Introduction The final kick is important, but would China's football team win by fielding ten strikers? Terminals are where products are sold, often referred to as the "final kick," and are extremely important. Given their importance, companies naturally place great emphasis on them, resulting in a massive allocation of resources to terminals, dubbed "terminal is king." Many companies have adopted passionate or even fierce slogans like "terminal wins," "decide victory at the terminal," or even "fight to the death at the terminal." The general logic is: since the final kick is most important, let's all shoot. Midfielders, defenders, goalkeepers, production, supply, R&D, finance—just make do with whatever we have. Strikers are key; what matters is scoring goals. Nowadays, companies generally place great importance on terminal construction: special displays, terminal visualization, DM, various activities—they do everything possible. There is a famous "eight-step terminal visit" in the industry, and many companies wish to make it ten or twenty steps, believing that the more "detailed" the work, the more controllable the process, and the more "solid" the terminal work. In fact, the long-advocated "terminal is king" may be the biggest pit in corporate marketing over the past decade or so. First, the role of terminals is explicit; effects are immediately visible with investment. Many people do marketing by intuition, greatly exaggerating the role of terminal work. More critically, a company's operations and marketing are a holistic system. Resource allocation must balance all links. Overemphasizing terminals often leads to misallocation. Once resource allocation is wrong, the harder you try, the more you fail. Professor Zeng Xiangwen once gave an example: A company had poor overall sales, but some individual terminals sold well. The boss found that the promoter at that point was capable, diligent, familiar with the product, and amiable, so he concluded that performance depends on personnel quality, and thus trained and replaced people... Does this scenario seem familiar? The results are almost invariably: Competitors offer higher wages, and all the staff you painstakingly trained and hired jump ship. The key is you can't follow suit because competitors are profitable while you are not. Your system is poor, so your overall performance is poor. You changed promotional power, but the same promotional power can generate greater value in a better system, so they leave, and your local efforts only serve others. Here's another common phenomenon. A company launched a new product for several months with little market movement, but some terminals sold well. The company found that those terminals had good displays, prominent images, store push, and proper maintenance. So they concluded: display is the life of sales, terminal construction is the key to marketing success, and thus replicated it nationwide... The results are similar: you invest heavily in terminal expenses, but sales increase limitedly, and profits decline further. Truly good-performing terminals are few, and even if they exist, they often decline quickly and cannot be sustained. Worse, it's easier to go up than down. Once you invest, it's hard to withdraw, and high personnel maintenance costs become an unshakable burden. The logic is similar: your system is poor, so your overall market is poor. Individual terminals, due to chance or misjudgment, allocate resources to you, but this cannot be replicated. Terminals will allocate resources to systems that generate more value. Unless you maintain high fees, pay platform fees, or bribe terminals, which causes severe losses, and when bribes decrease, sales collapse. Old Miao gave an example before. In the past, Master Kong could beat Uni-President by relying on its channel refinement, and Coca-Cola's biggest weapon against Pepsi was direct terminal control. Some big brand operators have tasted success in terminal operations. So many emerging and second- and third-tier brands also imitated, from Master Kong's channel refinement to Coca-Cola's 101 model. Countless senior marketing managers parachuted into private enterprises waved the banner of terminal construction, but almost all failed without exception. Marketing deficiencies cannot be compensated by strengthening sales. The biggest deficiency of second-tier brands is weak communication with consumers. A brand that hasn't entered consumers' hearts, simply placed before them, incurs very high channel and terminal costs. More severe and common is that due to communication problems with consumers, the better the terminal work, the higher the exposure, the lower consumer acceptance, and the faster the product dies. This is the root cause of the saying "without terminals, wait to die; with terminals, seek death." Let's calculate an account that chills third- and fourth-tier brands. For the same special display, P&G only needs a special price to get it free, while Slek may need to pay 1000 yuan per slot, and some third-tier brands may need 2000 per slot, plus the price difference for the special offer. Sadly, P&G might increase sales by 10,000 yuan, Slek by 5,000, while third-tier brands might increase by only 2,000 or even less. Seemingly the same battlefield, different brands are not competing on the same platform at all; this is very unfair. The so-called "terminal is king" often means big companies lure you to an open field called "terminal," then use a weapon called "brand" to mow you down, who are unarmed (without brand), and you have no power to fight back. The so-called "terminal is king" is just a local feature of the "channel is king" era. The first decade of this century was the glorious era of "modern terminals" represented by supermarkets. Terminal resources were scarce; whoever was closer to consumers had more say, and traditional consumer goods companies mostly went through distributors to terminals, basically not contacting consumers. Greater market power and scarce resources made terminals very strong against most suppliers, with big stores bullying customers. Moreover, retail procurement staff were often strictly trained, easily manipulating the mostly low-professional sales personnel of domestic companies, squeezing suppliers, including manufacturers and distributors, to the maximum. Life was too good, so they got carried away. Many terminals transformed from sellers to platform operators, changing their profit model from earning sales profits to collecting "protection fees" (various entry fees, barcode fees, anniversary fees, delivery fees, etc.). Whose brand can afford more platform fees, and whose brand can reach more people in a fixed trade area, can be sold in these expensive terminals. Some niche and personalized products are shut out. This made products sold at major terminals increasingly similar, and consumers gradually lost interest in browsing stores. Perhaps some large retailers are proud of this business model, but transforming from seller to platform operator is a degradation. Sellers aim to provide customers with more convenience, better experience, and greater value, while platform operators focus on collecting various exorbitant fees, inevitably leading to product homogenization and mediocrity, thus losing their value. The platform operation model of KA stores has proven to be narrowing, and suppliers who were led by the stores to invest recklessly for the sake of brand image have died in droves over the years. And e-commerce terminals have become the latest "modern terminals," playing the game much more smoothly than the previous "modern terminals." First, using the internet development dividend and free means, e-commerce platforms represented by Taobao quickly gained massive traffic and built huge platforms. Then they collect "protection fees" even more ruthlessly than supermarkets: various activities, various slot fees—truly pits! What's even more impressive than traditional supermarkets is that if you don't pay promotion fees, you don't even get exposure opportunities. First-tier brands still have significant say when facing traditional large supermarkets, but at big e-commerce platforms, they have to follow whatever posture is demanded. After paying, as for how to do promotion and operations? Sorry, you have to do it yourself; I'm just collecting tolls. Thus, most manufacturers who are not good at marketing directly to consumers are forced to do their own market promotion. Costs are high, the united front is broken, and manufacturers fight alone (in the traditional model, promotion functions were done by intermediaries). So once the traffic dividend period ends, almost all e-commerce operators are losing money. But Ma Yun, as the national father, is not just for show. He knows that if they keep playing like this, they'll kill suppliers and have nowhere to shear wool, and might accidentally become a "former modern terminal." So in 2016, Alibaba proposed New Retail: "The term e-commerce will soon be eliminated, and the pure e-commerce era will soon end." In 2017, New Retail became the hottest marketing term: "online + offline + logistics," "people, goods, scenes," "new channels," "unmanned stores," "automatic pickup"—various practices and explorations emerged. Some are confused, some are starting, some want to ride the trend, some try to control the interpretation of "New Retail." Amid the dazzling changes, we are taught from childhood to "find differences" and look at changes, often forgetting that what remains unchanged is often the most essential. Let's return to classic marketing and see how old man Kotler interprets retail and terminals.
Retail includes all activities involved in selling goods or services directly to final consumers for their personal, non-commercial use. Fearing people might go astray, the old man specifically said the following. Whether these goods or services are sold (in person, by mail, by phone, or by vending machine), or where they are sold (in a store, on the street, or in the consumer's home, now we need to add online) is irrelevant. Old man Ke is always old man Ke; he saw and predicted that retail formats are diverse and varied, and new forms will continue to emerge. He also asserted that terminal types, like products, go through stages of development and decline. Kotler called this the "retail life cycle" and used the "retail wheel hypothesis" to analyze the pattern of terminal type innovation. I won't elaborate; those who love learning can check "Managing Retail, Wholesale, and Market Logistics" in his "Marketing Management." Let's return to the concept Old Miao has always advocated: the essence of marketing is to influence and change consumer behavior. The form and method of terminals are far less important, and not as mystical as rumored. Wherever you can communicate deeply with customers, where there is deeper consumption experience, where you can influence consumers to a greater extent, that is the more valuable terminal. Using four parameters—customer communication, product exposure, profit, and sales volume—Old Miao divides terminals into five categories. They are deep terminals, high-value terminals, sales terminals, ordinary terminals, and trap terminals. Based on the characteristics of these five terminal types and the products a company sells, combined with the resources the company can invest, a combination of pre-terminal, post-terminal, core terminal, and wing terminals is formed. This is the "new terminal driving model reconstruction" under the new terminal value concept advocated by Old Miao. Source: Old Miao Tears Marketing (ID: yiheyingxiao) -END-