First, a reading comprehension question: What is the profound meaning of Kotler's statement that "utilizing intermediaries is a major source of economic efficiency"? A. The old man is outdated; in the internet age, channels should be flattened, and "no intermediaries to earn the difference" is the way to go. B. Distributors are squeezed from both ends, too miserable; Mr. Kotler is giving them a pep talk (or got it wrong), exaggerating their importance; in reality, intermediaries are not that valuable. C. Producers need to make good use of intermediaries to make money; this is the main source of efficiency for producers (possibly the only one). D. Intermediaries are a major driving force for creating social and economic efficiency, and a main source of social wealth. Moreover, commercial change often starts with intermediaries.

A and B are clearly wrong, but they fit human intuition too well and have a solid cognitive foundation. Under the influence of "platform thinking" and "traffic thinking" in recent years, the poison of "de-intermediation" and "no intermediaries to earn the difference" has not been fully removed, and it can still fool some novices and those lacking business common sense.

Most production enterprise owners have a strong feeling about C. "To do business in China, you must do well in channels" is a common business insight. Fully mobilize the power of intermediaries, let them make money, and both sides can live well. If your understanding of intermediaries only stays at C, then your understanding of the supply chain is not deep enough, and you will still be at a loss during commercial changes, especially channel changes: you know you should let channel partners make money, but you don't know how to let them make money. You can't just give them all the profits without bottom line and be a living Lei Feng, right? You also know you should maintain good relations with channel partners, but how? Drinking, singing, and drawing big pies don't seem to work anymore. Everyone knows that sell-through is the best customer relationship, but how to achieve sell-through? You're back to square one, still confused. So C is correct but not profound. The only correct answer is D.

Intermediaries are a major driving force for creating social wealth (one of them), and commercial change often starts with intermediaries.

To understand this conclusion, we must first introduce a common sense from economics: wealth comes from division of labor, that is, specialized division of labor is a main means to improve production efficiency and productivity, and a main source of social wealth increase. This is not to be explained; it is the greatest discovery of Adam Smith, the father of modern economics, and one of the most important pillars of modern economics. It can be said that the current social economy develops through continuous division of labor and re-division, developing to the point where our social wealth is immense and still rapidly increasing, where we create in one year what used to take a hundred or even a thousand years, where we have escaped the cycle of dynastic changes, and most people can "eat meat with chopsticks and curse after putting them down." Our social division of labor will become more refined and more specialized. Each refinement of social division of labor brings a great development of productivity and a significant increase in social wealth.

Division of labor implies exchange, and refinement of division of labor implies more exchange. At this point, some may understand: exchange is commerce, is trade. The more society develops, the more frequent and higher quality trade becomes, not less. As professional traders, intermediaries' functions can only strengthen, not weaken. So, those who shout "no intermediaries to earn the difference" are, if we are generous, still stuck in an agrarian society; they are essentially "eating raw meat and drinking blood" and "slash-and-burn farming." The more society progresses, the more refined the division of labor; the more refined the division of labor, the more exchange; the more exchange, the higher people's dependence on exchange. The function of intermediaries will continue to strengthen, not be eliminated. This is very easy to understand. A slightly more difficult but more instructive conclusion for business is: Division of labor promotes exchange, and exchange in turn promotes division of labor. Commercial change comes more from changes in exchange methods. Changes in exchange methods can promote technological innovation, product innovation, and even production changes and changes in service methods.

Now, here's the hard part. The most classic and, at the time, most outrageous assertion of communication master McLuhan is: Media determines information. This overturned the traditional impression that "media is the carrier of information, and content determines form." Mr. Schultz's integrated marketing communications can be summed up in one sentence: "Marketing equals communication," that is, understanding and applying various marketing elements from a communication perspective. This includes the 4Ps (product, price, place, promotion) and STP (segmentation, targeting, positioning), operating products and brands with the concepts and methods of information and media. Putting the two classics together, we can easily deduce: Channels determine products (including brands, promotion models, etc.), not products determine channels. Changes in channel structure lead changes in products, promotion, and even technology. China's marketing has gone through advertising-driven, distributor-driven, terminal-driven, online platform-driven, and now 3K joint-driven. It seems that different eras correspond to different marketing trends, but the underlying factor is channel change.

In the 1990s and the early 2000s, it was called the "advertising is king" era. Niu Gensheng said advertising is the most important factor affecting performance. When Shi Yuzhu did health products, he treated advertising creation and placement as the company's most important strategic matter. It seemed that advertising had the greatest effect, but the underlying logic was that market demand expanded rapidly in the short term, and rough channels were eagerly seeking more products; as long as there was something to sell, there was profit. So whoever advertised more, channel merchants would flock to them. On the surface, it was "advertising is king," but in essence, channels were growing wildly. After the advertising-is-king era, there were a few years called "channels are king." Enterprises paid more attention to distribution and product flow, leading to channel refinement and distribution alliances. "From sitting merchants to traveling merchants" was the market theme of those years, and "deep distribution" remains one of the most important basic market tasks. The essence of "channels are king" is still a change in channel structure: saying goodbye to rough expansion and entering refined channel management. After "channels are king" came "terminals are king." It became increasingly difficult to get consumers to pay, and advertising effects worsened. Both manufacturers and distributors began to focus on the place where they could directly meet consumers—the terminal. The essence is still that the focus of channel operations moves closer to consumers, a change in channel structure. The development of e-commerce over the years, at first glance, is "traffic-driven" or "platform-driven," but in essence, it created another channel model. In the early era of grabbing territory, it was naturally "those who get traffic get the world," which is essentially the same as "those who get advertising get the world" in the 1990s. Internet platforms, under the banner of "channel flattening" and "de-intermediation," actually did not reduce many intermediaries. They eroded a lot of offline business, but at the same time gave birth to millions of online sellers, creating more online intermediaries. The current 3K drive, namely KOL (Key Opinion Leader), KOC (Key Consumer), and KOS (Key Seller), is essentially the application of Mr. Schultz's IMC in the internet environment after bidding farewell to rough platform growth. The boundary condition for its establishment is: due to the intervention of key figures (3K), internet communication tools, internet channel forms, and traditional communication tools and forms have merged, forming new channel operation forms. Marketing expert Liu Chunxiong calls this "BC integration."

Media determines information, channels determine products. In the advertising-is-king era, whoever made an impression was a good product. Mr. Ye Maozhong's unique secret "three ones" used creativity to make you remember the product at the lowest cost and form a brand impression; that was the most effective methodology. In the channel-driven era, deep distribution required big single products and door-openers; if you could make a category-representative product, you were the best. So the positioning school's "far ahead" and "XX leader" always worked. In the terminal-driven era, products with better terminal presentation and experience were the best. Hua & Hua Company's super symbols provided stronger terminal experience for products, thus creating many brands. Similarly, online platforms gave huge development opportunities to long-tail and ultra-niche products. The existence of e-commerce platforms greatly promoted product innovation. Many products and services we never dreamed of before often thrived on e-commerce first. Hence, "Taobao is omnipotent"—if you can think of it, it can be made. This is also a typical example of channels determining and leading products. In the 3K-driven era, higher requirements are placed on products and even corporate values. You need to have topics that resonate with users, not only making people buy your products but also willing to spread them and become your fans. I won't give more examples of "channels determine promotion" and "channels determine branding methods." The teacher taught us to grasp the "main contradiction." Once the main contradiction is solved, all problems are solved. Most of our enterprises have long focused on promotion and recruitment, and a few on making "good products," but they often know little about the most influential factors and pay insufficient attention. In marketing and enterprise operations, the single most influential external factor is media. Market trends are guided and driven by media changes. Most market opportunities and traps arise from media changes. Here, media includes both communication media and the media through which products reach users, that is, the intermediaries that are always said to be eliminated but never are. They always appear in various forms, one batch falls, and more batches stand up. So we see that major commercial changes always start with intermediaries, and opportunities always arise in channels.

It remains to be seen whether we can truly grasp the laws behind this and have such insight.

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