Today distributors face three major challenges. First, the distribution model that relies on earning product price differences is becoming increasingly difficult. Originally, it relied on information asymmetry, but now we are in an era of high information symmetry, making direct connections between manufacturers and consumers simple. Second, brands and consumers are becoming stronger in the interconnected era. For example, in the liquor industry, several famous liquor brands have basically fully controlled the channels; on the consumer side, influential consumers have emerged, such as opinion leaders or fans, leading to C2C models like communities or micro-businesses. Third, the application of big data and the rapid iteration of internet tools have left traditional-thinking distributors unable to fully adapt, let alone leverage and apply them, which is also related to path dependence. In the future, distributors should develop in the mobile internet era, so the author proposes the concept of community marketing distributors.
Business Forms Determine the Birth of Community Marketing Distributors
Why propose the concept of community marketing distributors? The author considered this after analyzing various business forms in the liquor industry. Let's look at the current state of several business forms. Currently, the highest proportion is still the traditional distributor agency system. In recent years, the biggest problem with the agency system is the price-difference mindset. The agency system is a product of a previous era, mainly relying on information asymmetry to earn profits. In the liquor industry, the differentiation of agents began in 2012 because all industries suffered the dual impact of the economic crisis and mobile internet. Most industries had severe inventory, and the national supply-side reform was also proposed due to this dual impact. As a result, e-commerce, under the guise of the internet, began to please consumers with low prices and traffic-grabbing tactics, causing distress for manufacturers and distributors. During this phase, various industries and even companies began to reflect and seek various paths to solve the e-commerce problem. After nearly five years of deep adjustment and management measures, several famous liquor companies have successfully reduced inventory and basically moved onto the track of smooth price sales. This state began to reverse from Double 11 in 2016, marked by e-commerce no longer using famous liquor at low prices to gain traffic. As a result, e-commerce channels began to transform. Currently, e-commerce is a good tool as a supplement and for communication, but whether it truly brings significant sales is another matter.
Super terminals appeared earlier than e-commerce, but currently not many have developed significantly. Many chain organizations are valuable but still far from profitable. This is not a problem that can be solved by models or capital; it is closely related to the liquor industry. Retail terminals use famous liquor to attract traffic and combine other products to make profits, but this model is difficult to implement locally. First, there are relatively few consumers of famous liquor; second, the supply of famous liquor is scarce; third, consumer awareness has increased, and consumers only buy products that offer good value for money, such as only buying Moutai and Wuliangye products, not accepting bundled other products. The hidden sales of the group-buying channel. Since being valued in 2007, the group-buying channel peaked in 2012, although it is difficult to count its proportion. Industry insiders generally believe that the sales of the group-buying channel are still significant. The group-buying channel not only focuses on high-quality consumer resources but also has a driving effect. Although government group-buying sales declined severely in 2013, business group-buying and banquet small group-buying are currently the leading forces in the liquor market. Traditional tobacco and liquor store channels, which were originally the main sales channels for liquor, began to decline in 2013 and even fell into an awkward position. First, government consumption declined severely; second, business consumption was directly supplied by manufacturers; third, general consumers were taken away by e-commerce and super terminals. Currently, tobacco and liquor stores mainly rely on small price differences of famous liquor, price differences of regionally popular brands, special policies, and display policies for other products. A considerable number of tobacco and liquor stores have transformed into community convenience stores.
The Significance and Value of Community Operators
From the changes in the liquor business forms and the liquor industry, we see the beginning of a brand-new era. The reason for proposing the concept of community operators is to introduce community concepts and thinking methods to transform oneself on the basis of distributors. What is a community? A community is the use of social group power, especially in the liquor industry. Originally, it mainly relied on government influence to affect business. Now changes must be made because government influence has become very weak in this industry. What will influence next? It is the power of social groups. Our liquor merchants should establish community organizations on the original basis, grasp the core local consumption forces, control the high ground and influence, and turn the current passive situation into an active one. Distributors also need to make a second change: transform into marketing merchants. Distributors mainly focus on traditional channels, while marketing merchants do community work with one hand and channels with the other. Without community, you cannot do well; without tradition, you cannot grow big. Form a community marketing service platform in the region, forming a stable triangle with the community and channels.
Communities gather core consumers, and channels integrate industry resources. Communities serve as the starting point for word-of-mouth influence, and channels serve as the port for amplifying word-of-mouth, thereby achieving regional success. How do community marketing distributors implement? The author believes it can be implemented in three stages.
Therefore, leveraging the trend of manufacturer-distributor integration, building a consumer ecosystem in the region is the only way for liquor merchants to survive and develop in the future. Thus, for liquor merchants, community is a strategy for future development; from the current competition perspective, community is a model; from the industry competition perspective, community is a positioning; from the enterprise level, community is a mindset. So community is not only a reflection of a unified direction but also a methodology different from competitors.
To Be a Good Community Marketing Distributor, Internet Tools Are Essential
To do community marketing well, the most important tool is to leverage the internet platform. Specifically, there are three points: First, sell goods. Balance sales and fan development to achieve awareness, recognition, and purchase. Gather fans. Second, balance quality and word-of-mouth promotion, with keywords being functionality, fun, and trendiness. Third, build a platform. Go beyond selling goods to achieve win-win, alliance, and integration. How to sell goods? First create awareness, then promote, and continuously influence, such as educating about product features. In promotion, do good distribution, connection, and ignition. In influence, achieve activation, coherence, and rhythm.
How to gather fans? This requires bosses and employees to work together to create momentum. The first step is boss recognition and employee incentives, with the key point being unified thinking and unified interests; the second step is selecting the right channels with methods and benefits, with the key point being to think of ways around implementation; the third step is to advance step by step and focus on ignition, with the key point being resonance and momentum.
How to build a platform? Find leverage, amplify resources, and build an ecosystem. How to find leverage? You can adopt the regional success amplification effect: be one zhang higher, one chi deeper, and one cun wider. How to amplify resources? You can integrate alliances and then amplify, meaning to connect internal needs, integrate forces, and seize new opportunities. How to build an ecosystem? Form a value circle, achieve a big closed loop, and achieve three key points: connect upstream with manufacturers, connect midstream with resources, and benefit downstream users. Of course, different types of fans require different methods. Generally, fans are divided into four types: investment-type, propagation-type, iteration-type, and reverse-type. For example, investment-type fans have momentum, high consumption, and can spread, so you need to create scenarios, give policies, and share dividends; propagation-type fans have circles, spread a lot, and have medium consumption, so you need to borrow circles; reverse-type fans have circles, care about face, and have high consumption, so you need more tastings, change concepts, and tap potential. After gathering fans, you should build groups to communicate and exchange feelings through group interactions, enhancing stickiness. In the group, do daily communication, share matters, help each other, build a friendly community, and enhance neighborly feelings. Most importantly, do offline activities for implementation.
Additionally, it is worth noting that when community marketing distributors do community work, they need to break through five circles: the authority recognition of the new power circle, the strong support of the relatives and friends circle, the word-of-mouth amplification of the communication circle, the daily consumption of the mass circle, and the win-win cooperation of the business circle. The new power circle is the most active and health-conscious consumption circle locally, such as hidden government consumption people. This group has characteristics like consumption leadership, civilized drinking, circle diffusion, and strong momentum. To gain their recognition, you need to do four things: cultural recognition, product tasting, circle awareness, and consumption leadership. The relatives and friends circle is a relatively strong relationship and belongs to iron fans in fan operations because of high trust. Even without benefits, they will strongly promote based on kinship. So the conversion rate of the relatives and friends circle is relatively high. They are both consumers and promoters, making them the best circle for short-term product volume. To gain the support of the relatives and friends circle, do four things: expand the circle, quickly mobilize, emotional connection, and relatives and friends alliance. The communication circle generally refers to practitioners in traditional and new media. Although this circle is not the consumption force for a single brand, they have wide connections and spread within the circle, making them the booster circle for word-of-mouth amplification. To amplify word-of-mouth in the communication circle, you need to ensure content authenticity, rapid spread, form selling points, and become value. The mass circle is not the main consumption force for products, but liquor has symbolic consumption significance, basically consumers drink for others to see. Whether it is a mass brand or luxury, mass foundation is particularly important. In this circle, you need to create trends, maintain value, keep up with the times, and repay the public. The business circle is about establishing a solid cooperation foundation with product operators and partners, achieving win-win cooperation and benefit sharing, so that every operator becomes a regional spokesperson for the brand, forming a community of shared interests. To expand word-of-mouth in this circle, also do four things: benefit-oriented, stable relationships, balance of reason and benefit, and strategic cooperation.
Additionally, there are five issues to note when establishing the system of community marketing distributors. First, the value of community marketing distributors: not to sell products as the goal, but to operate people to achieve commercial value; second, the positioning of community marketing distributors: only as community and channel integrators, not as product sellers; third, the model of community marketing distributors: master a methodology of product communication, fan gathering, and cross-border connection; fourth, the weapon of community marketing distributors: use internet community thinking or industry attributes to find heavy weapons for implementation; fifth, the tools of community marketing distributors: use tools like WeChat to improve operational efficiency and enhance service levels and benefits.
Bio: Niu Enkun, founder and chairman of Liangjian Marketing Consulting Company, founder of the liquor industry base model, and internet community marketing expert.
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