---
title: "BC Integrated Operations Will Ultimately Replace Deep Distribution"
description: "A fundamental reality: after 2010, no well-known new brand rose through advertising (perhaps Xiaoguan Tea is an exception); similarly, no new brand achieved fame through deep distribution (perhaps Jiangxiaobai's deep distribution after IP ignition is an exception). Advertising-driven (brand-driven) and channel-driven approaches are no longer the driving forces for corporate rise. The distribution logic of channels is giving way to the sell-through logic. Deep distribution is distribution logic, while BC integration is sell-through logic. Distribution solves the 2B problem, while sell-through simultaneously addresses both B and C. Once sell-through is solved, distribution is no longer an issue."
author: "刘春雄"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-06-17"
language: "en"
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---

# BC Integrated Operations Will Ultimately Replace Deep Distribution

> A fundamental reality: after 2010, no well-known new brand rose through advertising (perhaps Xiaoguan Tea is an exception); similarly, no new brand achieved fame through deep distribution (perhaps Jiangxiaobai's deep distribution after IP ignition is an exception). Advertising-driven (brand-driven) and channel-driven approaches are no longer the driving forces for corporate rise. The distribution logic of channels is giving way to the sell-through logic. Deep distribution is distribution logic, while BC integration is sell-through logic. Distribution solves the 2B problem, while sell-through simultaneously addresses both B and C. Once sell-through is solved, distribution is no longer an issue.

There is a fundamental reality: after 2010, no well-known new brand rose through advertising (perhaps Xiaoguan Tea is an exception); similarly, no new brand achieved fame through deep distribution (perhaps Jiangxiaobai's deep distribution after IP ignition is an exception).
**Advertising-driven (brand-driven) and channel-driven approaches are no longer the driving forces for corporate rise.**
**The distribution logic of channels is giving way to the sell-through logic.**
Deep distribution is distribution logic, while BC integration is sell-through logic.
Distribution solves the 2B problem, while sell-through simultaneously addresses both B and C.
Once sell-through is solved, distribution is no longer an issue.
**-01-**
**Deep Distribution at Its Last Gasp**
Those familiar with deep distribution might consider:
√ In recent years, have any new brands succeeded through deep distribution?
√ Have any new products from major brands succeeded through deep distribution?
√ Even internet-famous brands, have any succeeded offline through deep distribution?
√ In first-tier markets, are there no longer second-tier brands in small terminal stores?
√ Has terminal customer relationship management given way to terminal resource fees? Such as small store display fees and stack fees.
√ Apart from manufacturer sales guides, is store owner recommendation only a phenomenon in stores below the township level?
**These phenomena already herald the end of deep distribution.**
**Perhaps deep distribution continues, but it can no longer bring success to new brands.**
So, what model will replace deep distribution?
**BC Integrated Operations.**
**-02-**
**Deep Distribution Loses Its Offensive Edge**
Marketing evolution is the process of channels getting infinitely closer to users. Deep distribution reaches the terminal, which is the stage where channels are closest to users.
Compared to sitting at the store, distribution is closer to users. Distribution means traveling merchants; sitting at the store means stationary merchants.
**Early deep distribution was an extremely offensive marketing method.** Reaching the terminal through deep distribution only approaches users but cannot directly connect with them.
Deep distribution eliminated stationary merchants because they were farther from users.
Deep distribution succeeded in a specific period under a basic premise: distribution equals sell-through. That is, the following two actions in deep distribution were effective:
**First, display equals sell-through.** At a certain time, this was indeed the case. The early "Seven Steps of Deep Distribution" solved the problems of distribution, display, and shelf management, with the premise being "display equals sell-through." This was true in the early days of deep distribution.
**Second, customer relationship equals recommendation.** Manufacturers and store owners built good relationships, and then store owners proactively promoted the products. This was also true in the early days of deep distribution.
Now, the current situation at the terminal is that "distribution equals sell-through" has failed:
**1. Display depends on fees.** Whether in KA stores or small retail stores, especially in tobacco and liquor stores, without paying fees, there is no display. Even after paying fees, shelf management is needed to maintain the display.
**2. Above the township level, store owner recommendations have disappeared.** The principle behind store owner recommendations is "acquaintances become regular customers," which still exists in townships.
Currently, top brands rely on three main actions for terminal sell-through: **stack displays, sales guides, and promotions.** Stack displays are bought with money, sales guides are deployed from above, and promotions depend on fees.
Every action requires fees (money).
Every store might have second-, third-, or fourth-tier brands, but few new brands occupy a store long-term or with high density.
Only long-term, high-density occupation of a store can help a new brand succeed.
**Now, deep distribution may ensure the continued operation of first- and second-tier brands, but it is no longer capable of boosting the success of new brands or new products.**
**-03-**
**Channel Mismatch for Emerging Brands**
Zhao Bo, founder of New Distribution, proposed a phenomenon: **Traditional brands cannot do well online, and emerging brands cannot do well offline.**
This is indeed the fact!
**Brand is channel pull, distribution is channel push. Brand-driven and channel-driven together constitute channel push and pull.**
Emerging brands' IP serves as a substitute for brand, and it still has user pull. Why does IP fail in channels?
Some have proposed multiple explanations. For example, the price systems online and offline are different; the user groups online and offline are different; the SKU structures online and offline are different. These all make sense.
**We can do a calculation instead of logical analysis.**
Currently, the emerging brand with the largest sales volume is Three Squirrels, with online sales of just over 10 billion yuan. Now, deep distribution has leading companies with offline coverage exceeding one million terminals. Because there are about 6 million retail terminals in China, and about the same number of catering terminals. Total terminals exceed 10 million.
If 10 billion in sales is spread across one million terminals, the average per store is just over 100 yuan.
With an average of just over 100 yuan per store, how many stores are willing to sell long-term?
**Therefore, when emerging brands enter offline channels, a mismatch occurs:**
When a store shelves the product, if no users buy it for a period, the store considers it "not selling" and removes it.
When users want to buy it, they go to the store but find it out of stock, so they never go to the store to buy it again.
It's not that emerging brands haven't tried offline channels, but that their offline channel efforts have basically failed.
**Failure in offline channels means the channel's "matching" failed. When someone sells, no one buys; when someone buys, no one sells.**
**In fact, the terminal is a scenario for "matching" manufacturers and users. If the "matching" is unsuccessful, the terminal gives up.**
**-04-**
**Minimum Unit**
Minimum unit is a term I have used for a long time, and it is very useful, especially in micro-operations.
**The reason early Chinese companies favored deep distribution is that the "minimum unit" of deep distribution is the store, allowing distribution store by store, even if coverage is low.**
In the past, startup companies lacked funds, so they had to start with channels. The reason is that the minimum unit of channels is the store, with low entry costs. If one store survives, it brings stable sales.
**Brand advertising and IP ignition are different; they basically take the national market as the unit.**
It is said that Ye Maozhong first asks how much money you have when taking a project; if you have no money, he gives up. This is truly responsible to the user.
What advertising is most effective? Advertising with a lot of money is not necessarily effective, but advertising with little money is definitely ineffective. Persuading people with little money to advertise is pure deception.
In the past, CCTV advertising was valued because even all provincial stations combined did not have the influence of CCTV. Because advertising basically takes the whole country as the minimum unit. Of course, there were also some advertisers who mastered the skills, such as Shi Yuzhu, who early on used the county as the advertising unit. Nao Baijin started with low funds early on by mastering this advertising trick. However, this phenomenon no longer exists.
**The same goes for IP. Either it ignites, or it fizzles. This is the logic of IP ignition.**
**Once an IP ignites, it is not just one store, one county, or one province, but the whole country. Internet ignition is borderless ignition.**
That is to say, in past marketing methods, the minimum unit for 2B was the store, and for 2C it was the whole country. Unless one had considerable strength or a gambling spirit, one generally lacked the ability or dared not take the whole country as the minimum unit.
**If a single store survives, the region survives; if the region survives, it can go national. This is the value of operating with the minimum unit.**
**-05-**
**BC Integration is Sell-Through Logic**
BC integrated operations have two key words: **one is the store as the minimum unit; the other is two-way "matching" sell-through density.**
**In BC integrated operations, B (small b) refers to terminal stores, and C refers to users.**
Small b naturally takes the store as the minimum unit, and C refers to users within the store's business circle radius. Both take the store as the minimum unit.
Taking the store as the minimum unit means that regardless of whether it is a big or small brand, the operational threshold is low.
As long as a single store can be activated, it can "roll out" to activate a small area, and "small area rolling" can activate a large area. **Therefore, in 2020, we proposed three major strategies: single-store rolling, small-area rolling, and national sensation.**
Single-store rolling and small-area rolling are suitable for innovative brands. All three strategies are suitable for well-known major brands.
**Two-way "matching" new sell-through means that the terminal (small b) mobilizes the C-end, and the brand owner mobilizes the C-end, forming a symbiotic ecosystem within the small b business circle radius in the short term: stores are willing to sell because people buy; users can buy because someone sells.**
As long as a symbiotic ecosystem is formed, a store is revitalized.
One push may not be enough, but multiple rounds of pushing usually can. This model of sell-through is what we call **new sell-through.**
The effect of BC integrated operations is best on new brands and new products, precisely because it can quickly push a new product to form a symbiotic ecosystem in the short term.
**-06-**
**After Deep Distribution Comes BC Integration**
We must face a reality: **the current distribution is actually bought with resources, not the deep distribution system of the past; it is a changed distribution.**
Display equals sell-through, recommendation equals sell-through. That era is gone. Even if it occasionally exists, it is only in marginal areas of the market.
Traditional major brands may be able to maintain themselves with deep distribution. However, it is only maintaining the name of deep distribution by investing resources.
**In the future, distribution will exist forever, but it will be difficult for distribution to drive channel progress.**
BC integrated operations, because the minimum unit is the store, have no entry barriers for big or small brands, emerging or traditional brands. Because BC is relatively balanced, with push and pull combined, quickly activating the minimum unit to form a symbiotic ecosystem in the short term is a relatively ideal marketing system.
**Deep distribution only approaches users; BC integrated operations connect with users. Deep distribution will ultimately be replaced by BC integrated operations.**
**-07-**
**The Law of Marketing Evolution**
Marketing is confrontational competition. Either you die or I live, or a terrifying balance.
There is no win-win between competitors.
Any marketing method (tool, technique) is valuable because: **I know it, but others don't.**
When others imitate and learn, the effectiveness of the marketing method declines.
When all competitors can use it, it no longer forms a competitive advantage. Unless you take what others can do to the extreme. But achieving the extreme also has costs and may not be worthwhile.
**Therefore, marketing must continuously evolve, producing new marketing methods (tools, techniques) to form new competitive advantages.**
Take channel evolution as an example. In the early days, there was large-scale wholesale, which was stationary merchants.
Later, "center of gravity sinking" appeared, from "provincial agents" to "city agents," and then to "county agents." This process is also a process of approaching users. Companies that took the lead in "sinking the center of gravity" gained channel competitive advantages. This period was after 1998.
**Around 2000, when "county agents" became the basic pattern, "deep distribution" emerged. Deep distribution is also a process of approaching users, but deep distribution only reaches the terminal, and the terminal is the endpoint.**
**Deep distribution has reached the terminal; the next step must be connecting with users. This is the inevitable law of channel development.**
**BC integrated operations mean possessing the terminal and connecting with users.**
**There are two paths to reach the C-end: one is through emerging internet channels B2C; the other is through traditional channels F2b2b2C, which is BC integrated operations.**
After deep distribution, BC integrated operations are inevitable.
Source: Teacher Liu's Digital New Marketing Author: Liu Chunxiong
Tips: Once the report is adopted, 400-2000 yuan will be paid.


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