One Of The Series Of Channeling Strategies Under The New Business Pattern: The Conventional Way To Prevent Fleeing Is Fading Away.

Vicious fleeing is a marketing phenomenon that is caused by interests driven by distributors at different levels in the distribution network or business personnel in different markets within the company, resulting in cross regional sales of products, resulting in confusion in product sales prices and tight relationship among channel members, thus affecting the normal sales volume of distributors in other sales areas.

How should we face such a huge market phenomenon?

Are they gambling by collecting money, coding, checking and channeling institutions?

Or redesigning the distribution system of the national unified market?

Is it really marketing "cancer"?

Mr. Xu Yingyun will tell you how to deal with all kinds of new ways in a series of articles on the strategy of managing new businesses.

How can we effectively prevent such a chronic illness?

At present, many pharmaceutical enterprises in China are still stuck in conventional ways of collecting money and coding.

The conventional way of managing and fleeing goods before and after 2000 can achieve some results.

However, with the further improvement of the concentration of pharmaceutical distribution industry in recent years and the vigorous development of p regional pharmaceutical logistics enterprises, these conventional methods can only stop the flow of goods.

Case of A Pharmaceutical Group's fleeing cargo management

In the morning of July 22, 2000, A pharmaceuticals group held a sale auction of a weight loss product (hereinafter referred to as A product) in Fuling. 120 dealers took the bid brand in succession, and after 2 hours of auction, the total distribution rights of 43 regions fell to each household. The guarantee reached 38 million yuan, and the sales task of 200 million yuan in 2000 was also finalized.

After the meeting, A pharmaceutical enterprises signed the regional general distributor agreement with the dealers who had obtained the distribution rights, and defined the rights and obligations of both parties. The agreement stipulates the terms of sale, price order maintenance, and the price they sell to the two level distributors, and the dealers at all levels are required to provide the sales flow direction.

For dealers who do not comply with the agreement, the company will deduct the deposit to cover default losses.

The rebate takes the way of "annual and half year return", and the dealer pays the first year's rebate fee to the distributor second years later.

It is reported that dealers who sell well and do not violate vision operations can receive millions of rebates every year.

All regions are equipped with professional teams to guide distributors, and two level distributors are set up to assist distributors to improve the distribution of A products. Offices also help distributors manage the distribution of goods, tally and distribute gifts to promote sales.

Every time a product is sent to each distributor, a certain quantity is controlled, and a corresponding number is printed on the package. The number and production batch number are printed together. It can not be torn or changed at all, unless the packaging is changed.

A pharmaceutical companies have the Ministry of supervision, which toured the whole country to strictly check dealers' fleeing behavior and market prices, and strictly protect the interests of dealers everywhere.

Once the number is found to be inconsistent with the area, collect the evidence immediately and follow up the corresponding dealer immediately.

By analyzing the above case materials, the author finds that A pharmaceutical enterprises can be regarded as typical representatives of Chinese pharmaceutical enterprises to manage fleeing goods by conventional means at present.

The conventional methods it represents can be briefly summarized as follows:

1. Agency system under margin.

For A products, A pharmaceutical companies sell the total distribution qualification by means of a margin deposit. For example, "Kyushu Tong" won nearly 2 million of the margin in the A product distribution auction in 2000 to win the total distribution rights in Hubei.

A pharmaceutical company is a general term. This sales method is "joint sales agency system": "the significance of paying the deposit by distributors is secondary, and more importantly, it is to maintain a unique credit relationship between manufacturers.

We want the dealer to pay the deposit, but as long as the distributor completes 80% of the sales task without fleeing the goods, the margin will be returned to the dealer in full. "

The margin system greatly stimulates dealers' sense of responsibility for regional maintenance, which is of great significance to prevent fleeing.

Comment: this method is limited to the large brand varieties or large varieties invested by manufacturers, such as A products, which is a high-end product with a retail price of 285 yuan / box.

It is not suitable for varieties of generic drugs, because the number of similar products of generic products is large, it is easy to find substitutes, manufacturers do not have bargaining chips, and dealers will not deposit money for manufacturers of thousands of generic drugs.

However, the product of general medicine is also the most easy to fleeing goods. Therefore, the practice of collecting money is of little significance to manufacturers mainly based on generic drugs.

Two. Strict selection and management of distributors.

In order to ensure that dealers agree with their own operational ideas, A pharmaceutical companies select partners, rather than excessive.

Before the auction of distribution rights, the dealers who lack sincerity, poor reputation and weak management ability have screened out the first insurance to prevent fleeing goods.

In addition to strict selection, A pharmaceutical companies also give "strict management" to dealers: sign strict contracts with distributors.

In the contract, we explicitly joined the "Prohibition of cross regional sales" provisions, strictly restricting the sales activities of distributors to the market area of their own market, and combining the rebates with distributors at the end of the year with whether or not they happen to move goods, so that dealers do not dare to rush goods.

Comment: this method can temporarily ensure the purity of the dealer team, but things are developing dynamically, and can not ensure that dealers will never change their minds.

Even if we change the dealer, we will face the same problem with heavy workload.

The key problem is that the "restricted area" approach restricts the existing distribution capabilities of distributors, especially large regional distributors, and does not allow dealers to fully utilize their network radiation capabilities.

Dealers are like cages. They must not fly high.

Three, regional differentiated product packaging

In different regional markets, the same product packaging adopts different labels, or different distribution channels in the same market, such as hospital and drugstore, are commonly used measures to prevent fleeing.

A products sent to each distributor are printed on the packaging with a corresponding serial number. The number and production batch number are printed together. They can not be torn or altered unless they are changed.

For example, the A products sent to Hubei dealer "Jiuzhou Tong" have printed the word "limited area 027 sales" with laser.

Comments: This product packaging differentiation can more accurately monitor the whereabouts of products, so that dealers will have scruples in fleeing goods, dare not act hastily.

Because if there is a trouble shooting, the manufacturer can track the ins and outs of the product and provide real evidence for handling the incident.

But this way, on the one hand, it has to add production lines, increase the difficulty of production process; on the other hand, it is also not conducive to the unified establishment of product brand unified communication and product image, and may even make consumers misunderstand the fake and shoddy products.

Four, supply quantity limitation and product flow control.

Limited supply and no pressure on distributors.

A pharmaceutical enterprises generally do not exceed 100 pieces of the total distribution, and at the same time, require the total distributor to control shipments to the lower distributors, usually not more than 3 pieces / times; consciously let dealers' inventory in "half full" state.

Dealers themselves are almost sold out, and where are they going to go abroad?

In addition, A pharmaceutical companies require dealers at all levels to do a good job of recording the flow of each box product, requiring the distributor to numbered the lower distributors by region, and each shipment will be correspondingly numbered on the inside of the packaging box, so that the area code, number and batch number of three will be unified.

In this way, we can further let the general dealer know where the products sold by each distributor are ultimately sold, which makes the two or three level distributors in the supervision line of A pharmaceutical companies.

Comment: overloading goods is easy to cause goods to run away because of inventory pressure. However, limited supply can easily lead to the loss of goods in the channel and the opportunity to compete for goods.

It is only a matter of fact to ask the dealer to provide the flow record, because dealers will hide, tamper or even delete the sales records of the non agreement sales area as long as they make a little effort on the computer.

Five, strict reward and punishment system.

A lot of enterprises think that the reason why they can not control fleeing is a very important reason that manufacturers are soft hearted to dealers and think that distributors are old customers for many years.

Case materials show that A pharmaceutical companies have strict rewards and punishments system, and the relevant provisions are written into contracts.

We must severely punish the sales behavior of the cross region: at the end of the year, the sellers who did not comply with the agreement deducted the deposit to cover the default loss; the rebate took the way of "half a year and a half return", and then paid the dealers the first year's rebate fees in the second years' time. When dealers like the "Jiuzhou Tong" had to get 1 million yuan rebate a year, they might not act reckless under the restraint of the margin and the severe punishment system.

Comment: the relationship between manufacturers should be equal, cooperative and mutually beneficial. It is not the relationship between superior and subordinate who manages whom and who supervises.

Strict management of heavy penalties can be more false: dealers face the surface is concealed, dark is contrary to the sun, and even produces reverse psychology collusion with factory salesmen to jointly destroy the market.

Over time, the relationship between manufacturers became more and more rigid.

Six. Specialized anti channeling mechanism.

A pharmaceutical companies set up an anti fleeing agency: the Ministry of supervision.

The Ministry of supervision has been roving the whole country to keep the act of preventing goods fleeing as a routine work, unremitting efforts to check dealers' fleeing and selling at low prices, and also strictly protect the interests of honest dealers.

Once the product number is found to be out of line with the area code, collect the evidence immediately and trace the upstream dealer immediately.

For example, in the area outside Hubei Province, we found "A sales limited to 027 areas", first of all, let Hubei dealers repurchase at the retail price of A products, and then make a margin deduction.

Comments: specialized anti fleeing agencies are usually unilateral in their behavior of checking and channeling, and they can not be admitted in many cases without the accompanying dealers.

At the same time, it does not exclude individual staff members of anti channeling institutions from falsely claiming personal income to falsely accuse dealers, which has led companies to become enemies.

This is very unfavorable for other business personnel to carry out normal business work.

The traditional distribution mode is to delineate the activity area of the factory office as the sales area of the distributor, but the result is that some dealers have surpassed the established regional scope. Therefore, there are so-called management means such as collecting money, coding, checking and channeling institutions such as A pharmaceutical companies, and they want to force the sales behavior of dealers to "bet" within this scope.

Gambling can only cure the symptoms but not cure them; sometimes even the standard can not be cured.

Facts also seem to prove this point: A pharmaceutical companies this way of management is basically not adopted.

Why have they done so little?

It has to start with the change of the distribution pattern of medicine in China.