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As the baijiu industry undergoes further adjustment, the economic environment changes, and channel flattening intensifies. Many enterprises are facing transformation or even extinction.
The original profit zones have shifted; previously booming businesses have seen significant declines and shrinkage, with market sales that once reached hundreds of millions or more dropping sharply.
At the same time, they face market sniping from competitors, with a flood of homogeneous products increasingly filling the market; facing massive market investments and substantial fixed asset investments, yet the market shows no improvement, and resources are wasted.
Today, market problems and operational difficulties are before us. How should enterprises proceed? How should traditional distributors cope with endless price wars and cost control, and how can they smoothly navigate one difficulty after another in an industry still so restless?
Many enterprises have unanimously fixed their gaze on a lifeline: profit models. Models like B2C and O2O have thus emerged, creating a buzz. The 2014 Spring Sugar Fair was no exception. However, the author believes that although the liquor industry is talking about O2O and new models, the liquor O2O model is still in the slogan-shouting stage. Having internet thinking is a good start, and doing liquor O2O is quite trendy, but behind the hype, what exactly is liquor O2O? Can it truly become the lifeline for liquor enterprises to break through? In the end, it may be more about watching the excitement than actual implementation.
Profit models are understood differently by different people and enterprises. In fact, profit models are neither as mysterious as some describe nor as simple as some experts casually suggest. To put it plainly, a profit model is the channel through which a company makes money—that is, through what model and channel the company earns profits. But for distributors to win long-term and stable cooperation from customers, they need more than an effective profit model; this profit model is a systematic solution.
Current market competition is fierce, and the competitive pressure on customers faced by various distributors will become more prominent. Therefore, once customers encounter market bottlenecks, they must be helped and resolved in a timely manner.
It can be said that this is providing additional value reference beyond mutual interests. Distributors can explore customer needs from multiple aspects, understand the deep-seated needs and comprehensive requirements of customer product purchases, and through the launch of comprehensive customer solutions, enterprises can not only smoothly promote product sales but also obtain premium income through the provision of solutions, thereby consolidating customer relationships and binding customers. In other words, enterprise profits come not only from product sales but also from technical support, financing, multi-faceted value satisfaction, and long-term customer service. For example, providing strategic internet solutions, helping customers obtain the latest information and solutions from emerging e-commerce, self-media marketing, mobile terminals, etc., to help customers grow in operational thinking and innovation; in addition, comprehensive customer solutions are also an effective way to lead competitors and form differentiation.
Case Study 1: A U.S. Hospital Company Case
There is a very large pharmaceutical distributor in the United States. When the net profit of the entire pharmaceutical industry was 1%, this enterprise managed to achieve double-digit growth in both profit and sales over five years under the same background, with annual sales reaching $25 billion.
In fact, it was this enterprise that realized that customer value had shifted from a single product or service to overall solutions, thereby enhancing its core capability to satisfy customer value through comprehensive solutions. The approach of this enterprise was simple. In serving its customers (U.S. hospitals), it discovered three common problems:
First, hospitals could not control costs; the biggest cost was expired drugs in the pharmacy.
Second, there was a lack of sufficient pharmacists and nurses, resulting in poor service efficiency.
Third, doctors' handwriting was very illegible, leading to a large number of medical malpractice claims.
In response to these three problems, this enterprise, originally a drug distributor, provided hospitals with three solutions, and it was these three solutions that kept the drug distribution company's profits growing. The three solutions were:
Pharmacy trusteeship. This company had a very complete drug management system, and 400 hospitals signed pharmacy trusteeship contracts with it. This allowed it to schedule drugs in parallel across the 400 hospitals, ensuring that drugs in hospitals would not expire. For example, if Hospital A had a batch of drugs about to expire, and Hospital B happened to need them, the drugs could be transferred from Hospital A. This parallel integration helped each hospital minimize drug expiration waste.
Automated drug dispensing system. When a doctor wrote a prescription, an automated system would directly print the patient's name, and the drug would go directly to the patient. This automated system minimized the number of pharmacists and nurses, improving efficiency and reducing costs. Because the cost of an employee is not just salary; it also includes insurance, training, and many hidden costs. This automated dispensing system greatly reduced the cost pressure on hospitals, so most hospitals purchased this system.
At the same time, this automated dispensing system solved the problem of illegible doctor handwriting, reducing unnecessary claims.
Additionally, the company found that each surgery typically required 200 medical tools, so they packaged these common 200+ surgical instruments in a sterile package, which was very popular.
Thus, through overall solutions rather than a single product or service, this drug distribution enterprise transformed its relationship with customers from a transactional relationship to a strategic partnership of mutual growth. At the same time, this systematic solution created more profit opportunities for the drug distribution enterprise.
So, how can distributors transform from traditional distributors to regional market solution designers?
Traditional distributors, based on their long-term presence in the regional market, have a deeper, more detailed, and more acute understanding of consumer demand analysis, market trends, and consumption trends in that market than enterprises do for specific regional markets. Many small and medium-sized enterprises also lack competitive advantages in many regional markets. Traditional distributors can distill their understanding of the regional market into regional marketing design and solutions, especially providing forward-looking market solutions to enterprises, giving traditional distributors a huge survival space.
Here, the author summarizes several key elements for distributors to transform into "regional market solution designers":
Must have a true, in-depth, and systematic understanding of the current situation and development trends of the regional market, seeing what enterprises have not seen, taking the first step, and seizing the opportunity.
Conduct detailed and scientific market data surveys, collection, analysis, and compile into a strategic market development report.
Systematically analyze the pros and cons of the "solution report," its feasibility, resource integration and matching, and the degree of sharing between enterprises and merchants.
The operability of the solution, providing operational methods, seeking consensus, and implementation.
Risk prevention for the solution, minimizing risks.
Relevant hardware facilities and corresponding human resource allocation.
Internal sales personnel training, gradually transforming sales personnel from "business" to "consultant."
Proposal-based visits. Deeply think about "what are the problems and obstacles in this customer's business," "what suggestions and support can I provide for their business growth," and "how can we integrate our products into their business growth." Sales personnel should be adept at using data from the customer service information database and combine it with the customer's specific situation to form feasible proposal plans.
Organize internal learning activities where sales personnel exchange experiences and lessons from proposal-based services, and organize the content into the customer service information database.
Case Study:
Once in Japan, I observed a salesperson providing proposal-based service to a barbecue restaurant and a community retail store: For the barbecue restaurant, he explained a barbecue secret—adding a small amount of onion juice when marinating meat to enhance the meat's aroma (while also hinting that their company's light beer could reduce the greasiness of eating meat and increase customer appetite); for the community retail store, he redesigned the product display on the shelves and scientifically calculated the impact of the new versus old display on the store's business (of course, also securing the best shelf position for their company's new products).
Imagine, if terminal network owners can continuously obtain "business wisdom" from your sales personnel and increase their sales revenue with the help of your sales personnel, wouldn't they welcome your sales personnel's visits? Wouldn't they want your sales personnel to stay longer? Would they stop business relations? Would they not support your promotional activities?
Case Study: Asahi Beer
Customers have abundant information and choose products or different restaurants based on different purposes, places, and moods. To quickly and accurately meet these customer needs, Asahi Breweries, Ltd. and Nikka Whiskey Distilling Co., Ltd. merged their marketing departments. As a comprehensive liquor proposal-type enterprise, they actively provide the most appropriate services to various restaurants.
Utilize "information management" to always provide the most appropriate proposals.
"Information management" supports the activities of the marketing department. Asahi Breweries treats sales data, market trends, and customer opinions from consumption venues as valuable information resources and consolidates them into a system called the "Marketing Information Treasure Box." In this way, they keenly capture customer needs and quickly take countermeasures.
- Marketing Information Treasure Box
Establish a database on the intranet of information, knowledge, ideas, and experiences related to marketing activities, shared by the entire marketing department. Marketing personnel maximize the use of this database to conduct proposal activities for sales stores or restaurants.
- Voice of Quality
Customer opinions received by the customer consultation room are shared as "Voice of Quality" on the intranet and utilized.
- Support sales stores with the theme of "creating best-selling sales points."
Use the sales data and market data in the "Marketing Information Treasure Box" to support sales stores in creating best-selling sales points. Marketing personnel not only analyze and suggest improvements for each sales store's counter layout but also assist in store promotions and event activities each season. Additionally, to improve the quality of beer in stores, they conduct experiential training on product knowledge for sales store personnel.
- Help create stores that attract customers
To meet diverse and refined customer preferences, a professional food industry group—FULL HOUSE Co., Ltd.—was established. Professionals familiar with the field create detailed plans based on the geographical conditions and characteristics of each restaurant. They provide support services from store revitalization to new business development and renewal.
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