△Add friend and note "inspection" to register ◎ Text | Liu Chunxiong 1 In its early days, deep distribution was a low-threshold, universal marketing system because it started from the "smallest marketing unit" and did not require high resource investment. The absence of resource barriers does not mean there are no barriers. There are two main barriers: first, cognitive barriers. Those who deeply understand the concept, act first, and iterate continuously during the evolution are creating barriers for imitators; second, management barriers. Deep distribution ultimately manifests as a human-wave tactic, with large numbers of personnel densely deployed, making management an extremely high barrier. Because deep distribution has low barriers and lacks technical content, imitation is relatively easy. Therefore, deep distribution iterates quickly, almost every 2-3 years. Based on my observations, since 2003, deep distribution has undergone roughly six rounds of iteration, which I divide into seven stages, some of which overlap.
Stage 1: Customer relations + display
Stage 2: Incremental orientation + improving basic work surfaces
Stage 3: Promotion orientation
Stage 4: Direct supply to terminals + KPI
Stage 5: Inventory pressure + buyout
Stage 6: Visit-based sales
Stage 7: Channel digitalization (B2B) 2Stage 1: Customer relations + display I call 2003 the first year of deep distribution (varies by industry; I take the FMCG industry as an example). In 2000, the market focus shifted down to "county as the basic marketing unit," and the distributor pattern was formed. In 2002, the dividends from the downward shift of market focus were exhausted, and deep distribution was put on the agenda. Judging from articles compiled by "Sales and Market," articles on deep distribution began to appear densely in 2003. This marked the beginning of the first stage of deep distribution. The characteristics of the first stage of deep distribution were: customer relations + display. The manifestation was: the eight-step work method of deep distribution. In early deep distribution, because salespeople had just started visiting, store owners were enthusiastic, so distribution work was simple, mainly solving two problems: first, display space, as sales are proportional to display space; second, customer relations, i.e., the relationship with the store owner, which led to the owner's recommendations. There are many versions of the eight-step visit method. The early version was proposed by me, and the later version was enriched by Wei Qing. The early eight-step visit method included: preparation, greeting, inspection, sampling, inventory check, restocking, posting POP, and farewell. A tobacco company's "eight-step work method" was: greet customers, check samples, provide information, guide operations, understand needs, cultivate brands, collect information, and bid farewell. Wei Qing contributed significantly to the promotion of deep distribution. At that time, he coined the concept "from concept to practice" and published many articles on deep distribution under the pen name "Li Zhi Shi." The version of the eight-step method circulating on the internet now is from the mature period of deep distribution, with rich content and dramatic features. I will not elaborate here; those interested can search online for "standard eight steps for visiting small and medium terminals." Throughout the process of deep distribution, because visits are an indispensable part, the eight-step visit method has always accompanied deep distribution. However, in the early days, visits alone could solve all problems; now visits are just the beginning of problem-solving. 3Stage 2: Incremental orientation + basic work surfaces Around 2005, deep distribution that relied solely on visits to increase sales quickly passed, and it rapidly shifted to changing the basic work surfaces of marketing, with an incremental orientation. I call this "incremental orientation + improving basic work surfaces." This stage of deep distribution included the following aspects: Six growth points for sales:
Cleaning up the market through "battle products";
Consumer education;
Discovering niche markets;
Product enrichment and structural adjustment;
Establishing regional strategic markets;
Continuous downward shift of focus. Six sources of sales growth:
New product launches;
New market development;
Channel structure optimization;
Consumer education;
Promotional innovation;
Sales force strengthening. Two major breakthroughs for sales growth:
1. From emphasizing distribution to emphasizing "return orders," i.e., more than three replenishments for new products;
2. Emphasizing core sales days. By counting the core sales days of the year and seizing them, you capture 70% of annual sales. This stage of deep distribution was no longer limited to superficial work like "customer relations + display" but involved fundamental work that could bring "sustained sales growth." The gap in deep distribution began to widen from this stage. First, from superficial work to fundamental work; second, from single-point breakthroughs to line and surface linkages. This stage already had barriers, mainly the management of deep distribution. 4Stage 3: Promotion orientation Promotion-oriented deep distribution began around 2008. It should be said that at this stage, deep distribution was already mature in terms of operational systems, having unified epistemology, methodology, and methods. It was also at this time that Jin Huanmin and I published "Chinese-style Marketing" based on deep distribution practices. The 2008 U.S. financial crisis also caused a temporary diminishing effect of deep distribution. At this time, some excellent companies launched new versions of deep distribution. For example, Uni-President, in the process of promoting Lao Tan pickled cabbage noodles, proposed "building a promotion-oriented sales system." At that time, neither customer relations + display nor improvement of basic work surfaces could drive new product sales. Promotion-oriented deep distribution had four characteristics: First, from pleasing store owners (customer relations) to guiding consumers, in today's language, using the C-end to force the B-end, because everyone was doing customer relations, making it a hygiene factor;
Second, fully activating a store through "three precise strikes";
Third, deep distribution changed from individual-based to team-based units;
Fourth, combining routine visits with precise strikes, pushing the evolution of deep distribution in waves. Objectively speaking, promotion-oriented deep distribution has higher barriers, and small and medium enterprises lack the awareness and management capabilities. However, companies that truly implemented promotion orientation achieved excellent results. 5Stage 4: Direct supply + KPI Around 2010, deep distribution among industry leaders reached a fever pitch. Early on, it was a scramble for KA, leaving distributors with no profit; later, it was a scramble for first- and second-tier cities, and even third-tier cities, leaving dealers unable to keep up. As a result, distributors in central cities were marginalized, no longer facing terminals directly, transforming from agents to service providers, mainly responsible for capital and distribution functions. The main body of deep distribution shifted from distributors, or distributors + manufacturers, to direct supply by manufacturers. This was something only industry leaders could do. Since industry leaders supplied directly, and leading companies had numerous SKUs, many management levels, and high personnel turnover, the KPI system for deep distribution gradually improved. Although KPIs existed before, the complexity and systematization of KPIs came after 2010: visit rate, closing rate, visit cycle, strike rate, distribution rate (including numerical distribution rate and weighted distribution rate), penetration rate, share of secondary display, activation ratio... To manage these performance indicators, they also established CRC (Customer Relationship Cards), supervisor joint visits, SMS/WeChat management systems, terminal distribution systems, and sales management systems. All those who use KPIs to solve problems face a "cat-and-mouse game" dilemma: first, even if KPIs are true and well-executed, they do not necessarily lead to results. Technical KPI indicators are hard to translate into sales; second, the work required by KPIs is difficult to generate sustained increments. Generally, when KPIs become the main assessment tool, it means the model has lost its power. Eventually, KPIs evolved to include positioning, photo-taking, and other technical means, becoming a tool for games between superiors and subordinates. As deep distribution evolved into direct supply, the manufacturer's sales force expanded dramatically. In 2012, China reached the "Lewis turning point," with an overall decline in labor supply, and with the post-90s generation entering the workforce, direct supply faced enormous challenges. 6Stage 5: Inventory pressure + buyout Since the advent of deep distribution, there has been the practice of occupying warehouse space. But occupying warehouse space is different from inventory pressure. Early on, occupying warehouse space was to tie up terminal capital, but later it lost that function. If occupying warehouse space was still within the reasonable sales range of the terminal, inventory pressure is occupying warehouse space beyond normal sales capacity. The evolution from occupying warehouse space to inventory pressure occurred around 2010. But widespread inventory pressure began in 2014. In 2013, sales in most FMCG industries reached historical peaks, and sales hit a ceiling. However, due to the inertia of long-term growth, companies did not believe that declining sales were an industry problem but rather a marketing problem. In the face of declining sales, the instinctive reaction was "heavy promotion," manifested as inventory pressure. Another practice of big brands was buyouts, not just buying displays in KA, but buying displays and shelf space in circulation terminals. From customer relations to buyouts, deep distribution had evolved into "buying traffic at terminals," and at this point, deep distribution had deteriorated. The problem brought by inventory pressure was a regression of deep distribution. Because terminals have limited capacity to bear inventory pressure, the tiered promotional policies accompanying inventory pressure led to the resurgence of second-tier wholesalers, and deep distribution "returned to ten years ago overnight." Compared with the resurgence of second-tier wholesalers for big brands, most small enterprises abandoned deep distribution and returned to "provincial agents," focusing on making good products, which drove a rapid increase in the rate of new product introductions among small enterprises. In the past, "provincial agents" were large distributors; now "provincial agents" have grassroots distribution networks. 7Stage 6: Visit-based sales Early deep distribution was "caravan-style" distribution with goods, without planning. Some larger distributors had numerous SKUs, making this method inefficient. At that time, SaaS systems emerged, solving the problem of separating orders from delivery. SaaS systems have two major mindsets: one is a management mindset, serving a supervisory role, using the system for "clocking in"; the other is a visit-based sales mindset, using the system to manage terminals. The application of SaaS systems in deep distribution began around 2013, mainly among larger distributors. It was difficult to popularize among small and medium distributors. Jinmailang is a benchmark company for using visit-based sales systems to solve sales growth problems. However, the application of SaaS systems in deep distribution management faced considerable resistance, mainly because frontline staff lost freedom. Therefore, unless the boss is determined and personally supervises and inspects, it is easily vetoed by managers at all levels. 8Stage 7: Channel digitalization In 2015, B2B entered the channel, with Alibaba's Retail Link, JD's New Path, and many other B2B platforms rising. There are two types of B2B platforms: one is order-platform-oriented; the other is warehousing and distribution-platform-oriented. The early goal of B2B was to replace distributors, reduce circulation links, and hoped to become a centralized platform like B2C. Although B2B platforms significantly increased penetration within just two years, big brands remained vigilant and spurred the channel digitalization led by brand owners, referred to as B-chain. Channel digitalization is a revolutionary tool for deep distribution, playing an important role in "precise service," "precise strikes," and improving personnel efficiency. It is believed that in the next few years, channel digitalization will be widely applied. 9The Iteration Logic of Deep Distribution The first stage of deep distribution was purely a cognitive dividend. Low barriers, high returns. Starting from the "smallest business unit," it formed points, lines, surfaces, and bodies, driving the rise of enterprises. If there were barriers, they were mainly cognitive. From the second stage, the basic skills of deep distribution were tested. Basic work surfaces seem ordinary but actually contain basic skills. They test both layout ability and management ability. Therefore, many enterprises began to fall behind in the second stage. To this day, many enterprises are still limited to the eight-step visit method without progress. The third stage, promotion orientation, contains deep technical content. Very few companies in China can achieve promotion orientation. From the fourth stage, deep distribution entered a stage of competing for resources and investment, evolving into a model that only industry leaders can do. The innovation dividend completely disappeared. The fifth stage, direct supply, had completely lost the original intent of deep distribution and became a means of cleaning up the market. From the sixth stage, deep distribution entered the stage of Internet "empowerment." In the future, deep distribution characterized by B-chain will become the basic skill of enterprises, and B-chain will become infrastructure. A new model to replace deep distribution is about to emerge. Source: Teacher Liu's Forum The 10th B-end E-commerce Inspection -- "From Product to Scene" Event time: December 10-13 Event location: Wuhu, Nanjing, Changsha Event schedule: Morning of December 10: Visit Three Squirrels headquarters + snack store
Afternoon of December 10: Visit Nanjing Squirrel Small Store
Evening of December 10: Visit Nanjing Master Gao Beer Workshop
All day December 11: Nanjing to Changsha, or free arrangement
Morning of December 12: Community group buying exchange salon
Afternoon of December 12: Kaola Select Heroes League launch event
Evening of December 12 to early morning of December 13: On-site inspection of Kaola Select logistics center -- This time period is the peak sorting period in the warehouse, allowing direct observation and learning of the backend operation process of community group buying e-commerce Welcome interested distributor friends to join us for understanding and on-site inspection : Organization format 1. Big-name exchange salon************2. Company visit
. On-site explanation 4. One-on-one communication************5. Actual market case visit Friends who want to participate If you are interested in a specific day's content, you can register separately Long press this QR code or click "Read Original" to register in one click! Add friend and note the purpose -END-