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Support Can Better Drive Dealers' Enthusiasm Than Profit.

2008/8/23 15:03:00 22

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Channel promotion is a double-edged sword.

Wang Shefeng: as far as I know, many manufacturers are trying to motivate distributors to do more sales. They use the way of "channel promotion" to stimulate more dealers to buy more goods. In the short term, the volume of shipments of manufacturers goes up at once.

What do you think of this problem?

Chen Jun: the so-called channel promotion means that the manufacturers use the way of "purchase reward", with gifts, promotions and so on as bait to stimulate dealers to buy goods. This can improve the enthusiasm of dealers to recommend your products to some extent. At the same time, some dealers give away a portion of gifts and promotional items to retailers, so as to attract retailers to compete with other distributors.

But if frequent use of "purchase incentives", or even to curb sales, it is very dangerous.

For a dealer, its distribution network and retail customers are relatively fixed, so its terminal consumption is relatively limited. If the terminal can not digest the large inventory of the dealer, the dealer will drop the price or sell the goods.

It is equivalent to the "pressure" at the "intake", and the "outlet" can not digest, dealers move outwards and sell at low prices is a natural thing.

Wang Shefeng: that is to say, selling volume to dealers will result in de facto sale.

Although the manufacturer did not plan to lower the price, but because the manufacturer not correct incentives to dealers, it will cause a de facto sale, and the dealer will help you to reduce the price.

Chen Jun: dealers will lower prices, of course, their profits will be reduced, but because of the manufacturers' gifts and promotional products as profit compensation, the profit of dealers will not decrease or even increase.

It is almost impossible for a dealer to pull the price down once more.

Once retailers and consumers accept lower product prices, retailers and consumers will not buy it if they go up again.

The so-called price reduction is easy to raise prices.

The lower the final price, the less the dealer will sell your product, because the price difference between your products is getting smaller and smaller, and the price difference is the main profit guarantee for dealers.

Dealers can not earn money through the spread, they can only rely on manufacturers' gifts, promotional items to make profits.

Such a vicious circle, the lower the price, the lower the middle price difference, the smaller the distributor's middle profit, and the more and more dealers rely on the material reward from manufacturers, such as gifts, to make money.

So the appetite of dealers is getting bigger and bigger, and the material reward from manufacturers to dealers can only be continuously increased.

He Junhui: what is more serious is that once the manufacturers stop stimulating the material of dealers, dealers will have no money to make money.

In this way, distributors either turn to run other high profit products or take a negative attitude, causing the sale of the manufacturer's products to be blocked.

Manufacturers originally wanted to push sales through the "channel promotion", but the result was that dealers were unwilling to sell their products again, and broke the source of factory sales.

For dealers, because the price is lower and lower, dealers do not make any money.

Is this encouraging dealers?

This is not only to encourage dealers, but to crack down on distributors, which is depriving dealers of profit margins.

Zhu Junxiang: I know that sunrise group has launched a large channel promotion campaign, giving 30 bicycles of iced tea to give a bicycle worth 180 yuan, 50 yuan to give a manpower tricycle worth 300 yuan, and less than 30 to give a shopping card.

The items in different districts are not the same, but the principle is the average promotion fee of 6 yuan per item.

Once the policy came into effect, it received an unprecedented effect. Only 10 thousand dealers in a county in Baoding bought 10 thousand pieces of goods and sold them in a very short time.

Are these 10 thousand iced tea digested in this county?

Of course, I can't digest it.

Then where did the goods go?

Of course, we have to flee to other regional markets.

Dealers use promotional opportunities to sell goods at a much lower price than the market price.

At that time, the price of iced tea dropped to 33 yuan / piece, and the factory price was 41.6 yuan / piece.

Moreover, after the promotion period, sunrise products began to be unsalable in the surrounding area, because the goods of the two level wholesalers were too much pressure.

Chen Jun: the enterprise wants to stimulate the dealer to sell more products, the incentive result is that the price "sells", the dealer does not want to sell your product again.

The causes are all caused by factories themselves.

So, simply selling the goods to dealers will only crush the terminal, but no sales at the end.

At such a price, the manufacturer has to make sure the dealer's profit only two options:

1, reduce the supply price to the dealer, expand or restore the middle price difference, and ensure the reasonable profit of the distributor;

2, continue to continue to give dealers promotional materials and other incentives to compensate dealers lost intermediate profits.

Wang Shefeng: in this way, sales promotion similar to the booster channel can create instant sales volume, but in fact?

The product is only stored in the middle of the channel, not the final consumer digestion, and did not produce the actual terminal sales.

This is only an early withdrawal of market resources in the future, and it is an overdraft of the food industry.

In other words, channel promotion does not determine whether your product will sell well at the terminal, and whether the sale of the final product can be achieved.