--- title: "When Traditional Marketing Models Hit a 'Dead End', Manufacturers and Distributors Must Restructure Their Marketing!" description: "Yang Yonghua, Chairman of Guanfeng Zhiye Group, argues that as China's market has shifted from shortage to surplus, traditional marketing theories like 4P and deep distribution have become ineffective. He proposes a 'restructuring' approach, moving from a focus on 'how to sell' to 'why customers buy', emphasizing customer experience, product innovation, and adapting to the mobile internet era." author: "杨永华" publisher: "New Distribution" email: "zhaobo258@gmail.com" telephone: "+8615854817671" published: "2017-10-12" language: "en" canonical: "https://xinjignxiao.com/en/articles/when-traditional-marketing-models-hit-a-dead-end-manufacturers-and-distr-004a58c3/" markdown: "https://xinjignxiao.com/en/articles/when-traditional-marketing-models-hit-a-dead-end-manufacturers-and-distr-004a58c3.md" original_source: "https://mp.weixin.qq.com/s/YtmovFN_17y2ktt7NdFzhg" translation: "https://xinjignxiao.com/zh/articles/%E5%BD%93%E4%BC%A0%E7%BB%9F%E8%90%A5%E9%94%80%E6%A8%A1%E5%BC%8F%E9%81%AD%E9%81%87-%E5%9B%B0%E9%A1%BF-%E5%8E%82%E5%95%86%E5%BF%85%E9%A1%BB%E8%BF%9B%E8%A1%8C%E8%90%A5%E9%94%80%E9%87%8D%E6%9E%84-004a58c3.md" attribution: "New Distribution — https://xinjignxiao.com/en/articles/when-traditional-marketing-models-hit-a-dead-end-manufacturers-and-distr-004a58c3/" usage_policy: "https://xinjignxiao.com/ai-policy.txt" --- # When Traditional Marketing Models Hit a 'Dead End', Manufacturers and Distributors Must Restructure Their Marketing! > Yang Yonghua, Chairman of Guanfeng Zhiye Group, argues that as China's market has shifted from shortage to surplus, traditional marketing theories like 4P and deep distribution have become ineffective. He proposes a 'restructuring' approach, moving from a focus on 'how to sell' to 'why customers buy', emphasizing customer experience, product innovation, and adapting to the mobile internet era. By Yang Yonghua, Chairman of Guanfeng Zhiye Group The establishment of marketing concepts in Chinese enterprises began in the mid-1990s, as the gradual increase in the supply of goods changed the market pattern from scarcity and supply falling short of demand. With abundant supply, competition emerged in the supply market, and enterprises generally recognized that marketing is the leader of the enterprise, determining its growth speed. Marketing received widespread attention from enterprises. Entering an era of total surplus, traditional marketing models encounter a 'dead end' The term 'marketing mix' first appeared in the United States in 1953, and China's marketing enlightenment and start also originated from the United States. The marketing concepts and theories accepted by the first generation of marketers were mostly those of Mr. Kotler, known as the 'father of marketing'. Driven by overall socio-economic development, our marketing has gone through stages such as 4P, 4C, 4R, and 4RS, and marketing has achieved an absolute position in Chinese enterprises. It should be noted that when our 4P marketing reached a balance between supply and demand, or when basic needs were greatly satisfied, 4C marketing theory began to become the dominant theory. Compared to the four basic elements of 4P marketing (product, price, place, promotion), 4C marketing, after changes in the market supply-demand environment, led enterprises' marketing concepts from the customer's perspective. 'C' is an abbreviation for the English word 'forget'. Forget the product and find the customer's potential needs; forget the price and find the customer's purchasing power; forget the place and find the customer's buying method; forget promotion and find the customer's preferences. This customer-oriented thinking led a large number of enterprises to start marketing innovation and also made a large number of enterprises successful. The main reason for revisiting 4C marketing here is that this marketing theory promoted the progress of Chinese enterprises, and it is the basic skill for solving future problems of enterprises. Of course, every change in the market pattern will see a theory or concept replace the previous one, and new theories and concepts will also make a number of enterprises successful. This is what we often say: the degree of marketing progress of an enterprise is directly proportional to its awareness of changes in the market pattern. Looking back at the current market pattern, we can clearly see that our market supply and demand have undergone a fundamental reversal compared to 30 years ago, from supply falling short of demand, to supply-demand balance, and now to supply exceeding demand. Our manufacturers and distributors must clearly recognize that our market has entered an era of total surplus where supply exceeds demand. From a problem perspective, all our industries have entered a state of total surplus, and the scale of industry totals has begun to slowly decline. This slow decline will bring about the closure of a large number of enterprises with excess capacity. From an opportunity perspective, behind the total surplus, there are opportunities for structural or personalized insufficiency. That is, while the scale of industries is generally declining, the output value of industries is increasing. In other words, our consumer demand has been greatly satisfied in terms of quantity, but the demand for quality and value has not been fully met. This logic can explain the 'Japanese toilet seat phenomenon' and also explain why the number of Chinese people traveling abroad for shopping exceeds 100 million each year, with Chinese consumers' crazy shopping constantly being staged in foreign markets. **Since 2012, our enterprises have encountered marketing difficulties, manifested in two aspects:** One is that the marketing theories and concepts that guided our enterprises for over a decade suddenly failed, and our marketing work has faced unprecedented pressure. The other is that no new marketing theories or concepts have emerged. Even the top domestic marketing experts and scholars of the past decade or so have lamented the discontinuity of theories and the exhaustion of thinking. Deep distribution has been the theory and concept guiding Chinese enterprises' marketing actions since 1998. **Currently, enterprises not only lament that they cannot bear the cost of deep distribution, but also cannot bear the ineffectiveness behind this high cost.** The premise for deep distribution is twofold: first, the supply of goods is not fully sufficient, and consumer demand has not been fully satisfied. By improving channel efficiency and facilitating customer purchase, competitive advantage can be achieved. Compared to the past, now transportation and information are developed, and with the rise of internet e-commerce, customers can purchase anytime and anywhere conveniently, so the dividend of channel efficiency improvement is gradually disappearing. Second, the market channel was single, in the era of main channels. Compared to the past, channels are now fragmented and diversified, and the main channel is gradually being divided. Without a main channel, deep distribution is difficult to be effective. At the same time, with the loss of the main channel and the fragmentation and diversification of channels, the difficulty and cost of deep distribution will increase. **From the above analysis, it is not difficult to see that for a long time in the past, our marketing task was to make it convenient to buy and happy to buy.** Convenience to buy requires marketing to solve the market channel occupancy rate, that is, to achieve convenient customer purchase by improving the distribution rate. And when everyone has completed the marketing task of channel distribution rate, at this time, competing for channel positions and implementing terminal visualization becomes the main means to stimulate customer purchase. When marketing methods become homogeneous and after long-term accumulation, coupled with the explosion of the supply market and the great satisfaction of the demand market, a market situation where supply exceeds demand is formed. Marketing will naturally enter a dead end after the scramble. Under the guidance of deep distribution theory, the distribution rate and terminal visualization have been taken to the extreme by all enterprises. After this collective extreme, overall incompetence will be revealed. This is our position and our environment. **In 2013, through practical research, we proposed the 'restructuring' theory.** It tells enterprises gradually entering difficulties that only through restructuring can they be reborn. We studied the market development process of Western developed countries, including the United States, Germany, and the United Kingdom, and found the directions and methods they used in the past to solve the market stage of oversupply, total surplus, and structural insufficiency. Combined with China's actual situation, we proposed directions and methods to solve the current marketing difficulties of enterprises. Through the proposal and practical improvement of the restructuring theory, we not only summarized the principles from restructuring to rebirth, gave the direction of restructuring, but also provided methods in terms of brand, organization, strategy, product, market, and promotion. Here, we propose the direction and methods of marketing restructuring for enterprises in marketing difficulties, so that more enterprises can have coordinate-based practical actions. Of course, it is also to avoid blind actions by enterprises. Marketing restructuring: from studying how to sell to studying why to buy Under the premise of oversupply and total surplus, the marketing mission of convenient and happy buying has ended. **From now on, why customers buy and how to make customers buy become the new mission of marketing. We describe this stage of marketing mission as customer experience.** In layman's terms, it is 'prying open the mouth'. To solve the current marketing difficulties, enterprises need to work on two aspects: first, they must be able to develop products that make customers scream, which is fundamental. Our enterprises should see that total surplus is a problem, while structural or personalized insufficiency is an opportunity. Enterprises must deeply study customer needs and provide customers with more valuable products. In this regard, many enterprises have already set an example. The decline of mobile phone giants Motorola and Nokia was due to their failure to develop products that made customers scream, while Apple and Samsung replaced the giants by developing such products and became new giants. Bright Dairy was once silent for a period, but by shifting from the nutritional white milk stage to healthy flavored milk in China's dairy consumption demand, it developed Mosilian fermented flavored milk, becoming the leader in this category and putting the enterprise on a fast growth track. With the rise of the young consumer group and the push of the internet, the personalized characteristics of young consumers are becoming more and more obvious. **Brand is no longer the only choice for young consumers; quality is the weapon to win the hearts of young consumer groups.** **Of course, enterprises' product development must also get out of the misunderstanding of closed-door work.** Product R&D requires in-depth consumer research, discovering customers' potential needs and their dissatisfaction with existing products, in order to develop products that make customers scream. Second, enterprises need to change the fishing-style product promotion method. The traditional distribution rate and terminal visualization are fishing-style market promotion methods. In the future, enterprises need to take the initiative to implement customer experience in a 'prying open the mouth' way. Our research found that **in recent years, slow sales have been a common problem for all enterprises. The root causes are, first, homogeneous products leading to oversupply; second, homogeneous market operation methods leading to people selling but no one buying.** The marketing of the vast majority of enterprises aims at channel competition, with a large amount of market expenses invested in channels while ignoring consumers. We once asked an enterprise: why did a 100% channel occupancy rate result in less than 5% market share? Occupying channels is only a means; the real purpose is to occupy consumers through occupying channels. Our manufacturers and distributors must clearly recognize that competition has shifted from 'those who gain channels gain the world' to 'those who gain customers gain the world'. At this stage, enterprises not only need products that make customers scream, but also the ability to let customers experience and make first purchases. Otherwise, even good wine fears deep alleys. To solve marketing difficulties, marketing restructuring must change the traditional marketing concept of 'selling'. Marketing is not selling products, not selling prices, not selling promotions; marketing is the process of studying needs, discovering needs, and satisfying needs. **To solve marketing difficulties, marketing restructuring must start from 'buying' and answer the following questions:** First, why do customers buy? What distinctive value does your product provide to customers? A few years ago, we proposed: 'If you want to succeed, give customers a reason to buy.' Second, how to make customers recognize your distinctiveness. Enterprises must change the 'boasting' selling point promotion behavior and implement 'buying point' experience. Third, how do customers buy your product? Enterprises should provide convenience for customers to buy products according to changes in customers' living habits and purchasing habits. Just like the experience a few days ago when we went to a market to provide e-commerce guidance to a Qingdao Beer distributor. We discussed with the Qingdao Beer distributor that in his market, there were still several hundred orders per month on the e-commerce platform. We asked: why, with such a high distribution rate that already facilitates customer purchase, do customers in your market still place several hundred orders per month on the e-commerce platform? And the order volume is increasing. The final conclusion was that for one type of customer, the experience of ordering by mobile phone is better than going to the supermarket to buy by themselves, not to mention the delivery service. Then, if the distributor could also deliver a case of beer to the door, would it surpass the channel e-commerce orders? The answer is no. Mobile internet promotes marketing upgrade to version 6.0 Traditional marketing starts from 'selling', forming the 'three and a half axes' of traditional marketing: distribution, display, and promotion. Facing slow sales, add 'half an axe': tasting. However, these marketing actions were correct and very effective in specific periods. We often say: 'Truth divorced from specific circumstances is also a fallacy.' Undoubtedly, the specific environment of traditional marketing has undergone essential changes due to 'mobile internet'. So the 'three and a half axes' of traditional marketing are outdated. Nothing appears out of thin air; everything is 'evolved' on the basis of the original. In recent years, through consulting and planning practice and research with more than 30 enterprises, the marketing 6.0 version in the mobile internet era we proposed is also 'evolved' on the basis of traditional marketing. First, the distribution of traditional marketing, in the mobile internet era, needs to 'evolve' into 'distribution + building groups'. Through 'distribution + building groups', achieve 'sticky interaction' with channel partners. That is, the marketing 6.0 system is completely built on the basis of 'communities'. A series of actions are also carried out relying on 'groups'. Second, the display of traditional marketing, in the mobile internet era, needs to 'evolve' into 'scenes'. We have a very sharp viewpoint: a display without a scene is like a 'dead person's face' and will not attract consumer attention. In the era when goods were not abundant or not surplus, we said 'piling goods like a mountain' was a business rule. But under the supply-demand background of 'total surplus', 'piling goods like a mountain' is a psychological pressure on consumers, also called 'commodity pollution'. A 'mountain' without a 'scene' will not only not promote purchase but will bring 'rebellious' psychology to consumers. The mobile internet era is the era of 'scene consumption', because 'scenes' answer why consumers buy from the perspective of consumer psychology. Therefore, displays that do not create 'scenes' are useless work that 'wastes money and manpower'. Third, the promotion of traditional marketing, in the mobile internet era, needs to 'evolve' into 'first push + screen brushing'. We must understand that the biggest difference between the mobile internet era and the internet era is that 'customers are always online'. According to statistics, WeChat currently has 680 million users, and these users log in to WeChat an average of more than 15 times a day, spending 90 minutes online on WeChat. Through this set of data, enterprises must understand: the past marketing mission was to distribute products to consumers' side and achieve 'convenient and happy buying' through display. The current marketing mission is to 'invite customers to their phones and achieve customer experience in a scene-based way'. Source: Jiuye Jia (ID: jiuyejia360) The 3rd (CFIC) China FMCG + Internet Conference will be held in Chongqing in November 2017. The conference will closely focus on the theme 'New Forces, New Ecology', inviting domestic **1000+ distributors, 500+ brand owners, founders of 200+ B2B platforms, and 100+ investment and financing institutions** to jointly explore a new chapter of cross-border integration! **November 8-9, 2017** **Chongqing Yuelai International Conference Center, Xinyue Hall** **Registration is now open. Long press the QR code below or click 'Read Original' to register.** Add friend and note 'Conference Registration' Click the links below to review the highlights of the 1st and 2nd FMCG + Internet Conferences: [2016 'FMCG + Internet' Summit Forum]() -END- --- ## Copyright and AI use This article is sourced from New Distribution. 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