---
title: "The Era of Consumer Refinement Replaces Channel Refinement Has Arrived"
description: "Views like 'terminal is king' and 'channel is king' have been popular in the business world for over a decade. The author, who once advocated such ideas, now argues that channel push is giving way to consumer marketing penetration, ushering in a new era where consumer refinement replaces channel refinement."
author: "李政权"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-12-28"
language: "en"
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# The Era of Consumer Refinement Replaces Channel Refinement Has Arrived

> Views like 'terminal is king' and 'channel is king' have been popular in the business world for over a decade. The author, who once advocated such ideas, now argues that channel push is giving way to consumer marketing penetration, ushering in a new era where consumer refinement replaces channel refinement.

"Terminal is king," "channel is king"... Views like these have been popular in the business world for over a decade. As the author, I was no exception. In the early years after 2001, I published many related views in publications such as *Sales and Marketing*. By 2004, Professor Niu Yongge from Sichuan University's Business School and others even wrote in their paper "Research on the Growth Path of Weak Brands": "Domestic scholars represented by Li Zhengquan have proposed the idea of 'channel is king, decisive at the terminal,'" directly attributing the coinage of "channel is king" to me.

To this day, many enterprises still regard these views as the golden rule. But in the past year or two, I have begun to sing a different tune, because the push of channels is increasingly giving way to the penetration of consumer marketing. To put it bluntly, the push of channels is becoming less important compared to the previous decade or so, and a new marketing era dominated by consumer marketing penetration is coming.

I say this because when the sky changes, the path changes too.

**When the Sky Changes, the Path Changes**

The so-called "sky change" means that the macro environment for corporate marketing has changed.

In the past, consumers had to watch TV or read newspapers to learn about a product. Now, the TV turn-on rate in some large and medium-sized cities has dropped to 30%, and traditional print media in city after city have suspended publication or closed. In the past, consumers had to go out, walk the streets, and visit stores to shop. Now, they can shop from home... The change in consumer behavior is the main driver of the major changes in the marketing environment. Influenced by the fact that consumers are the source and living water of all business and marketing, everything from terminals to distributors, marketing teams, and all corporate marketing and marketing management behaviors are being restructured under the new environment of internet-based consumption behavior, fragmented mobility, and decentralization.

That is to say, the "path" of marketing must and is changing accordingly.

In the past, when we talked about corporate marketing, we often mentioned two terms: "push"—by giving distributors, secondary wholesalers, and terminal merchants more gross profit and expense support, or by giving corresponding staff of these channel merchants more incentives, to encourage them to proactively promote products to downstream customers and consumers; and "pull"—through various brand promotions and consumer promotions, to pull the product's recognition, acceptance, and selection in the consumer market.

Now, the push of channels is being irreversibly weakened. Because "push" is more based on "information asymmetry"—for downstream customers and consumers, you push what I know and what I might choose. The increasingly evolving internet is making this phenomenon a thing of the past: in the vast sea of online data on PCs and mobile devices, we can find corresponding suppliers and merchants for any product we want. In other words, under the new internet environment of information symmetry, upstream manufacturers can reach terminal customers and consumers directly through online and offline marketing penetration, while downstream terminal customers and consumers can learn about more, better, and more cost-effective products through their own initiative.

Terminal merchants and consumers increasingly do not need upstream channel intermediaries, especially those distributors and wholesalers that act as relay stations. However, compared to the mature Taobao and JD.com, a distribution and delivery platform for terminal merchants, along with corresponding commercial supporting forces, is far from as mature as the consumer internet.

Following these changes, we also face challenges in adapting to trends in consumer marketing strategies, marketing organizational structures, channel construction, marketing team management, and market control.

**The Era of Consumer Refinement Has Arrived**

The above situation is gradually becoming reality. Amid this great change, enterprises with keen awareness and the ability to combine business ideas and strategies with new business technologies to implement consumer marketing will benefit first.

At the beginning of 2015, a large health enterprise in Jiangsu brought us a very specific need: they wanted to plan and design a mobile-based online consumer closed-loop marketing system—guiding their thousands of offline consumers to an online platform, and around these consumers' diverse needs, customizing development, targeted promotions, precise communication, and combining online and offline sales of corresponding multi-category products. The company's chairman once told Li Zhengquan about the reason for launching this project. In the Henan market, merely by combining secondary development of a WeChat official account and requiring agents to collect consumer data, and by leveraging consumer data, they achieved over 50% sales growth in just two to three months.

Although this growth relied on agents' cooperation in data collection, the 50% growth was not due to traditional channel push, but mainly benefited from consumer marketing based on consumer data.

Similar examples will become more common. Because when we know the city, street, or community where consumers live, their phone numbers or WeChat and other instant contact information, and their consumption preferences and frequency, we can achieve more "zero distance" between enterprises and consumers, involving them in co-creation and sharing in product development, packaging design, spokesperson selection, etc., making products co-developed by consumers, and turning passive marketing into a joint initiative of consumers and enterprises. In my upcoming book *From Trend to Action: Traditional Enterprises' Internetization in the Next Decade* (CITIC Press Group), I discuss many similar trends and actions.

This is a subversion of traditional marketing. Under this subversion, the "wasted 50% of advertising budget" will be minimized, and the penetration of targeted, precise consumer marketing will upgrade traditional enterprises' "regional cultivation" and "channel refinement" to consumer cultivation and consumer refinement. Moreover, the possibility of innovative cooperation models with new and old retail channels, the maturity of commercial supporting forces and models for home delivery or self-pickup, and the formation of an open online-offline commercial closed-loop ecosystem will make traditional channel intermediaries and channel push increasingly unimportant.

That is to say, marketing aimed at the source of business and marketing—consumers—is not only the trend and direction of our marketing progress, but also, all changes initiated from this will bring earth-shaking changes to traditional business order and channel ethics.

The ability of consumer marketing will determine our future prosperity and survival! Now, let us focus on consumers and the penetration of consumer marketing, innovatively adjust our models, cultivate our capabilities, and optimize our resource allocation!

This article is from WeChat public account Li Zhengquan (ID: lizhengquan03).

**-END-**

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