The regional division should maintain a reasonable density, match with the dealers, and try to achieve a radish and a pit. There is no fixed standard and answer for choosing a dealer, one or more, but what can be grasped is to maintain a reasonable density in combination with the market situation at that time and the actual situation of the enterprise.
Let's look at an example:
The regional manager of the security door enterprise has a special dealer in the local area, and is responsible for the general promotion of the security door market in the entire regional market. After more than a year of cooperation between the two sides, the company has achieved very good results in the local area, and the sales of security doors have increased by 150% compared with the previous year, and the future is bright. Guo Ming was worried at this time, he felt that the market had been opened, and he should choose two or more dealers to speed up the pace of market expansionBut at the same time, he felt that there were quite a few reasons to choose the original dealership. In this situation, Guo Ming felt a dilemma.
This is a common situation in the marketing world, and it is also a headache for many marketers. So, in this case, should we choose one dealer or two (more) dealers?
Choosing a distributor is the right decision for many businesses. Because choosing a dealer is of great benefit to the enterprise to win the market.
First of all, enterprises continue to use a single dealer system in the regional market, which can better safeguard the interests of dealers, ensure their future income, and win their "loyalty". Dealers are interest-oriented, and the company adopts a single dealer system, so that there is only one dealer in a regional market who occupies a monopoly position, and the dealer can obtain higher profits through leverage, so as to more closely maintain the partnership between the two manufacturers.
Secondly, the company adopts a single dealer system, and the adjustment of channel strategy is not large, which is conducive to maintaining channel stability and appeasing the "military heart". Dealers pursue profits, but also want to reduce their own business risks as much as possible. The vast majority of dealers' business risks are due to the arbitrary changes in corporate marketing policies. The marketing policy of the enterprise remains unchanged, or the change is small, the dealer's operating risk will be greatly reduced, which is conducive to enhancing the confidence of dealers, stimulating dealers to continue to increase market investment, and enterprises will also get corresponding returns.
Thirdly, if an enterprise insists on choosing a dealer, it can set a "model" for its own dealers and other dealers. The word of mouth of dealers is very fast and extremely important, and dealers especially value those companies that speak of credibility. Enterprises continue to choose a dealer, can enhance the confidence of dealers, after all, the early pay after all has the present rich returns;This also creates a good image of "honest marketing" for peers in the industry. This allows companies to quickly expand into other markets.
Finally, the enterprise chooses the single dealer system, which can avoid the conflict of interests caused by the large number of dealers in the later stage, and even the resulting market decline.
However, in many cases, there are corresponding risks in the selection of a distributor, or there are many drawbacks.
First of all, it is difficult for the dealers selected by the enterprise to cover the entire market, and it cannot meet the growing market capacity, which restricts the pace of development in the direction of the enterprise.
Secondly, due to the lack of competitors, the market pressure is not very large, and the dealers selected by the enterprise may slack off until the control and expansion of the market are relaxed, resulting in a market decline.
Thirdly, a single dealer may mistakenly believe that the enterprise cannot leave itself, so it puts forward various unreasonable requirements for the enterprise, hoping to challenge the market control of the enterprise to "master" the final right to speak. This is the "nature" of dealers.
Fourth, a single dealer through the monopoly, obtain high profits, do not want to forge ahead;The surrounding market may not be able to do the same good, in order to complete the sales task or rebate, the enterprise marketing personnel and dealers in other regions will inevitably do everything possible to channel the goods into the region, disrupting the order of the regional market.
The question of choosing one dealer or two (more) dealers is somewhat similar to whether the enterprise development strategy is specialized or diversified.
Let's take a look at the benefits of choosing two (more) distributors (the following will be replaced by two distributors).
First of all, choosing two dealers can cover the entire market faster and better. In the market, the rise of many products and enterprises is often completed in just one or two years, so how to cover the entire market as soon as possible and complete the construction of the entire market network is an important factor for enterprises to win the ultimate success. Choosing two dealers can just make up for the shortcomings of one dealer and quickly expand the company's power to every corner.
Secondly, choosing two dealers is easy to open the entire market and meet the fast-growing market demand. Consumers' consumption needs are often concentrated in a moment, and such a huge market capacity is difficult for a dealer to complete alone.
Again, select two dealers, introduce a competition mechanism, improve the competition awareness of dealers, enhance their market vitality, and lay a solid foundation for enterprises to win a larger market in the future.
Fourth, choose two dealers to facilitate the overall control of the enterprise, after all, the room for enterprises to choose will be greatly extended.
Of course, society is a mixture of contradictions, and there are advantages and disadvantages. Choosing two distributors is not always a good thing for a business.
First of all, the company chooses two dealers, then the original monopoly advantage will be gone, dealers will bargain with each other, the gross profit of the product has dropped sharply, even close to or even lower than the purchase price, dealers are unprofitable, of course, they do not have any confidence and intention to distribute the company's products, the sales volume of the enterprise does not rise but falls, and the market has declined sharply.
Second, dealer loyalty is no longer good. As the company chooses multiple distributors and the average profit is greatly reduced, the enthusiasm of the dealers decreases, and they lose confidence in the whole enterprise and turn to other competing brands.
Third, the new dealers are not necessarily the dealers who are really the dealers of the enterprise. Some dealers see that the brand that a competitor distributes is extremely popular, and they often find a way to join the brand first, and then focus on selling other competing brand products under the guise of distributing that brand's products. The enterprise is "accompanied by the wife and the soldiers".
Fourth, enterprises change their channel strategies at will, so that the original dealers are cold, so that the later dealers are afraid, and the company destroys all its image in the industry with its own stupid tricks. The market expansion in the later stage will be extremely difficult. For example, a well-known household appliance brand, well-known in China, has adopted the special dealer system in the early days, so that many dealers have made a lot of profits, and the future is brightLater, the brand thought that the dealers were too fierce to make money, in order to better "develop" the market, in many places to use a number of dealers, the network is spread across the country, sales are declining, the early partners have become competitors "iron buddies". In this regard, enterprises must be guarded against.
When the market is growing rapidly, there is no unified answer to whether enterprises choose one dealer or two dealers. It should be said that the two choices have their own reasons. There was a saying in the ancient military book: "the use of the wonderful, care about one heart", the enterprise to choose a dealer or two dealers, more important is to combine the specific local conditions at that time, combined with the overall marketing strategy of the enterprise and the specific situation of the dealer to make a final choice.