Introduction: Grasp the macro trends, manage marketing actions aligned with those trends, and continuously accumulate marketing successes; quantitative changes lead to qualitative changes.
In the era of self-media, it's common to follow media buzzwords in marketing. This can be beneficial, such as quickly making influencers popular, hyping up a phenomenon, and attracting investment. It can also be harmful. Media buzzwords are often emotion-driven, creating bubbles that rise and fall quickly. Professionalism may be questioned or even ignored under the heat of media buzzwords. At year-end, selecting top ten phenomena in various industries and professional fields is also a hot phenomenon. The top ten phenomena are often media buzzwords. Looking back at the end of the year, many once-popular buzzwords have faded or been forgotten. If I were to pick the most overlooked marketing phenomena of 2023, I'd think of two terms: inventory clearance and difficulty in recruiting distributors (or launching new products). These two terms are interrelated.
Inventory Difficulty The contrast between Q1 and Q2 of 2023 is stark. In Q1, confidence was high, and companies were ready to make a big push. Investment and budgets were substantial, but the market cooled. When the National Bureau of Statistics released half-year retail sales figures in Q2, many marketers found them hard to believe. Our frontline experience was poor, yet the statistics looked decent. Many suspected data manipulation. The Bureau mentioned a 'temperature difference'. Conflict attracts attention. Many people just complain about the temperature difference, but I've actually pondered it. The 'temperature difference' is a conflict, and conflict is a structural contradiction.
Conflict 1: Manufacturer-Dealer Conflict and Inventory Clearance
The manifestation of manufacturer-dealer conflict: manufacturers want to push inventory, while dealers want to clear it. Over three years of the pandemic, channels indeed accumulated significant inventory. Initially, I thought only industries like baijiu, which have no shelf life, had large inventories, but later I found it was quite common. When the pandemic ended, manufacturers wanted to make a big push, inevitably pushing inventory and increasing stock. Dealers and terminals wanted to clear inventory, so they resisted pushing and even ran aggressive promotions at the terminal. A rush of promotions made consumers wait, not buy urgently, and hold out for even bigger discounts. Many attribute 2023's marketing problems to consumption downgrading, but channel stampede might also be a factor. So, how significant is the impact of inventory clearance? I recall a leading company in the industry saying that total channel inventory (manufacturer + operation centers + distributors + retailers) could last a year. Think of Moutai's inventory clearance in 2013-2014; it had a huge impact on Moutai. It wasn't until Moutai raised prices that the inventory turned from bad to good, and the problem was solved. Of course, most companies don't have such scary inventory. However, if all channels clear inventory simultaneously, the inventory won't be small. Inventory clearance doesn't affect retail, but it affects manufacturers' sales reports. I believe that once inventory is cleared, 2024 will be relatively easier. There are two ways to clear inventory: one is more aggressive promotions, which most companies adopt, but this has negative implications for the future because continuous heavy promotions create a dependency; the second is a method I've always advocated: move marketing actions one step or half a step forward. If you previously did B2B, now do b2b. If you previously did b2b, now push to C-end. The second method is more benign and sustainable. If we consider the inventory clearance issue of 2023, 2024's marketing work might be another unexpected year. After experiencing inventory clearance in 2023, pushing inventory in 2024 and beyond should be very difficult. Perhaps it's time to change the bad habit of pushing inventory.
Conflict 2: Channel Fragmentation vs. Main Channel
This is a hidden conflict, not obvious. I noticed it from the national statistics in the first half of 2023. The question is whether to question the National Bureau of Statistics data or doubt our own feelings? That's the conflict. Over three years of the pandemic, too many new retail models emerged, taking away retail share. So even if the national statistics show rising consumption totals, traditional channels' share is declining. The National Bureau of Statistics data is correct, and our feelings are also correct. The temperature difference comes from new retail. How to solve the channel fragmentation problem? It must be omnichannel operation; you have to hold both sesame seeds and watermelons.
Difficulty in Recruiting Distributors The difficulty in recruiting distributors was particularly evident at the 2023 Spring Sugar Fair. The fair was bustling, but transactions were minimal. Many exhibitors couldn't even recover their exhibition fees. Some distributors who had committed to cooperation in 2022 gave up in 2023. Large companies don't have recruitment problems, but they have new product launch problems, which are equally significant. I categorize both as the same problem because recruiting distributors is also launching new products (new brands). Why is it difficult to recruit distributors? There are immediate and long-term factors. The immediate factor is large inventory. Inventory issues must be resolved first. There are three major long-term factors:
First, distributors are pessimistic about the future and even preparing to exit. This is common among distributors born in the 1960s and 1970s, either due to age or lack of succession. Second, the traditional deep distribution model is ineffective for launching new products, and there is no better alternative yet. Third, influenced by hard discounts, the supply chain revolution requires retailers to directly connect with manufacturers.
Inventory clearance is negative in the short term but positive in the long term. Except for seasonal inventory pushing, people have come to accept it. The many benefits of pushing inventory that were touted in the past have become immune to channels. Difficulty in recruiting distributors and launching new products is a long-term channel issue. There is no short-term solution; only long-term adjustments to channel work. The work of launching new products is not in the B2B or b2b channels, but in the C-end. The various tasks of deep distribution cannot solve C-end problems. The biggest impact of the internet business revolution is not channel digitalization, but that user operations have become standard, including both online and offline user operations. In the past, when launching new products through channels, B-end and b-end acted as representatives for users (C-end). In the user operations model, only the C-end can represent itself; no one can represent the C-end. Jiang Xiaobai's Tao Shiquan said, bC integration is user (C-end) operations based on terminals (b-end). This is a profound insight. The purpose of this short article is simple. In the atmosphere of media hyping buzzwords, it's easy to abandon professional judgment. The group stupidity depicted in 'The Crowd' is vividly displayed on self-media. Grasp the macro trends, manage marketing actions aligned with those trends, and continuously accumulate marketing successes; quantitative changes lead to qualitative changes. Don't expect miracles, but eventually, miracles will happen.