Editor's note:
For large and medium-sized enterprises, it is common to build channels through the establishment of first-tier dealers, second-tier dealers, and third-tier dealers. However, for small businesses that are eager to grow, the success or failure of the initial operation often lies in No successful investment. After the investment, chaotic dealer management became a stumbling block to their continued development.
Here is one such case. After successfully recruiting more than 1,000 dealers (franchise stores) within 5 years, the company found that many dealers have contradictory operations, and integrating marketing channels has become a top priority. With the decisive integration of more than 1,000 dealers (franchise stores) into 35 operating centers, companies can sprint new sales targets with no hesitation.
In early August, Dai Weisheng, president and CEO of GE, the international lighting giant GE Consumer & Industrial Products Group, came to a conference room in southwestern Shanghai to formally sign a three-year agreement with former rival NVC Optoelectronics Technology Co., Ltd. According to the agreement, GE will abandon its original sales channels and use NVC as a strategic partner of light source and supporting electrical appliances to sell its corresponding products in mainland China (except Hong Kong, Macao and Taiwan).
“Lighting is only a small head of GE's profitable projects in China, and GE's previous sales in China are not ideal,†said a former GE person. Last year alone, GE’s rival Philips’ sales of lighting products in China exceeded 2 billion yuan, while several domestic lighting giants such as NVC and Foshan Lighting also sold more than a billion yuan, but GE Lighting is in the entire Asia Pacific region. The sales are less than 1 billion yuan. Multinational companies are smart, and when they can't achieve absolute status in a market, they choose to turn their enemies into friends.
Recognized by international opponents, many people think that NVC's channel is perfect, but most people outside are not aware that just two years ago, NVC was still trapped in the ocean of dealers' constraints. Without a major reform on the channel, NVC is difficult to get to today.
Have been successful on the channel
Seven years ago, in the lighting industry, grocery-like shops abound, and there were no stores. Looking at this opportunity, accompanied by a good policy of letting profit, NVC has achieved great success in 5 years.
The world is changing fast. NVC, which was established eight years ago, was only a small enterprise with a registered capital of 1 million yuan. Its origins were largely due to decisive and successful investment.
Time began 7 years ago. At that time, for NVC's boss Wu Changjiang, corporate funds were stretched, and the market competition has become hot, and the advertisements of lighting equipment that consumers can know are overwhelming. Obviously, there is no ability to advertise, that is, it does not necessarily work. No money, but want to open the market quickly, what should I do?
"At the time, I saw a lot of home appliance companies doing well, not only on the street, but also very eye-catching, which gave me a reminder." Wu Changjiang recalled that he was inspired by home appliance companies. "In fact, no one." Knowing if you can succeed, just hold the attitude of trying."
Around 2000, China's lighting sales market was a grocery store, and what brands of products were there. In July of that year, a small shop with only a dozen square meters of exclusive lighting equipment was hung on the signboard of NVC. This pilot store appeared in Shenyang. Although it is a specialty store, in fact, it only hangs the NVC signboard. In the shop of more than ten square meters, only a small piece of products specializing in NVC is drawn. NVC will also subsidize some funds for this store.
In the first year, there were more than 20 such “specialized stores†that NVC pushed. "The sales of these stores with NVC signs are better than the average store." At the end of the year, when the dealers were eating, Wu Changjiang got the information from the chat. Wu Changjiang’s eyes lit up and this pattern was quickly determined.
Wu’s business is: the manufacturer has posted it. NVC attracts franchisees, does not need to join the fee, and also gives 30,000 yuan subsidy to each store that is willing to sell NVC products, and the store also allows to sell other products. What is required is that the store hangs the signs of NVC, these signs Produced by NVC. This measure has continued to this day. In fact, NVC's specialty store models are diverse. According to the size of the sales volume, NVC cooperates with the dealers who operate the store by adopting various advance payment, co-financing and decoration and returning through payment.
Word of mouth is a magic weapon, and the business of the manufacturers has attracted a lot of people, many dealers began to take the initiative to sell NVC products. Wu Changjiang's goal has been achieved: Through the promotion of the striking storefront, NVC is easy to remember, and quickly established its image and influence in the industry.
The expansion is so fast, the newly opened specialty stores are springing up, and the biggest benefit brought to NVC is not just to save an advertising fee. The dealers covered all the cities from the provincial capital to the county town. The situation that originally required NVC to go to various places for channel expansion did not appear. Sitting in Huizhou, these active door-to-door dealers have initially established a marketing channel for NVC. As of now, NVC Lighting has more than 1,600 stores.
Integrating 35 operating centers to win more
In 2005, NVC finally felt that more than 1,000 dealers could not manage their own business, so they decisively integrated and established an operation center, which finally guaranteed the development momentum. But no one can say that a fully functional and powerful operation center system is a perfect end.
"This is the case." In April 2005, at a meeting of NVC in Nanjing, Wu Changjiang said this. Feeling the entanglement brought about by the distribution level, he finally made a choice.
Things are also related to the expansion of the dealer team. In 2005, there were nearly 1,000 dealers in the country. These dealers all happily took the signboard of NVC and started to go home. In other words, these dealers are directly managed by NVC.
But not everything goes well. One day, Wu Changjiang received a complaint from a dealer on his mobile phone, and another dealer in his area was carrying a strong capital to carry out the price reduction. The dealer’s goods could not be sold at all, and the loss was not the first. Wu It was also painstaking to resolve, but since then, there have been more such complaints.
As the dealer team continues to expand, friction continues to emerge. These dealers have no affiliation with each other. It is very common for several dealers in a region to have a large amount of smuggling or price wars in order to "run", and NVC ignores the dealers to some extent. Management, which has a negative impact on your brand. NVC questioned, the dealers shoved each other, and some dealers even directly sued Wu Changjiang, making it difficult for NVC to solve the problem.
At the stage of the company's expansion, it is necessary to continue to join the dealers to increase the sales of the company, regardless of the friction between the dealers, and now, the rapidly increasing franchisees make the company a headache.
“No change 1 Wu Changjiang convened the management of the company to put forward its own suggestions: “Integrate dealers, set up a large operation center, and manage the operation center and second- and third-level channels by core dealers. NVC can concentrate on production and Research and development. â€
The opposition is endless. Some opponents even said that Wu Changjiang’s approach is to “put the tiger back to the mountain†because all the manufacturers want to take back the control of the dealers’ channels. Once the dealers are on the side of the princes, the climate will turn to the NVC.
Wu Lijiang decided to reform. In April 2005, NVC integrated hundreds of large-scale dealers across the country into 35 operating centers. Its role is not only sales, but also a local logistics, capital and shipping platform. Other small agents directly contacted the operation center and became a lower-level operation center, laying the network to the county level.
In the past, NVC had to face nearly one thousand dealers directly. All the things that the dealers shipped and collected were handled by NVC staff. Even if some dealers with small purchases, NVC would have nothing to do. The management of the land, whether it is shipping, scheduling logistics or collecting money... These small dealers consume a lot of energy for NVC.
With these 35 operating centers, NVC can free their attention. The operations center can ship to the next level of dealers, arrange logistics, and even help the NVC to collect money.
But the game between manufacturers and dealers is always there. "Although it seems that there are common goals, the contradiction between dealers and manufacturers still exists." Gao Jianfeng, a partner of the consulting consulting company. The contradiction he said refers to dealers paying more attention to short-term sales. When there is a contradiction between brand and sales, manufacturers pay attention to the reputation of the brand, while dealers still see sales.
In many areas, vendors are working hard to change the dealership's “bigger†situation and reduce the number of dealers who can talk to vendors. In the well-known fast-moving consumer goods sector, because the gross profit margin is less than 10%, manufacturers are working hard to reduce the number of dealers in order to save costs and maximize benefits. P&G’s “great cleaning†of dealers was a typical event. Some insiders pointed out that Wu Changjiang chose to establish a successful operation center, in addition to the dealer's friction is too tight, the lighting industry's gross margin is still more than 20% is also a reason.
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