Basic tasks of distribution strategy

1. Selection of channel strategy; 2. The choice of middlemen; 3. Logistics organization and management.

distribution channel

Distribution channels refer to all enterprises and individuals that acquire ownership or help transfer ownership when a commodity or service is transferred from producers to consumers. It mainly includes merchant middlemen, agent middlemen, and producers and consumers at the beginning and end of the channel. Under the condition of commodity economy, products must move in the form of value through exchange, so that products can be transferred from one owner to another until they reach consumers. This is called business flow. At the same time, along with the business flow, there is also the spatial movement of product entities, which is called logistics. The combination of business flow and logistics enables products to reach consumers from producers, which is the distribution channel or mode.

Structure of distribution channels

Distribution channel consists of five processes, namely, entity process, ownership process, payment process, information process and promotion process. 1. Entity process. Physical process refers to the process in which physical raw materials and finished products are transferred from manufacturers to final customers. 2. Ownership process. The ownership process refers to the process of transferring the ownership of goods from one marketing organization to another. Its general process is: supplier-manufacturer-agent-customer 3. Payment process. Payment process refers to the flow process of payment between marketing intermediaries. 4. Information flow. Information flow refers to the process that marketing intermediaries transmit information to each other in marketing channels. 5. Promotion process. Promotion process refers to the process that one unit exerts influence on another unit through advertising, personnel promotion, public relations, promotion and other activities.

Principles of choosing distribution channel model

When choosing a specific distribution channel model, distribution channel managers should generally follow the following principles, no matter what considerations and where to start:

(A) the principle of smooth and efficient

This is the first principle of channel selection. Any correct channel decision should meet the requirements of smoothness, economy and efficiency. The circulation time, speed and cost of commodities are important signs to measure the circulation efficiency. Smooth distribution channels should be guided by the needs of consumers, and products should be sent to places convenient for consumers to buy at the best possible price through the shortest route as soon as possible. Smooth and efficient distribution channel mode should not only allow consumers to buy satisfactory goods at reasonable prices at appropriate places and times, but also strive to improve the distribution efficiency of enterprises and reduce the distribution cost, so as to obtain the maximum economic benefits at the lowest possible distribution cost and win competitive time and price advantages.

(B) the principle of appropriate coverage

It is not enough for enterprises to only consider speeding up and reducing costs when choosing distribution channel models. We should also consider whether the goods delivered in time and accurately can be sold and whether there is a high market share enough to cover the target market. Therefore, we can't blindly emphasize reducing distribution costs, which may lead to a decline in sales and insufficient market coverage. Cost reduction should be the result of scale effect and speed effect. In the choice of distribution channel mode, we should also avoid excessive expansion and wide distribution scope, so as not to cause difficulties in communication and service, which will lead to the inability to control and manage the target market.

(3) the principle of stability and controllability

Once the distribution channel model of an enterprise is determined, it needs considerable manpower, material resources and financial resources to establish and consolidate, and the whole process is often complicated and slow. Therefore, enterprises generally will not easily change channel members, nor will they randomly change channel modes. Only by keeping the channel relatively stable can the efficiency of the channel be further improved. Smooth and orderly, moderate coverage is the basis of stable distribution channels. Because the factors affecting distribution channels are always changing, some unreasonable problems will inevitably appear in some original distribution channels. At this time, the distribution channel needs to have certain adjustment functions to adapt to the new situation and changes in the market and maintain the adaptability and vitality of the channel. In the process of adjustment, we should comprehensively consider the coordination of various factors, so as to keep the channel in a basically stable state within the controllable range.

(d) the principle of coordination and balance

When choosing and managing distribution channels, enterprises should not only pursue the maximization of their own interests and ignore the local interests of other channel members, but should distribute the interests among all members reasonably. The relationship of cooperation, conflict and competition among channel members requires channel leaders to have certain control ability-guiding channel members to cooperate fully, encouraging beneficial competition among channel members, reducing the possibility of conflict, solving contradictions and ensuring the realization of the overall goal.

(5) the principle of giving full play to advantages

In order to gain advantages in the competition, enterprises should pay attention to their own advantages in all aspects, and combine the design of distribution channel model with the product strategy, price strategy and promotion strategy of enterprises to enhance the overall advantages of marketing mix.

Evaluation and selection of distribution scheme

There are three evaluation criteria: economy, controllability and adaptability, and the most important one is economy.

First, the choice of terminal point of sale

Terminal point of sale refers to the place where goods leave the circulation field and enter the consumption field. For consumer goods, it is a retail point; For the means of production, it is a transit station. Terminal point of sale is the frontier position for enterprises to realize their own business goals. Whether the products of an enterprise can finally be sold out and achieve ideal economic benefits is directly related to the selection and operation of terminal sales points. Therefore, as the first step of distribution management, it is to choose the terminal sales point that best meets the characteristics of enterprise products or services, and then achieve the sales target through effective management. Otherwise, the whole distribution work from the enterprise to the terminal point of sale will become inefficient or even ineffective labor. Therefore, for an enterprise, the first step to enter the market and organize commodity sales is to choose the terminal point of sale. (1) The principle of choosing the terminal point of sale The marketing principle tells us that before entering the market, we must first segment the market and choose the target market. This is one of the important principles of marketing. Target market, that is, target customers, who are they? This is the first thing that marketers should be clear about. Only by determining who is the target customer can we find out what he needs and what goods he needs, and then when and where to sell the goods he needs. In commodity distribution activities, we must also adhere to the principle of target market (target customer). Adhering to this principle is to provide suitable products according to the needs of target customers; Sell goods at the right time according to the time required by the target customers; Decide where to sell goods according to where the target customer needs to happen. The choice of terminal sales point is a planning activity to organize commodity distribution according to the principle of target market. Choosing the terminal point of sale is to break the aimless sales model of "Jiang Taigong fishing, the willing takes the bait" in the past, and send the goods to the places where consumers are most willing to patronize and buy them easily, so that customers can buy them in time and conveniently. Correct selection of terminal sales points is of great significance for expanding commodity sales. Under normal circumstances, consumers' demand is obviously time-sensitive, and only when the demand occurs, people have a strong desire to buy. If you can buy related goods nearby and conveniently, you can meet their needs in time. Because consumer demand is personalized and diversified, the choice of terminal sales points should also consider consumers' shopping psychology. The choice of terminal point of sale mainly depends on: 1. Customer's requirements for the most convenient place to buy; 2. Requirements of places that customers are most willing to patronize and buy; 3. Location requirements for goods to be fully displayed and recognized by more people; 4. Establish the position requirements of product image, etc. These requirements are embodied in the choice of terminal sales points. It is required to choose a direct customer-oriented distribution point according to the characteristics of the target market and competition, the economic strength of the enterprise itself, product characteristics, public relations environment, market foundation and other factors, as well as the external market environment, competitors and market purchasing power level. (2) Choosing purchasing power level according to consumers' income and purchasing power level is one of the important elements of "market". If customers have high purchasing power, they will not only buy a large number of certain goods, but also buy high-grade goods, and people are willing to pay high prices for high-quality brand-name goods. If the purchasing power level is low, not only will the product grade not go up, but the sales of low-grade goods will also be restricted. The purchasing power of consumers comes from personal income, so it can also be said that income level is an important basis for guiding enterprises to know commodity buyers and choose terminal sales points. Consumers with different income levels have different choices and requirements for the place to buy goods. Therefore, when selling products or services, enterprises should first consider the positioning of the consumer groups they face. Therefore, enterprises must consider the level of disposable personal income and disposable personal income in different places when choosing terminal sales points. With the number of competitors unchanged, if the income level in the region is high, it is necessary and possible for enterprises to set up sales points in the region. On the contrary, if the income level is not high and the purchasing power is weak, we should be cautious. Generally speaking, consumers with higher income and stronger purchasing power buy more, and they are willing to decorate beautiful and reputable large shops, even if the goods there are more expensive than other shops, they don't care. However, those consumers with low income and small purchasing power show different buying behavior characteristics. Of course, enterprises should also pay attention to the characteristics of the goods they operate when considering the constraints of income level on the choice of terminal sales points. If it is a general mass consumer product, it is not very difficult to enter the market, and it can be widely set up at different income levels (including urban and rural areas); On the other hand, if it is a high-end consumer product that is not essential for life, it should generally consider setting up a sales point in an area with a higher income level. Especially for some daily high-end consumer goods, such as clothes and furniture, monopoly points can be set up in large and medium-sized cities with high income level and concentrated population. Otherwise, if there is no certain sales guarantee, the store will be difficult to maintain. In addition, an issue that enterprises should also consider when setting up sales points is that those areas with higher income levels have higher operating expenses and thus greater risks. Therefore, whether an enterprise sets up a terminal point of sale and what form it chooses must consider its overall strength. For example, in some places with high income level, retailers as terminal sales points, especially some large shopping malls, often charge manufacturers' fees such as "product entrance fee", "shelf fee" and "bar code fee". If these expenses affect the whole economic benefit, it is better to find another way. In addition, not all goods have to be built in the central business district to be conducive to sales. So we must consider a cost-benefit ratio here. (3) Choose according to the location where the target customers appear, so that consumers can buy them conveniently once they need them, that is, "the goods must follow the consumers". No matter where consumers appear, goods that meet consumers' needs or shopping desires will appear at the same time. It is necessary to carefully study the possible range of activities of consumers, and what their possible needs and purchasing desires are in each place. Generally speaking, the places where target customers often appear are: residential areas, commercial streets, schools, hospital gates, playgrounds, stations, docks, parks, leisure places, workplace edges, traffic trunk lines, etc. (4) According to customers' purchasing psychology, different customers' purchasing interests, concerns and shopping expectations are different. Customers' purchasing psychology directly affects their purchasing behavior. Therefore, if we do not consider the customer's purchasing psychology under specific conditions, time and place, blind selection of points will often produce unsatisfactory results. (V) Choosing enterprises according to the needs of competition When choosing terminal sales points, we must consider the situation of competitors from the perspective of survival or development. Therefore, the factors to be considered mainly include the following points: the number of competitors, competitors' strategies, competitive advantage strategies, strategic objectives of enterprises, and product life cycle. 1. The number of competitors The more competitors there are, the more difficult it is to choose the terminal sales point, because on the one hand, it means that the market competition will be more intense, on the other hand, it also means that the market demand is getting closer to the saturation boundary, which requires enterprises to be more cautious. Of course, many competitors also show that the popularity of goods is quite high, which will lead to the diversification of channel forms and is also conducive to the choice of terminal sales points. For example, communication products are sold in department stores, even in "counters" of clothing stores, hardware stores and grocery stores, in addition to relatively formal small-scale modern communication stores. 2. Competitor strategy When choosing a terminal sales point, an enterprise must study and investigate the strategies adopted by competitors, and then choose a point according to its own strength and conditions. Generally speaking, we should not adopt the same strategy as our competitors, so as to develop our strengths and avoid weaknesses, complement each other's advantages and make the market develop in a coordinated way. 3. Competitive advantage The construction of strategic channels should attach importance to the advantages of enterprises. For example, while foreign brands enter the urban market of China, domestic enterprises can give full play to their "local" advantages. Strive to establish their own distribution network and convenient service system in the vast rural market. 4. The strategic goal of the enterprise The strategic goal of the enterprise is the overall goal of the enterprise's development in a certain period of time. Distribution is one of the important means to achieve the above goals. For example, if the strategic goal of a large multinational enterprise is to occupy emerging markets, it must consider the markets of China, India and other big countries, so it should concentrate on establishing terminal sales points in these countries. However, distribution does not only passively adapt to the strategic objectives of enterprises, but its formulation and implementation will in turn affect the realization of the strategic objectives of enterprises. 5. There is no channel or distribution network in the product life cycle to ensure that the product always maintains its competitive advantage in the life cycle. Therefore, enterprises must consider the change, stage and length of product life cycle when choosing terminal sales point. (VI) Choosing a sales method According to the sales method, it mainly refers to the forms adopted by enterprises when selling products, mainly including sales with stores and sales without stores. Under the modern market conditions, there is a trend of diversification in sales methods. Therefore, enterprises can choose a certain type of sales methods or adopt multiple sales methods at the same time when choosing terminal sales points, and make them complement each other.

Second, the density of the terminal point of sale determines.

The density of terminal sales points is directly related to the balance of the overall layout of the enterprise market. If the distribution is too fine, it will not be conducive to fully occupying the market; If it is too dense, it may increase the sales cost, and the sales efficiency may be greatly reduced, which will aggravate the conflicts and contradictions between sales points. Therefore, how to maintain the moderate distribution of terminal sales points has become the key and central task of density decision. (I) The task of terminal point-of-sale density decision The basic task of terminal point-of-sale density decision is to determine how many channel members an enterprise uses to sell products in the target market, so as to maximize product distribution efficiency. The market coverage and distribution efficiency of enterprise products are the main basis for evaluating the correctness of enterprise terminal point-of-sale density decision. Where the market coverage is high, the density of terminal sales points will be higher, because if there is not enough market coverage, it is difficult for production enterprises to achieve sales targets. Market coverage should be analyzed by market segments. Sometimes, although the total market coverage of a product is satisfactory, it is not so optimistic if it is aimed at a specific target market. Distribution efficiency mainly refers to the delivery time and speed of enterprise products from manufacturers to target customers. A good distribution network should deliver products to consumers quickly, and the cost of transportation and management should be as low as possible. If the terminal point-of-sale network established by the enterprise can achieve this goal, it shows that its density is moderate. Otherwise, further improvement is needed. Specifically, the task of terminal point-of-sale density decision has the following three points: 1. Maintain the balanced development of each terminal sales point of the enterprise. 2. Promote the coordination of terminal sales points and reduce conflicts between sales points. 3. Promote the orderly expansion and sustainable development of the enterprise product market. In essence, this requires us to pay attention to the combination of short-term strategy and long-term strategy of enterprise market development when making decisions on the density of terminal sales points. (II) Optional density schemes Enterprises can adopt different density schemes according to the decision-making tasks of terminal sales points and the present situation and changing trends of themselves and the market environment. 1. Intensive distribution strategy In intensive distribution, all channel members who meet the manufacturer's minimum credit standards can participate in the distribution of their products or services. Intensive distribution means fierce competition among channel members and high product market coverage. Intensive distribution is most suitable for convenient products. It promotes sales by maximizing the convenience for consumers. Adopting this strategy is conducive to widely occupying the market and facilitating the timely purchase and sale of products. The disadvantage is that the number of dealers who can provide services in intensive distribution is always limited. Manufacturers sometimes have to evaluate dealers' training, distribution support system and transaction communication network in order to find obstacles in time. However, in a certain market area, the competition among dealers will lead to the waste of sales efforts. Because intensive distribution intensifies the competition among dealers, their loyalty to manufacturers decreases and the price competition is fierce, dealers are no longer willing to receive customers reasonably. 2. Choose a distribution strategy. Manufacturers choose some middlemen in specific markets to promote their products. By adopting this strategy, production enterprises do not have to spend too much energy to contact a large number of middlemen, and it is also convenient to establish good cooperative relations with middlemen, so that production enterprises can obtain appropriate market coverage. Compared with intensive distribution strategy, this strategy has stronger control and lower cost. A common problem in selecting dealers is how to determine the regional overlap of dealers. The overlap in the selective distribution determines how close the selective distribution is to the dense distribution in a given area. Although the market overlap rate will be convenient for customers to buy, it will also cause some conflicts between retailers. Low overlap rate will increase the loyalty of dealers, but it will also reduce the convenience of customers. 3. The exclusive distribution strategy means that the production enterprise only chooses one middleman to sell its products in a certain area and at a certain time. Exclusive distribution is characterized by low competition. Generally speaking, only when the company wants to establish a long-term close relationship with the middlemen will it use exclusive distribution. Because it needs the cooperation and cooperation between enterprises and distributors more than any other distribution form, its success is interdependent. It is more suitable for professional products with higher service requirements. Exclusive distribution protects dealers, that is, it avoids the risk of fighting with other competitors. Exclusive distribution can also allow dealers to increase sales expenses and expand their business without worrying that the production enterprises will find another job. Moreover, with this strategy, manufacturers can have strong control over the sales price, promotion activities, credit and various services of middlemen, and manufacturers engaged in exclusive distribution also expect to obtain strong sales support from dealers through this form. The shortage of exclusive distribution is mainly due to the lack of competition, which will weaken the strength of dealers and bring inconvenience to customers. Exclusive distribution will make dealers think they can dominate customers because they have a monopoly position in the market. For customers, exclusive distribution may make them feel inconvenient when choosing the place to buy. Using exclusive distribution, usually the two sides have to sign an agreement, in a certain area, for a certain period of time, stipulating that dealers are not allowed to distribute products of other competitors; Manufacturers are also not allowed to find other middlemen to distribute products. (III) Evaluation criteria and methods for selecting density schemes The main criteria that enterprises can refer to when making density decisions are as follows: 1. The cost of distribution network can be divided into two categories: one is the investment in developing distribution network; The other is the cost of maintaining the network. Similar to the production cost, the investment in developing distribution network can be regarded as a fixed cost, while the maintenance cost can be regarded as a current cost. These two constitute the total cost of the distribution network. Obviously, when choosing the density scheme, we must make a blind decision without considering the cost. It is necessary not only to control the overall level of product sales costs, but also to form a mechanism to continuously reduce costs through the improvement of distribution efficiency. 2. Market coverage In addition to those enterprises that have just started in the market, enterprises that are in the process of growth, expansion and maturity cannot ignore the market coverage of their products at any time. It can be said that the coverage rate is always the core factor that must be considered in the decision-making of enterprise density, because it relates to the survival and development of enterprises. In other words, it is not enough for enterprises to only consider reducing the cost of distribution network when designing distribution network. The pursuit of reducing the cost of distribution network may lead to a decline in sales, and an appropriate increase in the cost of distribution network may also promote a greater increase in sales. Therefore, under certain conditions, in order to improve sales and market coverage, enterprises may even increase costs to achieve sales targets. This is because each specific distribution network is always aimed at a specific target market. The improvement of market coverage means the improvement of the sales ability of a distribution network, the increase of the survival and development space of enterprises' products, and the realization of long-term strategic goals of enterprises. 3. Control Ability An important criterion for the correctness of the decision-making of the terminal point-of-sale density of an enterprise is whether the enterprise can finally control the expanding distribution network. In fact, the decline of a considerable number of enterprises is due to their out-of-control of terminal sales points, which will not only reduce the distribution efficiency of enterprises, but also destroy the entire product market. In short, both exclusive distribution and selective distribution require enterprises to have good control over the distribution network.