Distributors in the heavyweight before the advent of large direct supply P & G, a large distributor of dreams can only stay in the dream stage, and distributors will continue to continue the struggle.
See Liu Ruihua Yanzhou in a small alley in his yard. Just cover up the rough housing renovation have not had time, in addition to the living room's look has placed a very old wooden sofa with the same "age" of the coffee table outside, and nothing, it touches on the coffee table several books on business management class books and a lot of information, but also feels the owner of this house is not a general marketplace people.
"I'm no longer doing business, and has just transferred to others, is currently in consultation with P & G to do the final handover." When asked whether the current situation, the 50-year-old Shandong guy with a slightly embarrassed tone said.
Since May of this year, P & G began its national distributor of "shake-up" operation, Yanzhou Changtai wash the limited liability company (hereinafter referred to Changtai) as one of P & G distributors in Shandong, and the other four The P & G with a "shake-up" operation of the first, "Bei Zhu who." Liu Ruihua and he had operated between Changtai immediately became the major financial media coverage of the hot spots.
However, in what has been two months time, Ruihua still unknown Bai Changtai out why the game was kicked out of P & G foot circle. "I think from all aspects of Changtai Zhi Qian Di, we are all basically meeting the P & G Yao Qiu, even if You lack of 鍦版柟, we have been improved, But why are they to replace Changtai? Er for the time why not give us Time? "
Tai Hui is also represents a loss of fast moving consumer goods industry in our country, most distributors are facing an inevitable fate.
4 years of marriage
Back in 1994, Rui-Hua Liu began to start the wash of the business, the military background of entrepreneurs in the initial wash of products do indeed too proud.
"My military status makes me have more resources than others, which do business in the beginning helped me a lot." Ruihua said in the first few years time, the business has done very Changtai fire, This has been extended to the cooperation with Procter & Gamble.
Prior to 2001, P & G distributors in Jining Jining department store was due to defects in the management system, combined with the washing of the industry quite a mixed bag at the end, Jining department store closed down.
Since then, P & G's products appeared in Jining 4,5 months out of stock, in this case, when P & G account manager Tao found Changtai. "At that time Changtai do wash products in Jining are relatively large scale, so do P & G distributors meet the qualifications." Rui-Hua Liu said.
Thus began Changtai After nearly 4 years with P & G alliance, but early progress and not as good as expected Ruihua. As the mode of operation before the Changtai do not coincide with the P & G, so for a long period of time and lost in the operation of Chu Baojie thinking, long run-in period to the beginning of agent Changtai P & G products, difficult.
But Liu Ruihua has not given up and the washing of giant Procter & Gamble, opportunities for cooperation, not only because of P & G's strong enough. Procter & Gamble, the huge advertising costs each year making it known household name, and our washing of the industry, widespread more than a distributor and supplier cooperation phenomenon, before 2003, Changtai no exception.
Liu Ruihua admitted: "do P & G's products can bring the sales of other brands." Distributor in order to earn more profit, and often took the P & G's brand awareness to build their own downline distributors in the face of the authority power to win the next line into the P & G products wholesalers can also consider other brands.
However, this approach has clearly angry with the Procter & Gamble. "Some of P & G's distributor, will provide advanced management of P & G, Procter & Gamble used his competitors at the same time agents who, it is intolerable to Procter & Gamble." Qun Xiang, public relations manager for P & G has said so.
P & G Greater China Sales Manager Niekai Wen has said in previous media, the replacement of some of the main distributors have not reached the required P & G's "exclusive focus." "Dealers have become more and more, and other daily products to expand on them, so good. But for us, not the case. Therefore, only the end of the cooperation. Procter & Gamble, to replace a certain amount every year dealer, find the right partner. "
This seems understandable reasons, but Ruihua is still not understand why. "We are the only P & G introduced Shandong distributors 'exclusive focus on' the."
Before 2003, a total of proxy Changtai 8 brand, but because of Jining in Shandong Province is not very strong economy, so the capacity of washing products market has been less than other cities. In response to this market environment, Ruihua that instead of doing more than one or two brands to concentrate on business, may be able to achieve even greater results. Therefore, gradually give up other brands Changtai agent, began to franchise the brand P & G a step forward. "At the time P & G does not require distributors to implement 'exclusive focus', this is totally out of our own to consider."
In 2003, monthly sales of P & G's products Changtai basically maintained at around 2 million yuan, and this performance in P & G is not of any performance, so in order to get P & G's approval, to Procter & Gamble in 2004 began to focus a Changtai Brand's agent, Ruihua be determined.
"The practice of exclusive, we strive to Jining Heze area P & G satisfied the market to do so, but the end result, Changtai basically set up our own standards and P & G's request." Rui-Hua Liu said, "from 2004 Nianxia half a year since the beginning Changtai every month profit more than ten million. "
However, the advent of good days and did not last too long, less than a year, the fate seems to Ruihua opened a big joke, which makes him very difficult to sustain in this life there is reversion.
On June 23 this year, P & G oral terminate the cooperation with Changtai, July 15, the termination of the agreement in writing in the Ruihua delivery desk. So far, the Department of P & G and long Taivi 3 years 10 months of this marriage on the end of this lightning, and one of the founders of this marriage is still unable to get out Ruihua was shadow.
Sad to cooperate?
P & G entered China in 1988, and then a soap factory in Guangzhou and Hong Kong and Hutchison Whampoa Group, established in the country's first joint venture. In the first 5 years, P & G selected distributors mostly soap factory in Guangzhou's commercial customers around the country, these business customers are basically state-run department store wholesale centers, and supply and marketing cooperatives, or industry and trade company.
These traditional trade enterprises in the years of planning system, the establishment of a commercial radiation network layers, from the provincial stations, the municipal station, county stand up to the village level supply and marketing cooperatives. However, it is a business network has helped P & G's initial business development, Head & Shoulders, Rejoice rely on the network to be successful promotion.
With the initial success of the domestic businesses of Procter & Gamble, P & G to speed up the pace of introduction of various products, and proposed a new distribution concept, emphasizing the market work 4P, namely: product, price, promotion, and shelf management.
But the traditional philosophy behind business customers, but also difficult to change the original concept, coupled with the rigid system of employee motivation is not high, the long-standing arrears of payment habits, resulting in P & G's products in short supply though, but P & G's accounts receivable on the dealer's lot accounts are difficult to recover, and Procter & Gamble's sales staff are mostly first soap factory in Guangzhou, salesman, sales techniques and concepts have significant limitations.
At a time when the management of P & G to recruit their own interns have received professional training, and has been training in the market, many performance has been outstanding. As a result, P & G determined to start training in China with advanced marketing concepts, and can assume the functions of the distributor distribution.
Since 1993, Procter & Gamble sales manager who will be around throughout the country launched a massive search for distributors in the contest, in many regions, and even set up a distributor to expand the title, until 1998, Procter & Gamble dramatic increase in the number of distributors. The Procter & Gamble launched just this period Whisper, Safeguard and other new products, so soon be distributed to each store, Procter & Gamble created a brilliant again.
"The sea of people rely on traditional tactics, P & G product distribution rate has been greatly increased." Hua Tian Trade Co., Ltd. Jinan Century (hereinafter referred to as Chinese-day) deputy general manager Liu Mingtao told reporters that China is at this time and the days of P & G "fates got tied "came together, started nearly 10 years of cooperation the two sides.
"Although at that time, some distributors with annual sales of up to tens of millions or even billion yuan. But this situation did not last a long time. In 1996, China P & G products agent day, the day had hardly been has passed. "Liuming Tao said.
P & G was more than 300 distributors across the country, but the various businesses are relatively small, with washing of industries many brands, product competition, so distributors have begun between the competing, and led to P & G products " changing products "phenomenon.
In 1996, the two figures of foreign retail companies began to emerge in mainland China, but also planted the seeds of P & G distributors in China today on the tragic fate of the evil kind.
December 3, 1996, Carrefour opened the first store in Beijing the same year, Wal-Mart store in Shenzhen, announced the opening, then, P & G will direct supply model into China, which manufacturers sell goods to Wal-Mart first, Carrefour distribution center, distribution center and then re-sold to Wal-Mart and Carrefour. In this way, China has gradually evolved into consumer goods supply chain manufacturers and distributors in more than one branch between the - modern retailing.
From 1996 to 1999, P & G began the reform of the supply chain in China, will be among the distributors of "butterfly" cooperation model to the direct supply of "mirror-type" paradigm shift. According to people who worked at Procter & Gamble said, "butterfly" that the invoice for the purchase of financial and procurement to give sales and marketing to finance list again. Although this mutual ventilation, but merely transmitting information, no useful value-added, while the Ministry of Information, logistics personnel are hidden behind.
In this case, in order to more effectively use all aspects of the supply chain, Procter & Gamble has set "butterfly" team gradually into "mirror-type" team, the so-called Jing Xiang-based team, is the P & G and its customers multi-sectoral Jie He together. Manufacturer's sales staff will work with distributors or retailers of the procurement staff to communicate, while the two sides of the operations manager, finance, IT, logistics, etc. will be on mutual cooperation.
With this change, you can achieve the sale of P & G and its customers have access to multiple back office support for the company, while the focus of work to P & G P & G's plans and sales forecasts above, putting the focus of the market focus to the promotion and channel construction.
As the only Wal-Mart and Carrefour the first two direct supply customers, while P & G is the first internal supply chain integration, many distributors for P & G is concerned, no pressure and the threat of potential.
After 1999, some large chain store large numbers of retail outlets they want and direct cooperation with Procter & Gamble, which undoubtedly squeezing the distribution channels of living space. The P & G began in 1999 and implemented throughout the large customer group, so far, P & G's retail business model to take direct supply ratio of 33% of the total.
"In the current retail area of Jinan City, the terminal has reached more than a dozen stores, they appear to us more and more pressure to bear." Liuming Tao said.
Control in these stores almost all the market situation in Jinan city, the Chinese market in Jinan can only days to explore those retailers can not cover the surrounding district towns, but this effect and the poor. "We have tried to make our sales staff around with cars full of goods directly to Jinan to sell some of the towns, but a month down, we only sold only about 100,000 yuan." Liuming Tao said that this is far less than P & G the required eight million yuan on sales.
In addition, P & G prices to distributors to implement a unified price, has become a distributor of P & G products that do not make money one of the reasons. "To be able to Jining's market bigger, we decided to adopt different prices in different regions as the sales strategy." Ruihua said Changtai often getting goods at high prices from Procter & Gamble, P & G and then to achieve the required sales and cheap sold to wholesalers below.
For example, Procter & Gamble to sell products in a section Changtai price is 10 yuan, Changtai to develop a broader market, often entering these new markets to enter or not to implement preferential policies for low-cost, 9 dollars to sell off the assembly line wholesale business, in the middle of one dollar was paid with ways to other more profitable through the products to be filled, or self-paid with.
But P & G to support the dealer is not without costs, these costs support the basic composition of the two: CSF (customer service charge) and CBDF (customer business development fund). In accordance with the sales of five million yuan Changtai previous operation on the scale, which can be P & G about the cost of three million yuan each year to support, the money to where?
Rui-Hua Liu told the press on these costs is totally inadequate to hold up the entire cost. "From our house to count the daily consumption of these costs and even the remaining, the last two years we have taken different prices in different parts of the implementation of the marketing strategy is the main reason for our loss."
"Changing products" of the troubled
"P & G products 'changing products' phenomenon has developed into a very serious stage, it is very likely to become P & G can not exceed a threshold the future." Liuming Tao said.
As more and more terminals to open retail outlets in the first and second tier cities, distributors have been extremely embarrassing situation. While P & G To be able to guarantee its growth targets, the requirements for distributors are becoming very high, in order to achieve set by P & G sales, distributors had to "changing products." This is obviously a vicious circle, ultimately leading to the P & G products really are very few consumers buy more products piled up in layers of the channel business in the hands.
"Every month, down from the surface, the distributor is to achieve a P & G's request, but not the case." Liuming Tao said, the real total sales of the product only 60% -70% of sales.
Usual "changing products" means nothing more than to drop the price, stickers cost. That is controlled by distributors in their market saturation within a sought after product quantity, in order to achieve the amount set by suppliers, manufacturers get more profit or to fund counter-point to its sales beyond the control of region an act.
But in fact, "changing products," the veteran has a way to exchange goods, but only if both sides distributors have a certain economic strength. Distributors use general business categories, to form a package, the field is a distributor of cash in another suit, this suit is not in accordance with the different categories for different prices, but the sale price unified. Distributors operated in the category, as long as there are several products with a lower price, you can suppress the unit price of many other products.
Thus, as long as P & G's CBDF paste into a very low price point, as P & G's products are voluminous, and can lead to distributors operate many of the brand or category in a lot of points. Tacit approval and even if sales managers is to encourage the dealers of this act, then, while in the performance of unrealistically high, the market price will be washed too messy, the end result is a market disruption, loss of stability of the downstream customer base.
"Changing products" phenomenon not just in Shandong province. Zhejiang Province, who declined to name the original P & G distributors stated: "As an important P & G distributors, we have set a commendable performance, but also distributors and Procter & Gamble has set a model for cooperation. But I'm still less than 2% of the profits because of the initiative out. P & G channel control is not good, these goods is very serious. "
Liu Mingtao even stated: "According to the current situation, if P & G China, factories closed and 2 months, the market is still able to buy P & G's products, because the current pressure in the volume of sales channels too much."
The "changing products," the phenomenon of people think so much more than simple product backlog when too many middle of the channel, the first will cause the price of the confusion, manufacturers are set to crack down on the price system; Second, next to P & G Distributors P & G forecast orders and production will be greatly reduced, over time, it will affect their entire supply chain. "In fact, P & G from now on has been facing a great crisis of the." Liuming Tao said.
For such a serious problem of "changing products" phenomenon, P & G seems to rout. Zai past 10 years, to supply chain thought as a framework and implement business cooperation with distributors, P & G Yi Zhi Yezaidiaozheng Zhenggequdao strategy of buying and selling Guanxi from 绠?崟 important distribution link to the then Zhanlue partners, in every part of the supply chain occupies an important position in P & G has never overlooked the distributor. Why P & G will replace the distributor so frequent it?
A source of: "P & G distributors frequently replaced, in fact, the biggest reason is that China's distributor can not solve," changing products "issue, which P & G runs counter to long-term strategic development." In 1996, Procter & Gamble from the United States the ECR (Efficient Consumer Response Efficient Consumer Response) concept began as a P & G China's long-term strategy, in this strategy, P & G has always been important to distributors in a position of long-term strategic partner, but the Chinese distributor not solve the "changing products," the problems are made in China can not be good ECR implementation.
"In such a case, only the frequent replacement of P & G distributors, to prevent the 'changing products' phenomenon occurred. Procter & Gamble and its distributors from the sales agreement entered into view, replace the distributor of the P & G affected even by his micro. "this source said," solve the 'changing products' is not without problems, the current P & G's distributors all over each province and each distributor over the number of covered market is very small This will naturally serious 'changing products'. as long as the reduction of the number of distributors to expand its coverage of the market area, may be a fundamental control of 'changing products' phenomena. "
Over time, the media enthusiastically participated in the P & G Shandong Distributor "big shake-up" will eventually disappear. But the real hero, most were "cut it down," the distributor will not disappear. Liu Mingtao told reporters that China since the day after the suspension of cooperation with Procter & Gamble has begun to wash products developed outside the industry. "We are now other brands in addition to agents, but also the development of the food, cosmetics, beverages and other industries to see from the current operating state, in good shape."
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