How Can Dealers Overcome Obstacles In The Promotion Process?

Dealer promotion is an essential part of channel management.

In the authoritative dictionary of marketing, its definition is that manufacturers use material and spiritual rewards to encourage and support distributors to improve their channel status and improve their relationship with secondary dealers or terminal retailers, so as to improve sales performance.

Because it relies on the leverage of the dealer to start the channel indirectly, there are many variables in the choice of the leverage fulcrum, that is, the choice of specific sales promotion tools and the frequency of the promotion tools.

How to choose a suitable fulcrum has become the bottleneck of distributor promotion.

As far as my conclusion is concerned, in the operation of specific businesses, there are three major bottlenecks in the promotion of distributors.

　 一、進貨獎勵是強心針還是嗎啡？ 

The reward is the manufacturer's incentives such as gifts, lotteries and other promotional products to stimulate dealers to replenish their stock.

To a certain extent, it can enhance the enthusiasm of dealers to recommend and promote products. As a result, some of the distributors give away the gifts and promotional items to the sub middlemen, so they can also play a positive role in promoting the competition among the distributors by competing for the subordinate customers.

A typical example is a large-scale promotional activity that sunrise group has done. Its sales promotion is that every 30 iced tea will give a bicycle worth 180 yuan, 50 yuan for each of the manpower tricycles worth 300 yuan, less than 30 pieces for shopping cards, and different regional gifts, but the principle is an average promotional fee of 6 yuan each.

As far as efficiency is concerned, purchase bonus can be regarded as a booster for dealer promotion, and the stimulation to dealers is immediate.

For example, when the promotion policy of sun group was introduced, it received an unprecedented effect immediately. Only a county dealer in Baoding bought 10 thousand pieces of goods, and in a very short period of time, 10 thousand pieces of goods would be sent out quickly, asking for another purchase.

This phenomenon is obviously abnormal, which is caused by excessive promotion policy.

Generally speaking, when the value of promotional items of promotional reward exceeds the expected profit return of normal sales products, it will cause the overheated reaction of dealers in pursuit of short-term interests. Once the direct storage of goods brought by this reaction exceeds the specific consumption capacity in the area, the huge unreasonable stock will lead to short circuit phenomenon.

At this time, the dealers will take some unreasonable measures to get rid of the unreasonable stock brought by the insanity purchase of the promotional items, so as to alleviate the pressure of goods turnover and capital circulation in the channel, and adopt some extreme shortsightedness measures.

There are two main types, one is low price selling, the other two is fleeing goods.

In this way, the nominal sales promotion of the manufacturer has led to the fact that Li's evolution has become a de facto price reduction.

When the dealer reduces the price, of course, it will lead to a decrease in profit, but in the short term, the profit of the dealer is not reduced, but it may increase in the short term.

The problem is that it is almost impossible for a dealer to pull up again after the product price is pulled down, because once the sub middlemen and consumers accept lower product prices, they will see the current price as a fair price. If they go back up again, they will think it unfair. That is why the price is easy to increase and the price is rather low.

In the long run, the final price will continue to go down. The price difference between the distributors and the products will be smaller and smaller. The price difference is the main source of the dealer's profits. Dealers can not make money by relying on the spread of price. They can only rely on the promotional items of the manufacturers to make up for the deficit of profits, thus forming a vicious cycle, the lower the price is, the lower the price difference, the smaller the price difference, and the thinner the dealer's profit, the more the dealer will rely on the material reward from the manufacturer's gifts and so on to make money.

The effect of purchase reward is similar to that of morphine.

In this cycle, manufacturers are in a dilemma.

Once the manufacturer stops selling material incentives to the distributors, dealers will have no money to make money, so dealers will be eager to change their business, or they will be able to manage other competing products with high profits, or they will be held on standby, resulting in blocked sales of products. Besides, manufacturers will still have a large amount of bottoming money to be held by dealers.

There are two ways to deal with this awkward situation.

First, we should continue to give the material incentives to the dealers to promote sales. This is also a prerequisite for manufacturers to retain certain profit margins.

Two, pain is better than short pain, "shock therapy" for channels, resolutely abolish unreasonable promotion policies, reshape channel reputation, and maintain normal channel price system.

　 二、價差高不成低不就應如何調理？ 

The spread is the most common method in setting up the channel price system.

The setting of price difference is directly related to the profit margins of distributors. Therefore, the use of price difference to leverage dealers is also a common tool for dealer promotion.

The price difference is set horizontally, depending on the different regions. Vertically, there are high, middle, low and even points.

The difference between the parity price and the zero price difference is that the profit source of the dealer is not based on the profit margin, but mainly from the sales rebates and subsidies. For example, the price policy of a dairy enterprise is so, the price of the manufacturer to the first class dealer is 10.6 yuan / bag, and the first class distributor is also sold to the lower level distributor by 10.6 yuan / bag, then the lower level distributor sells the retailer at a slightly higher price of 10.6 yuan / bag. The distributor has no profit margin in principle, but at the end of each quarter, according to the quantity of its sales, the higher price rebate per box is given.

For dealers who do not sell according to the manufacturer's price policy, they will not be allowed to rebate or even terminate the supply and cancel their distribution rights. This will not only effectively protect the channel price system, prevent cross regional fleeing and low price competition, but also ensure dealer profits and enhance their enthusiasm.

Due to the difference in parity, dealers are required to advance the operation cost, which requires higher turnover requirements for dealers. Therefore, the actual price difference between high, medium and low prices is more widely applied in practice.

However, the price gradient of the real price difference is not simple, the price difference setting is too low, the promotions of dealers are not promoted enough, and the same as the parity, the dealers are required to pay higher operational costs in advance. But is the price difference set high?

Not exactly.

Too high profit margins are difficult to sustain. In addition, excessive profits will exacerbate competition among dealers and cause negative impact on the market.

First of all, if the profit margin is too large, the dealer will have some idea of making a profit. So some people think of the speculative operation of increasing the overall profit at the expense of a certain unit profit. The problem is not only one, but when everyone thinks this way, the market price will go down too quickly. Secondly, because the distributor can only sell the product to get the high price difference profit, the dealer will compete for the offline customers for the sake of high profits, and to a certain extent, the price war will come out, and the low price selling and fleeing will also come naturally.

Therefore, manufacturers should be cautious when setting the specific price difference.

That is to say, when the price difference is set up, we must seize one degree, that is, the average profit of the product relative to other competing products.

Generally speaking, the following principles should be grasped: if your product is a newly listed product, then your profit to the distributor is slightly higher than that of the average profit; otherwise, it is slightly lower; if your product is an unknown product, compared with other well-known brands, the price difference profit is slightly higher than the average profit; otherwise, it is slightly lower; if the product is inferior to the competing product, the price difference profit is slightly higher than the average profit; otherwise, if the product is launched at the end of the market, if your product is invested more in advertising and publicity, that is, the pulling force is bigger, then the profit margin of the distributor will be lower than the average profit, otherwise it will be slightly higher.

It is worth noting that since the nature of product circulation is in circulation from the low profit domain to the high profit area, the distribution benefit and cost of different regions and levels should be offset each other when the price difference is set up. Otherwise, it will become a hidden danger of the price system. If a liquor manufacturer develops a new regional market, its price will be much lower than that of other surrounding areas.

Of course, in order to prevent the unreasonable price difference setting, the main way of operation of the current channel is to set up the channel price difference conservatively, and to adjust the sales support such as the salesmen of the dealer directly, the sales promotion equipment and the strategy, and distribute the surplus marketing resources to the dealer's "market support system", and turn the profit from the manufacturer to the "benefit". Practice has proved that this is indeed an effective way to win a win-win situation.

    三、銷量返利與“過程”返利孰優孰劣？ 

Rebate refers to the lagging reward of manufacturers in cash or in kind in accordance with certain criteria.

Rebate is characterized by delayed cash instead of cash on the spot. If it is divided from the time of cash, it will be divided into three types: monthly return, quarterly return and annual return. If there are two types of rebates from the way of cash payment, there are two kinds of return and dark return.

Like purchase bonus and price difference, rebate is also a double-edged sword.

As the amount of rebate is generally determined by the amount of sales, that is, sales rebate is the main reason. Dealers have to earn more rebates and will do everything possible to sell more products. This practice has its correct side. After all, increasing sales volume is an important goal of factory sales work, especially in the early stage of entry into the market, the role of this policy can not be underestimated.

However, when the market share of the product has increased dramatically, the defect of sales rebate has become increasingly evident when the focus of factory sales efforts has been shifted to stabilizing the market.

Dealers in the restricted area can not achieve certain goals at a limited time, they will naturally cross the area, dealers will advance overdraft and rebate, and sell products at low cost. Even if they are sold at low prices or even at low prices, they will flee and defame each other, which will eventually lead to confusion or even collapse of the price system.

In fact, sales rebate as a mainstream way of rebate, has its positive role.

The key to the advantages and disadvantages is whether the contrast between "quantity" and "profit" is reasonable.

For example, a cosmetics company has set up three different annual sales targets for each dealer to improve the enthusiasm of dealers, that is, the task of compulsory insurance, the task and the sprint task. The higher the annual sales target is, the greater the rebate point will be at the end of the year, and the rebate bonus is linked to the absolute value of the annual sales volume of the dealer.

For example, dealers will complete the task 2 million, strive for task 2 million 500 thousand and sprint task 3 million, the rebate ratio is 1%, 3% and 5%, that is, the amount is 20 thousand, 75 thousand and 150 thousand.

There must be brave men under the heavy reward, and dealers will sell at will.

Therefore, in order to prevent unreasonable stimulation caused by unreasonable contrast settings, the ratio of "quantity" and "profit" can be slightly set in specific operations, which will inevitably weaken the incentive to dealers.

Therefore, manufacturers often introduce process rebates to adjust them in processing.

Process rebate is a disguised market support, but it is expressed in the form of profit.

The manufacturers set awards for all the details in the sales process, such as the rate of distribution, the vividness of the selling points, the purchase of goods in full, the safety stock, the compliance with the regional sales policies, the special sales, the active distribution and the payment for payment, etc., which not only can expand sales, but also prevent the dealers from breaking the rules of Fan Yunzuo.

Of course, the above measures do not have to be used by manufacturers at the same time. This will make dealers feel that the price policy is too cumbersome, and even become a name for their bargaining to increase the selling cost of manufacturers.

In addition, manufacturers should pay attention to the different emphasis on the rebate in different market stages. For example, during the period of product growth, the emphasis of rebate should be on competing products exclusion, increasing sales, market feedback, distribution efforts, promotion effect and other items.