---
title: "How Should Distributors Formulate Their Strategy and Planning in 2016?"
description: "For distributors, formulating their own strategy and planning essentially means understanding a fundamental principle: what is their future mission or task? That is, what is their future value proposition, and what goals do they aim to achieve in the coming period? In short, strategy is about doing the right things; with the right direction, distributors can then develop their tactics and plans accordingly."
author: "崔自三"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-01-10"
language: "en"
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# How Should Distributors Formulate Their Strategy and Planning in 2016?

> For distributors, formulating their own strategy and planning essentially means understanding a fundamental principle: what is their future mission or task? That is, what is their future value proposition, and what goals do they aim to achieve in the coming period? In short, strategy is about doing the right things; with the right direction, distributors can then develop their tactics and plans accordingly.

For distributors, formulating their own strategy and planning essentially means understanding a fundamental principle: what is their future mission or task? That is, what is their future value proposition, and what goals do they aim to achieve in the coming period? In short, strategy is about doing the right things; with the right direction, distributors can then develop their tactics and plans, as well as a series of combination strategies based on those plans.

However, the reality is that many distributors, even those that have been corporatized, lack their own strategic thinking, or their strategies are incomplete or imperfect. Even if some distributor companies clearly know what they want to do, due to various reasons, it is difficult to translate concepts into actions and achieve their goals step by step. Moreover, the vast majority of distributors do not have their own strategies, at least in the current stage. This is reflected in the fact that they often do not know their future development direction, do not know their channel and market positioning, do not know how to combine products, and do not know how to systematically operate the market. They still follow the original extensive "sitting merchant" model, or sales approach rather than marketing approach, causing them to gradually lose their market competitive advantage. Therefore, distributors urgently need to conduct strategic planning to look to the future and better compete in the market in an integrated manner.

Distributors are an extension of the marketing department of manufacturing enterprises. To keep pace with enterprises and seek greater development, distributors should also formulate their own strategies, just like manufacturers, and further implement them through specific and practical plans, thereby moving towards standardized, institutionalized marketing-oriented and management-oriented marketing companies. So how do distributors formulate their strategies?

Distributor strategy and planning formulation can be divided into four steps:

First, distributor's own business positioning and business mission statement. This step is to make distributors understand their own positioning, that is, to know what they want to do in the future, what they can do, and to what extent. It specifically refers to the business nature, business scope, and service objects of distributors within a certain period. For example, Jinliufu Liquor (later integrated into Huaze Group) is actually the largest liquor distributor in China. Its business nature is a professional liquor distribution company closely connected with upstream channels. Its business scope includes four major business segments: "Jinliufu Liquor Industry", "High-end Baijiu", "Local Brands", and "Colored Liquor". Its service objects include not only downstream channels at all levels as strategic partners, but also customers at all levels who love baijiu. The business positioning or mission of distributors should have the following characteristics: 1. Feasibility. That is, it can be achieved through efforts. For example, Jinliufu Liquor Industry's ambition to become "China's No.1 Liquor Seller" is quite feasible and has already been achieved. 2. Reflect market orientation. For example, with customer needs as the core and customer satisfaction as the orientation, reflecting the market-oriented value of distributors. 3. Be inspiring. For example, Jinliufu's business mission is "Let the whole nation drink Jinliufu liquor, and ultimately Jinliufu liquor will become part of Chinese folk customs", which is quite inspiring. This is an almost arrogant vision, but it has become Jinliufu's corporate culture and the goal that all employees strive for. 4. Be specific and clear. The business positioning and mission should be specific and clear. For example, taking Jinliufu as an example, its positioning as "China's No.1 Liquor Seller" is very specific and clear.

Second, conduct SWOT analysis. The so-called SWOT analysis method is also called situation analysis. The four English letters SWOT represent: Strength, Weakness, Opportunity, and Threat. Distributors use this analysis method, including two aspects: 1. External environment analysis. That is, distributors should be able to discover marketing opportunities and clearly see the threats and challenges they face through external environment analysis. For example, distributors should be able to clearly understand and analyze the following external situations: first, the overall national macroeconomic policies, especially industry policies; second, the GDP development situation of the distributor's location and the trend of local government investment policies; third, the local market size: market size, segmentation, and composition; market characteristics: main downstream channel composition, main sales products, consumer preferences and trends, etc. 2. Internal environment analysis. This mainly refers to the analysis of the distributor's own resources and conditions. Including: marketing 4P analysis, such as product strategy: product positioning, product mix; price strategy: skimming pricing, penetration pricing; channel strategy: target channels, channel breadth, width, length design; promotion strategy: promotion planning, 5W2H design of promotion, etc. Customer strategy: whether customers need to be re-segmented and repositioned, and how to improve customer satisfaction? Organizational strategy: based on the distributor's own business mission and business positioning, review its organizational structure, especially whether the marketing organization can support the company to complete the strategic mission and tasks, and whether it is necessary to reset or optimize talent allocation according to strategic tasks. Through objective evaluation and analysis of its own resources, competitive capabilities, and operational capabilities, it can identify its advantages and disadvantages relative to competitors, laying the foundation for the next step of formulating specific strategies. For example, in the early days of Jinliufu Liquor Industry, its leader Wu Xiangdong, through market analysis, recognized that although the baijiu market was extremely competitive, especially in high-end and low-end liquor, there was a lack of leading and mainstream brands among the second-tier brands between high and low grades. Therefore, he formulated the brand and product strategy positioning for Jinliufu Liquor Industry and proposed the concept of baijiu grading, pioneering in the baijiu field.

Third, determine strategic goals: After analyzing the external environment and its own environment, and determining its own business tasks and business positioning, distributors should formulate specific strategic goals. For distributors, corporate strategy mainly includes: 1. Business strategic goals, that is, which business modules are involved, and what are their strategic goals? Together, they constitute the corporate strategic goals. For example, for a liquor distributor, in addition to baijiu, there may also be beer, beverages, etc., and even cross-industry catering and hotel industries; 2. Functional strategic goals, such as marketing strategic goals. This is also the top priority in formulating distributor corporate strategic goals. Here, we mainly discuss the formulation of marketing strategic goals. The determination of distributor marketing goals, from a broad perspective, should include two directions: one is quantitative goals. For example: sales goals, profit goals, etc. A distributor's 2008 sales target of 200 million yuan and profit of 30 million yuan is a quantitative goal. The other is qualitative goals. For example, downstream channel and customer satisfaction should reach above 90%, coverage rate should reach 95%, etc., all belong to qualitative goals. An effective strategic goal should follow the SMART principle, that is, Specific: the more specific the marketing strategic goal, the better; Measurable: the formulated marketing strategic goal should be measurable and calculable; Attainable: the formulated marketing strategic goal should be realistic; Reasonable: the formulation of marketing strategic goals must be reasonable and sensible; Time: the formulated marketing strategic goal should have a specific time for achievement, that is, a deadline. Only when distributors determine their strategic goals, especially realistic marketing strategic goals, can their business goals be achieved, can they better accomplish their corporate tasks, and continuously move to new levels.

Fourth, formulate distributor strategy. After determining the basic corporate strategy, especially the marketing strategy, the next step is to formulate specific strategies. Distributor strategy formulation includes the formulation of overall strategy and marketing strategy. Strategic goals explain where distributors want to develop, while distributor strategy explains how distributors should achieve their goals. A carefully crafted and comprehensive strategy is the key to distributors' sustained success in future competition. Distributor strategy formulation should solve the following problems: How to complete their strategic goals? How to defeat competitors? How to obtain sustained competitive advantage? How to strengthen the long-term market position of distributors as midstream channel players? Only by formulating realistic strategies can distributors be steady, not rash, not conservative, keep pace with the times, and continuously achieve greater development.

In summary, strategy is the direction, and tactics are the actions. Formulating strategy is to let distributors and their employees do the right things. It is to let enterprises and employees know what to do and what not to do, know how to give up, thereby gaining market competitive advantage, correctly understanding themselves, not losing themselves, and under the guidance and control of correct corporate strategy, continuously gain momentum for progress, become excellent and first-class distributors in the industry, and contribute to China's market transformation.

**-END-**

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