Click the image for details Introduction: The final shot is important, but can changing ten forwards make Chinese football win? The terminal is where products are sold, often referred to as the "final shot," and it is extremely important. Since it is important, companies naturally attach great importance to it. The result is that a large amount of resources are invested in terminals, known as 'terminal is king.' Many companies have proposed passionate or even fierce slogans such as 'terminal wins,' 'decide victory at the terminal,' or even 'fight desperately at the terminal.' The general logic is: since the final shot is the most important, let's all shoot. Midfielders, defenders, goalkeepers, production, supply, R&D, finance—can be makeshift; the forward is key, and the goal is to score. Nowadays, companies generally place great emphasis on terminal construction: special displays, terminal merchandising, DM, various activities—everything that can be done is done. There is a famous "eight steps of terminal visit" in the industry, and many companies wish to make it ten or twenty steps, believing that the more "detailed" the work, the more controllable the process, and the more "solid" the terminal work will be. In fact, the long-advocated "terminal is king" may be the biggest pitfall in corporate marketing over the past decade or so. First, the role of the terminal is explicit; as soon as investment is made, results are visible. Many people do marketing by intuition, and the role of terminal work is greatly exaggerated. More critically, a company's operations and marketing are a holistic system. Resource allocation must consider all links. Overemphasizing the terminal often leads to deviations in resource allocation. Once resource allocation is wrong, the harder you work, the more you fail. Professor Zeng Xiangwen once gave an example: A company had poor overall sales performance, but some individual terminals sold well. The boss found that the promoter at that point was hardworking, familiar with the product, and amiable, so he concluded that performance depends on the quality of personnel, and thus trained and replaced people... Is this scenario very familiar? The result is almost invariably: competitors offer higher wages, and all the personnel you painstakingly trained and recruited jump ship. The key is that you cannot follow up because competitors have profits while you do not. Your system is poor, so overall performance is poor. You changed the promotional force, but the same promotional force can create greater value in a better system, so they leave, and your partial efforts are just making wedding clothes for others. Another more common phenomenon. A company's new product has been on the market for several months, the market has not moved, but some terminals are selling well. The company finds that the terminal has good display, prominent image, store promotion, and proper maintenance. So: display is the life of sales, terminal construction is the key factor in marketing success, so replicate, a nationwide terminal movement... The result is also similar: you invest a lot of terminal expenses, but sales increase limitedly, and profits further decline. There are not many terminals that perform well, and even if there are, they often decline quickly and cannot be maintained. Worse, it is easier to go up than down. Once your expenses are invested, it is difficult to withdraw them, and high personnel maintenance costs become an unshakable burden for the company. The logic is similar: Your system is poor, so the overall market is poor. Individual terminals, due to accidental factors or misjudgment, invest resources in you, which cannot be replicated. Because terminals will invest resources in systems that can generate more value. Unless you maintain high expenses, pay platform fees, and bribe terminals in disguise, this will cause you more serious losses; when bribes decrease, sales collapse. Examples previously cited by Lao Miao. In the past, Master Kong could beat Uni-President by relying on its channel intensive cultivation, and Coca-Cola's biggest weapon to defeat Pepsi was direct control of terminals. Some large brand owners have tasted the sweetness in operating terminals. So many emerging brands and second- and third-tier brands are also imitating, from Master Kong's channel intensive cultivation to Coke's 101 model. Countless senior marketing professional managers who parachuted into private enterprises waved the banner of terminal construction, but almost all failed without exception. The lack of marketing cannot be compensated by strengthening sales. The biggest deficiency of second-tier brands is weak communication with consumers. A brand that has not entered the hearts of consumers, simply placed in front of consumers, has very high channel and terminal costs. More serious and common is that due to poor communication with consumers, the better the terminal work, the higher the exposure, the lower consumer acceptance, and the faster the product dies. This is the fundamental reason for the saying "not doing terminals is waiting to die, doing terminals is seeking death." Let's calculate an account that chills third- and fourth-tier brands. For the same special display, P&G only needs to do a special price to get it for free; Slek may need to pay 1000 yuan per slot; some third-tier brands may need 2000 yuan per slot, plus the price difference for the special price. Sadly, P&G may increase sales by 10,000 yuan, Slek may increase by 5,000, while third-tier brands may only increase by 2,000 or even less. Seemingly the same battlefield, different brands are not competing on the same platform at all. This is very unfair. The so-called terminal is king, many times, is that big companies lead you to an open area called "terminal," and then use a weapon called "brand" to shoot you, who are unarmed (without brand), and you have no power to fight back. The so-called "terminal is king" is only a local feature of the "channel is king" era. The first decade of this century was the era when "modern terminals" represented by supermarkets and hypermarkets were shining. Terminal resources were scarce; whoever was closer to consumers had more say, and traditional consumer goods companies mostly went through distributors to terminals, basically not contacting consumers. Greater market voice and scarce resources made terminals very strong against most suppliers, with big stores bullying customers. Moreover, retail system buyers are mostly trained in strict purchasing, and facing most domestic sales personnel with low professionalism, they easily play with them, squeezing suppliers to the maximum, including manufacturers and distributors. Life was too comfortable, so they inevitably got carried away. Many terminals changed from sellers to platform operators, and their profit model changed from earning sales profits to collecting "protection fees" (various entry fees, barcode fees, anniversary fees, distribution fees, etc.). Whose brand can afford more platform fees, whose brand can face more people in a fixed business district, can be sold in these expensive terminals. Some niche and personalized products are shut out. This makes the products sold in major terminals increasingly similar, and consumers gradually lose interest in visiting stores. Perhaps some large retailers are proud of this business model, but changing from a seller to a platform operator is really a degradation. Sellers aim to provide customers with more convenience, better experience, and greater value, while platform operators focus on collecting various exorbitant fees, inevitably leading to product homogenization and mediocrity, thus losing their due value. The platform business model of KA stores has been proven to be narrowing, and suppliers who were led by the stores to invest recklessly in the name of brand image have died in droves over the years. And e-commerce terminals have become the latest "modern terminals," playing much more smoothly than the previous "modern terminals." First, using the Internet development dividend and free means, e-commerce platforms represented by Taobao quickly gained a large number of customers and built huge platforms. Then they collect "protection fees" much more fiercely than supermarkets: various activities, various pit fees, really a pit! What is even more awesome than traditional supermarkets is that if you do not pay promotion fees, you do not even have a chance to be exposed. First-tier brands still have a lot of say when facing traditional large supermarkets, but when it comes to large e-commerce platforms, they have to do whatever they say. After paying, as for how to do promotion and operations? Sorry, you have to do it yourself; I just collect tolls. As a result, most manufacturers who are not good at marketing to consumers are forced to do their own market promotion. The cost is high, the united front is broken, and manufacturers fight alone (in the traditional model, promotion functions are completed by intermediaries). So once the traffic dividend period passes, almost all e-commerce operators are losing money. But as the national father, Ma Yun is not just for show. He knows that if this continues, suppliers will be played to death, and he will have no place to pluck wool, and he might accidentally become a "pre-modern terminal." So in 2016, Alibaba threw out new retail: "The word e-commerce will soon be eliminated, and the pure e-commerce era will soon end." Then in 2017, new retail became the hottest marketing term: "online + offline + logistics," "people, goods, places," "new channels," "unmanned stores," "automatic pickup," various practices and explorations emerged. Some are confused, some are starting, some want to ride the wind, some try to control the interpretation of "new retail." The flowers are dazzling, but we have been educated since childhood to "find differences," to see changes, and often forget that what does not change is often the most essential. Let us return to classic marketing and see how old man Kotler interprets retail and terminals.
Retail includes all activities involved in selling goods or services directly to final consumers for their personal, non-commercial use. The old man was afraid people would go astray, so he specifically said the following. It does not matter how these goods or services are sold (in person, by mail, by phone, or by vending machine), or where they are sold (in a store, on the street, or in the consumer's home, now we need to add online). Old man Ke is always old man Ke. He saw and predicted that retail formats are diverse and varied, and new forms will continue to emerge. He also asserted that terminal types will go through stages of development and decline like products. Kotler called this the "retail life cycle" and used the "retail wheel hypothesis" to analyze the law of terminal type innovation. I will not go into details; those who love learning can look at the master's "Marketing Management" chapter on "Managing Retailing, Wholesaling, and Market Logistics." Let us return to the concept that Lao Miao has always advocated: the essence of marketing is to influence and change consumer behavior. The form and method of the terminal are far less important, and not as magical as legend has it. Wherever you can communicate deeply with customers, where there is a deeper consumption experience, where you can influence consumers to a greater extent, that is where the more valuable terminal is. Using four parameters—customer communication, product exposure, profit, and sales—Lao Miao divides terminals into five categories. They are deep terminals, high-value terminals, sales terminals, ordinary terminals, and trap terminals. Based on the characteristics of these five types of terminals and the characteristics of the products sold by the enterprise, combined with the resources the enterprise can invest, a combination of pre-terminal, post-terminal, core terminal, and wing terminals is formed. This is the "new terminal-driven model reconstruction" under the new terminal value concept advocated by Lao Miao. Author: Miao Qingxian, Chief Consultant of Shanghai Yihe Marketing Institution. Brand and marketing expert. Professional media person. Source: Lao Miao Tears Marketing (ID: yiheyingxiao) New Distribution will hold the 2019 (5th) FMCG + Internet Conference during the Chengdu Spring Sugar and Wine Fair from March 16 to March 18. This conference will focus on the topic "Breakthrough" and conduct in-depth discussions with many brand owners, supply chain service providers, distributors, retailers, etc. Compared with previous conferences, this summit will be fully upgraded. In addition to the original topics such as channel innovation, city distribution logistics, distributor transformation, it also adds new marketing cases, IP + FMCG empowerment, community group buying, innovative retail, etc., with multiple parallel forums. Through three days of ten high-density and high-quality expert sharing and exchanges, we believe every brand owner and distributor can learn the latest business models, expert opinions, and practical methods, find new tools and methods for their own breakthrough in 2019, and return to the track of rapid growth. Review of previous conferences -END-