By Liu Chunxiong 1 This is a classic question: what to do when the budget is limited. On October 25, during a live broadcast with teachers Shi Wei and Ding Ding, a group friend raised this question. Of course, this is also a tempting trap question that tests the wisdom of the answerer. Forgive me for not giving a direct answer. What the answer is doesn't matter; what matters is the logic behind forming the answer. The problem is the logic and value orientation of the answer. Clarify the problem, ask the right question, and the answer will naturally come. 2 Following Drucker-style thinking logic, one would definitely ask: What is the purpose of the budget? Only methods that achieve the purpose are good methods. For example, Zhuge Liang often assigned Zhao Yun the task of "only lose, not win," so losing "without a trace" was the purpose. From the information implied in the question, I can only guess that the goal is to achieve long-term objectives. Because communication networks and distribution channels are foundational work that yields results in the long run. Establishing a communication network results in brand driving; establishing distribution channels results in channel driving. With limited resources, dual-wheel drive is impossible. Which model to choose? First, look at which model has higher driving efficiency; second, look at which model you are good at. Our discussion does not consider the question of proficiency. Under the past theoretical system of deep distribution, channel driving took precedence over brand driving, with higher efficiency and lower thresholds. Prioritizing the establishment of distribution networks was once the first choice for resource-limited enterprises. Brand driving requires significant investment and long-term accumulation, while good deep distribution can yield immediate results, making channel driving more efficient. Of course, the dividend of deep distribution ended after 2013, and now we have entered the era of communication dividends. With limited budgets, seizing the era's dividend is important. Dividends have a leverage effect, where one success leads to all. Internet communication no longer requires a long start-up period and time accumulation like traditional media, and the capital threshold has also dropped significantly. If you can achieve "collective watching, instant breakthrough," prioritizing the establishment of a communication network is also feasible. Teacher Ding Ding's deep fan marketing is a communication-driven model under resource constraints. Through a process of building fans, attract a group of fans, then use fans as initiators of communication to form communication power. Of course, once communication ignites, establishing distribution channels in turn becomes relatively easy. Many grassroots entrepreneurs can ignite by using Teacher Ding Ding's principle: first do communication ignition, build an IP, and finally establish distribution channels. The premise is that communication must ignite. Both ways of thinking have their applicable environments and theoretical bases. However, under different marketing environments, the efficiency of the two driving modes differs, so of course, the more efficient mode should be prioritized. 3 Five years ago, deep distribution was the best Chinese marketing practice, with no resource threshold and wide applicability, especially suitable for small and medium-sized enterprises. However, times have changed, and now the threshold for deep distribution is high, while the threshold for internet communication has become lower, making it more applicable. The above thinking is either/or, because with limited resources, choosing brand communication means you cannot choose deep distribution. In marketing, there is another way of thinking: limited resources do not necessarily mean either/or. I will start with a brain teaser: There is a large pot of water, but not enough firewood to boil it. What to do? This is a typical budget constraint problem. If the thinking direction is "find more firewood," it clearly violates the premise of budget constraints; if you just boil as much as you can, you clearly don't know the implicit purpose (boiling the water). The correct answer is: pour out some water until the firewood can boil a small pot of water. The logic behind this answer is: Success must have a critical point. The budget is limited, and the critical point cannot be changed, so you must invest limited resources into a more concentrated market to ensure reaching the critical point in a smaller area. This is an important thinking logic. No matter where limited resources are invested, if they do not reach the critical point, it is a waste of resources. For a new brand to generate sales, three prerequisites are needed: First, the product must be available at the terminal, i.e., distribution, establishing distribution channels; second, consumers must be willing to choose it. For a new brand, consumers need to be reached through communication; third, the recommendation of the store owner (or sales guide). This work can also be classified as distribution channel building. For market ignition, these three prerequisites are necessary conditions for sales. Meeting these prerequisites requires budget, and limited budget is the norm. Therefore, there are only two choices: one is "pour out some water." A limited budget can also be seen as the market space for budget investment being too large; narrowing the market scope makes it not limited. You must give and take, and finally ensure ignition in a local market. If distribution channels can be precise when the budget is limited, then communication ignition must be saturated communication. Whether traditional media communication or current internet communication, if communication does not reach saturation, it is ineffective. Saturated communication is the critical point of cost. If the critical point cannot be reached, it is better to give up communication. The effect of communication is either ignition or a dud; either 0 or 1. For traditional advertising communication to achieve good results, the media should be: first, invest in CCTV, as long as the "loudspeaker shouts hard" and reaches the critical point, it is usually effective; second, county-level TV stations, because they can achieve closed communication. As long as closed communication is possible, the market can be segmented before investment. Internet communication can also be closed, achieving precise and closed communication in a small area. In 2017, we guided Xiaoshile to complete closed communication in 100 counties, reaching saturation in each county. Everyone must pay attention. In the past, distribution channels and communication networks were separate, one being the army and the other the air force. Now is the era of social sharing, where the army can also be the air force. That is, distribution channels and communication networks can be unified. Communication around precise stores can itself be considered part of new channel building. The combination of precise distribution and precise communication, achieving saturated communication on a precise basis, makes it easy to achieve sell-through. 4 Trout, the proposer of positioning theory, stated in his book "Marketing Warfare" that there are only two marketing strategies: one is the big-bang strategy; the other is the rolling tactic. The super-budget strategy of big brands is a typical big-bang strategy. As long as communication causes a sensation, establishing distribution channels becomes much simpler. Small enterprises with limited budgets can only implement a rolling strategy, that is, after igniting in a certain area, roll out to other markets. Mao Zedong's "a single spark can start a prairie fire" is a typical rolling strategy. In my view, there is only one marketing strategy, and that is the big-bang strategy. The rolling strategy is another manifestation of the big-bang strategy, that is, a local sensation or a precise sensation. This is Mao Zedong's strategy and tactics: concentrate forces to fight annihilation battles. Concentrating forces to fight annihilation battles inevitably results in "fighting war to support war." Winning the war and using captured weapons to fight again is fighting war to support war. With the mindset of "fighting war to support war," a limited budget becomes a false proposition. If you fight a war of attrition, then a limited budget is the norm. 5 A limited budget is closed-loop thinking. The problem you set yourself ends up stumping you. There is only limited thinking, not limited budgets. As long as the input-output ratio is high, resources can be infinitely amplified. As long as the marketing input-output ratio is the highest, and you can "fight war to support war" rather than fight a war of attrition, the budget can be infinitely amplified. The mindset of unlimited budget is open-loop thinking. Open-loop thinking has two manifestations: First, the budget must be invested in the market that can make the most money, or the market with the highest input-output ratio. A limited budget is often a helpless move in the following markets: one is when there is no increment and the market must be maintained, so budget is reluctantly invested; the other is when there is no ignition thinking, and costs are evenly distributed proportionally. Second, budget can be obtained from external sources. As long as you can make money, even if you are really short of money, someone will be willing to advance payment or invest on your behalf. For example, as long as distributors can make money, why not let distributors invest proactively? 6 A simple question, written so much, is it overcomplicating the problem? The complexity of the thinking process leads to the simplicity of the execution process. Good answers often do this. I did not give an answer, only the logic for reasoning out the answer. To sum up, there are two sets of logic. The first set of logic: single-point breakthrough logic. Whether you prioritize building a communication network or a distribution channel, you must first achieve a "single-point breakthrough," and through that breakthrough, drive other aspects to follow at low cost. Which direction to choose for the single-point breakthrough depends on two aspects: one is which aspect has dividends, preferably starting from elements with dividends; the other is which field you are good at, the better you are, the higher the input-output ratio. The second set of logic: critical point logic. Any investment that does not reach the critical point is ineffective. The critical point is constant, the budget is limited, and what can be changed is the market scope, not the critical point. In a local market, adopt a "big-bang strategy" to reach the critical point, then "fight war to support war" and roll out development. Both sets of logic are survival logic for the weak and also efficient logic. Once the logic is clear, the answer naturally comes. Source: Teacher Liu's Forum (ID: liuchunxiong1964) -END-