Distributors and manufacturers generally have cooperation agreements, making them a community of interests in a sense. However, the relationship between retail terminals and distributors is often one of free trade. Without a long-term stable relationship as a foundation, distributors may find themselves unable to control terminals and often at a disadvantage in competition. How can they turn passivity into initiative? The author summarizes ten key methods to bind retailers – ten types of support.
- Agreement Support: Distributors and manufacturers typically have agreements that, through cooperation and constraints, can initially form an organized, planned strategic alliance. In contrast, secondary wholesalers and retail terminals often operate independently, selling whatever sells well, whatever is profitable, and buying from whoever offers the lowest price, timely delivery, or good service. This leads to free-flowing channels and cross-procurement, laying the groundwork for disorderly competition and malicious cross-regional selling. The main solution is to use agreements to bring these scattered secondary wholesalers and retailers into the manufacturer's network management, giving them a sense of belonging and subjecting them to the support and constraints of agreements. Without major external temptations, they will follow the agreement to buy and sell the manufacturer's products.
For example, a company in Meizhou, Guangdong, found that non-designated secondary wholesalers were disrupting the market by dumping goods. They identified them and signed agreements with them, which effectively constrained their behavior. This method is called the "recruitment method." Another example is a company in Urumqi that developed a "Retail Honor Hundred Stores" through agreements, greatly enhancing market competitiveness and making many top retail stores exclusively sell their products, creating barriers for competing brands.
Meeting/Information Support: By regularly convening secondary wholesalers and retail stores in the region for order meetings, new product introductions, promotional policy briefings, and reward redemption meetings, communication and contact are strengthened. Through meetings and information support, their cooperation with terminal work is secured. Practice has proven this to be an effective method.
Emotional Support: "Do business by being a good person first." Customer relationships are the foundation of long-term business. Secondary wholesalers and retailers in a region can source from different channels. Although many manufacturers require closed sales, this is often a one-sided wish. To get retail terminals to buy from a single distributor long-term and stably, besides policy and price factors, distributors must build good customer relationships with secondary wholesalers and retailers. Only by improving service quality, enhancing communication and cooperation, and maintaining and strengthening relationships through various activities can they truly bind secondary wholesalers and retailers.
Price Support: Product prices are closely related to sales profits and directly affect the enthusiasm of secondary wholesalers and retailers. However, manufacturers have strict price controls, and arbitrary price changes can have severe negative impacts on the market. The correct price support method is: the normal price differentials at various levels should not be changed arbitrarily, but to enhance terminal competitiveness and boost the enthusiasm of secondary wholesalers and terminals, open rewards and hidden rebates should be given when necessary.
Open rewards serve as incentives for those who achieve certain sales volumes or meet advanced standards, making them happy and setting an example for others. Hidden rebates, as a form of price support, provide profit support to customers who need or deserve it, making them feel unique and satisfied. Proper use of this method helps form a core customer group, strengthen customer relationships, enhance market competitiveness, and increase sales.
- Personnel Support: The most direct support manufacturers can give to secondary wholesalers and retailers is personnel support. For example, to strengthen terminal confrontation advantages, companies form teams of order takers and promoters to support secondary wholesalers and retailers. Order takers are assigned to regions for terminal development and maintenance, visiting terminals door-to-door to help distributors and secondary wholesalers secure orders.
For instance, Uni-President and Master Kong were the first to adopt large-scale (over 50,000 nationwide) order takers to support wholesalers and engage in direct competition at the terminal level. This strategy succeeded, and within just three to four years, their tea and juice drinks surpassed giants like Coca-Cola and Wahaha to become the number one brand in China.
- Promotional Activity Support: Promotion is one of the four elements of marketing, and its importance is growing amid intensifying competition. However, many distributors and secondary wholesalers intercept promotional items and funds for their own short-term interests, preventing manufacturers' promotional policies from reaching terminals. As a result, terminals cannot create sales peaks through promotions, and conflicts may arise between retailers and wholesalers.
Supporting terminal promotional activities not only boosts product sales but also strengthens cooperation, customer relationships, and synergy between wholesalers and terminals. A successful product that wants to gain support from terminals and consumers must launch strong terminal promotional activities promptly after initial channel development and terminal construction to stimulate consumption.
Terminal Display Support: Point-of-sale advertising, publicity, and product displays are the "final kick" of sales work! Well-executed product displays can bring products to life, letting the products speak for themselves: "Look at me! Try me! Buy me! I can satisfy you!" Terminal display support is a crucial part of the manufacturer's support to terminals. Its main contents include display concept support, display fixtures (such as shelves and freezers), display rewards and policies, display technical support, and display maintenance support.
Advertising and Publicity Support: People call terminal confrontation the "ground forces" operation, while product advertising is the "air force bomber." Only by combining air strikes with ground troop follow-up can ideal results be achieved. Therefore, after initial terminal development shows results, when market coverage reaches over 60%, and terminal displays and promotions are in place, timely advertising and publicity support should be given to terminals. Besides arranging a reasonable advertising plan, the advertising and publicity plan and schedule should be communicated to terminals, so they can integrate the product's appeal with displays, POP, and staff introductions to strengthen communication effectiveness.
Franchise or Counter Support: To consolidate developed terminals and maintain key terminals, according to the 80/20 principle, special policies or methods are needed to consolidate and lock in key terminals that generate the majority of profits. Using franchise agreements or setting up dedicated counters can lock these core terminals as exclusive, which helps form the manufacturer's core competitiveness and build the base market, accumulate resources and brand influence, and further expand the market.
Profit Support and Buyout Operations: For some highly profitable terminals and "must-win" locations, instead of engaging in back-and-forth tug-of-war, it is better to concentrate resources for buyout operations. That is, give these special terminals profit support: if you exclusively sell my products and meet certain display, recommendation, and sales requirements, I guarantee your annual profit from tens of thousands to millions of yuan.
A distributor used an annual profit support fee of 5 million yuan to buy out all alcoholic beverages and soft drinks in 10 large hotels. All manufacturers' products wanting to enter these hotels must go through him, avoiding unnecessary losses in vicious competition. The result is easy business and steady profits.
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