price of products, but also consider factors such as quality, service, reliability, etc., so buyers are not responsive or sensitive to small price differences, and enterprises respond to competitors' price adjustments. More reasons.When an enterprise is faced with price changes, it must first analyze: What is the purpose of competitors' price adjustments?Is the price adjustment temporary or long-term?Only on the basis of fully considering these issues can scientific and reasonable price adjustments be made. The vitality of price lies in its flexibility and adaptability, that is, it changes according to changes in the market, demand and competition.Price strategy is an important link in the marketing mix of an enterprise, and choosing the correct pricing strategy is the basic content of the pricing process.Most pricing strategies can be used in combination, so each strategy is valuable to the business. Wholesalers rely primarily on their salespeople for promotional targets.Even so, most wholesalers still see merchandising as a conversation between a salesman and a customer, rather than as a concerted effort to sell, make connections and provide services to key customers. What we are more familiar with is that in retailing, retailers often have a variety of promotional methods to attract consumers to buy.In fact, in wholesale, wholesalers also need to use appropriate promotion strategies to promote agents to make more powerful sales. All along, the National Day holiday is also a "golden holiday" in the mobile phone market. Branded mobile phones will never miss such a great opportunity, and the mobile phone wholesale market will naturally not let go of this excellent opportunity.As the so-called "Golden Nine and Silver Ten" of merchants coincides with the 8-day long holiday of the National Day and Mid-Autumn Festival in 2009, such a peak sales season, the wholesalers will naturally not let it go, and have launched various promotional activities. In a mobile phone market in Beijing, various wholesalers started a promotional battle one after another.Some put up promotional banners of "Welcome Mid-Autumn Festival and National Day", some launched new machines before the National Day, and carried out gift-giving activities for buyers who bought new machines. Low-price special machines are provided to retailers who purchase goods, so that everyone can have a profitable Golden Week.Some wholesalers adopt a "point system" that is not common in the mobile phone market. The more you accumulate, the more rewards you get.In short, there are various wholesale promotion activities, and the ultimate goal of promoting the sales of various retailers is naturally to promote consumers to buy products of this brand more conveniently and affordable. In general, wholesalers rely primarily on their sales force for promotional targets.Most wholesalers still see merchandising as a conversation between a single salesman and a customer, rather than a concerted effort to sell, make contacts and provide service to key customers.As for non-personal promotions, wholesalers can also benefit from image-building techniques applied by retailers.They need to develop an overall promotional strategy, make full use of some of the suppliers' promotional materials and programs, and more effectively promote product sales. Marketers remind that wholesalers can use the following common promotion methods: (1) Purchase with gift.When wholesalers purchase goods, manufacturers give some physical gifts according to their purchase volume.This can mainly improve the sales enthusiasm of wholesalers and the competitiveness of products in wholesale channels.Wholesalers must be cautious when choosing gifts when purchasing goods for distribution. If you choose some low-priced, high-profile items, you will know that the items should be both practical and easy to sell.And the gifts must be paid in time. (2) Order meeting.The wholesaler order meeting is a promotional activity that is paid by the company and operated by the dealer.During the ordering fair, the dealer will invite all the wholesalers down the line to participate, through on-site order discounts and lottery draws (set cut level, such as: order 1000 pieces of goods to participate in the lottery draw once, 2000 pieces twice, and so on.) The way to encourage wholesalers to actively order products.However, since the order meeting is relatively expensive, it is best to hold it before the peak season of products. (3) Accumulated sales rebates.Sign a sales rebate agreement with some wholesalers with large sales volume. The agreement stipulates that the sales volume will be reduced (0.5 yuan per piece for sales of more than 1,000), and the rebate will be cashed out after the expected sales target is reached.By establishing a long-term cooperative relationship with "big salesmen", these "big salesmen" are prevented from being poached by other companies to increase promotions. (4) Display rewards.Choose a wholesaler with stacking space and a good location in the store to participate, stack products or empty boxes according to the number required by the company, and keep them for 1-3 months. During this period, the company will send special personnel to conduct random spot checks. amount of rewards.This method can effectively create an "overwhelming" momentum of products in the market, so that retailers and consumers can see the company's products everywhere, increase the confidence of dealers in their operations, and increase the possibility of retailers choosing the company's products. (5) Making store signs.Free signs for some wholesale customers who sell products or have better store locations, the premise is: how much goods need to be purchased at one time, and the quantity is set according to the actual situation.The content on the signboard consists of two parts: the wholesaler's store name and the company's product picture and company profile.Shop signs can effectively publicize the corporate image, increase product sales, market share, corporate visibility, and ultimately achieve the effect of advertising. While the wholesale industry is developing, it also faces many challenges.It continues to be marred by enduring trends - rising prices and fragmentation of suppliers in favor of cost and quality.The trend toward vertical integration, in which manufacturers try to control markets by owning the intermediaries that bring goods to market, is increasing. The manufacturer always has the option to override the wholesaler, or replace an inefficient wholesaler with a more proactive, aggressive one.On the other hand, enterprising wholesale distributors meet the challenging needs of their suppliers and target customers by improving their services.They realize that the only basis for their survival is to improve the efficiency of the entire marketing channel.To achieve this goal, they must constantly improve service and reduce costs.It is because of these two forces that wholesale business is constantly changing. The core business of MYDIN, which started from nothing, is mainly wholesale and retail.The company sells a wide variety of daily necessities, including food, bedding, household items and a series of related products.In addition, they also stock a full range of Muslim food to cater to a special clientele.By adopting the concept of Halal (allowed by Islamic rules), they occupy an absolute dominant position in the Muslim (more than 60% of the total local population) market.Furthermore, by striving to pursue goals that transcend background, upbringing and education level, MYDIN has also established a strong presence in the local market and in people's minds. Since its establishment in 1957, the MYDIN Group has grown steadily and rapidly under the leadership of Dato' Haji Ameer Alibin Mydin and his brothers.Their first store is located in Kota Bharu, Kelantan (Kelantan state), and they mainly sell toys imported from Thailand.After 40 years of hard work, they currently have 40 stores in the country, including 2 large supermarkets, 24 department stores, one general supermarket, 7 grocery stores and 6 convenience stores. With the continuous development and expansion of business in recent years, MYDIN has gradually realized that the traditional manual inventory recording system can no longer meet the ever-changing demand for inventory movement.As the branch network continues to expand, the number of inventory movement requests to be processed, requests for returns, damaged goods, and goods in transit are also increasing.Every day, not only goods from local and foreign suppliers need to be shipped into MYDIN's warehouse, but the business also processes customer orders from various stores. MYDIN finally decided to upgrade its traditional system to an integrated warehouse management system (WMS) with a barcode recording and scanning system, and hoped to find a trustworthy partner to implement the upgrade project. Finally, MYDIN set its sights on Intermec's partner in Malaysia, Clapper Technology SdnBhd. MYDIN briefly explained to Clapper his intention to implement a comprehensive WMS system, and purchased a powerful hardware platform that was easy to expand and cost-effective to run.After learning about Intermec's hardware, MYDIN's IT department quickly made a decision after preliminary testing and equipment selection. In the end, MYDIN chose Intermec's CK61 handheld mobile computer because it passed all reliability and durability tests.In the initial implementation, MYDIN deployed 30 CK61 mobile computers with integrated EX25 short-range and long-range scanning engines. With its compact size and rugged design, the EX25 is ideal for omnidirectional short-range and long-range scanning at scanning distances between 15.24 cm and 15.24 meters. Importantly, the EX25 can also scan 1D and 2D barcodes, a feature that MYDIN finds very useful. CK61 is applied in the receiving and picking area of ​​MYDIN's main warehouse located in Subang Permai (near MYDIN headquarters).After adopting the WMS system, MYDIN successfully improved the entire warehouse workflow, with the help of the new data acquisition system, the initial process was simplified, which in turn directly improved efficiency and reduced possible problems in the logistics process. New technology has injected new vitality into this wholesale enterprise and has new advantages.The future trend of wholesale industry technology will also conform to the requirements of the times and develop in a simpler, more convenient and intelligent direction.On the whole, at present, the main changes in the wholesale industry include: competition calls for low-cost formats; fierce competition among wholesalers leads to continuous expansion of enterprises; spiral changes in the number of services provided; the trend of commodity integration and diversification ; Large wholesalers began to enter the global expansion; the management level of wholesale enterprises is improving day by day.