The domestic stone market has been singing all the way in recent years, and market competition has become more intense. It cannot be said that it has been greatly stimulated by the development of cabinets and bathrooms. Most of the cabinet countertops are used in newly built residential areas. In 2005, this market accounted for more than 70% of the market share. However, the demand for China’s housing renovation market will continue to grow rapidly. According to an annual growth rate of more than 10%, it will exceed 30 million square meters in 2010! However, the good news of cabinet countertops and bathroom countertops alone will not be enough to support the huge Stone industry. How can this huge dragon take off? It is imperative to develop a new theater!
What is the purchasing power of consumers in the fourth-tier market? In the third-tier and fourth-tier markets, not only the consumption level of consumers is a measure of the economic development level of the market, but consumers in the primary and secondary markets tend to consume more and more rationally. Consumers in the third and fourth-tier markets are more inclined to perceptual consumption. In other words, when consumers buy products, they are likely to have the urge to buy a certain model of a certain brand. Therefore, it is very necessary for manufacturers to seize this opportunity on the basis of the good quality of their own products, and promote consumers’ final purchase through brand appeal and the patient guidance of store promoters.
Basic characteristics of the four-level channel pattern:
1. The first- and second-tier market-level channels are flattening. Distribution needs profit as its operating space, and distributors and subordinate dealers need to have their own profit space. If the channel is too long, there is no way to support the current profit margin, so the level of channels is gradually flat. At the same time, distributors go deep into the end of the channel market, by increasing market pull, reducing channel pressure, and fundamentally straightening out the entire supply chain.
2. There is still room for the third and fourth lines to retain hierarchical channels. Agent management experience still has advantages and can deeply clone hierarchical channel management experience to the low-end market.
3. The method of covering the third and fourth-tier cities through the regional platform puts forward higher requirements for the refined management of channels. As compared with the agents in the first and second-tier cities, the agents in the third and fourth-tier cities start late and have insufficient awareness of the product market. Therefore, a lot of enlightenment education is needed for the agents in the third and fourth-tier cities.
4. For dealers in third- and fourth-tier cities, most of them are direct customers and customer-oriented, so they have higher requirements for product richness. “In the third and fourth-tier cities, the demand for a single product is limited, and only one or two product lines cannot support the development of dealers. Therefore, the dealers in the third and fourth-tier cities are mostly composite types, which can often combine products of different brands. Interspersed for sales, and as a large distributor, in terms of product richness, it can well meet the requirements of distributors in third and fourth-tier cities.
5. On the way to expand channels in third- and fourth-tier cities, a key focus of major distributors is on risk control. Risk control is a very big competitive point for distribution. Whoever does it well may get a good return. For dealers in third- and fourth-tier cities, due to their relatively weak financial strength, risk control is particularly important.
Channel strategy for sinking third and fourth-tier markets. “Cultivating channels while cultivating markets” is the common idea of many manufacturers. In the third and fourth-tier markets, manufacturers treat all distributors equally. Many channel resources, including the price of goods and event support, are also shared by everyone. Manufacturers only set up one point in each city (third and fourth-tier markets).
1. “Cultivation Channels”. First of all, the market capacity of the third and fourth-tier market itself is very limited, not suitable for the coexistence of multiple dealers. If you overestimate the market capacity and blindly add more dealers, perhaps at the beginning of adding dealers, the market volume can indeed increase a bit, but after rising to a higher value, the sales curve may flatten out. The trend of online or downward trend goes against the original intention of adding distributors, and the most terrible malicious bargaining may spread out of control. This also runs counter to the manufacturer’s view of “cultivating the market.”
2. Work step by step. On the issue of expanding the third and fourth-tier markets, manufacturers are also following a step-by-step strategy and proceeding in accordance with the existing channel management model. The advantage of this is that the big brand manufacturers have formulated a very comprehensive and macroscopic strategy, which can maintain the continuity of the channel strategies of the primary and secondary markets and the tertiary and fourth-tier markets, and show the grand strategy of the big manufacturers. However, for the third and fourth-tier markets, any brand, regardless of its brand awareness in the primary or secondary markets, is equally unfamiliar to this market. Therefore, when entering a new market, whether a new brand or a big brand, they are basically on the same starting line in terms of market recognition.
3. Dig deeper. In the face of fierce competition in primary and secondary cities and the increasing saturation of certain product markets, in-depth tertiary and fourth-tier markets are indeed the only way for future development. However, compared with fierce competition in primary and secondary markets, three, The input to output ratio of the four-tier market undoubtedly needs to be carefully considered. What’s more, the uneven development of the domestic regional markets is very prominent, and the consumption habits, brand tendencies, and even local customs are very different. These all intensify the risk of manufacturers’ investment: simply copying the successful experience of the primary and secondary markets will inevitably lead to strategies. Targetlessness; the development of differentiated products and marketing strategies based on the characteristics of each regional market requires more energy and resources. Without sufficient financial resources to pay tuition fees, it may be difficult to flourish and make achievements in various regional markets.
4. Cultivate the core. A channel distribution system from general agent to core agent is adopted, and the number of agents at all levels is strictly set, and the number of core agents will also be strictly limited. Through quantity control, focus on cultivating the distribution capabilities and solution capabilities of core channel partners, and maximize the profits of agents.