Appliances vulnerable to build brand stores face internal and external challenges

The internal test stems from product adaptability, brand pull, supply chain control, etc. The external test is the distributor's acceptance of new channels. From regional agencies, home appliance chain companies, to the now booming home appliance manufacturers brand stores, channel construction and adjustment in the home appliance industry has never stopped. All this is to reduce channel costs, increase sales, and increase profits.

With the slowdown in growth in the primary and secondary markets and the increasing homogeneity of products, all manufacturers hope to have early access to the three or four-tier market channels and share their share. In the process, manufacturers have to withstand the double test of internal (including product adaptability, brand pull, supply chain control capabilities, etc.) and external (receiver's acceptance of new channels).

Home appliance channels have undergone changes

Long boss has been doing home appliance business in Baiyun District, Guangzhou for more than ten years, witnessing changes in home appliance channels. "In the 90s of the last century, the agency system in the region was once popular, and those large national and provincial agents were very powerful. Our terminal distributors had to arrange their own vehicles to the warehouses of the agents to get goods."

By the end of the 1990s, some home appliance manufacturers began to establish marketing companies or offices around the country. While strengthening channel control, they also flattened channels, reduced sales, and controlled costs. However, the form of agency still exists and continues today, but the scope of agency control has been greatly reduced. Moreover, more and more marketing companies will directly connect with dealers.

A person responsible for sales of home appliance manufacturers told reporters that in fact, the form of agents and direct sales companies have their own advantages and disadvantages: the former is handled by almost all agents, manufacturers can save costs, but the drawbacks are the market to understand and control the lack of, therefore, replace Acting is a common thing; the latter overcomes the above shortcomings, but it is a great test for the management of the company's logistics, distribution and other aspects.

While home appliance manufacturers are trying to strengthen their control over the channels, home appliance chain companies have begun to emerge, and in the next few years, they have become the focus of domestic and domestic household appliance manufacturers in the primary and secondary markets, while those in the third and fourth-tier markets have traditional distributors. Operating mainly. "The nearest chain store is more than 20 kilometers away from us. Therefore, the passenger flow has not been reduced a lot, but the resources of the manufacturers are obviously tilted toward the store. For example, gifts, the store is 1:1, the township and township business is only 3:1." Long boss feels channel focus The impact of the transfer on him.

Channel focus shifted to the tertiary market

However, changes in the market structure have made channels renewed. In 2004, Gree evacuated some of the Gome stores because of dissatisfaction with Gome's arbitrarily lowering its air-conditioning prices. After the dispute, Gree's channels did not narrow, and its franchise has blossomed.

As the influence of nationwide chain companies continues to increase, the voice of home appliance manufacturers is increasingly being weakened in this zero-supply relationship, and high channel costs make product profits even thinner. To reduce the cost of circulation, manufacturers began to seek new ways out. Haier, Midea, TCL, and Changhong have established sales channels in the tertiary and tertiary markets through franchise operations and cooperation with retail companies.

However, only a few families have tasted the sweetness in this channel change. Some industry insiders commented that the reason why Haier, Midea, etc. have performed outstandingly in home appliances to the countryside, but also benefited from the channel basis of the 34 markets.

"Although the cost of cooperation with Gome and Suning is higher than other channels, it's definitely more heavy, especially in big cities." A salesperson of a second-line air-conditioning brand once told reporters that for building a store, it Not very anxious.

However, the cruel reality that the growth rate of the primary and secondary markets is slowing down has changed his views. Aowei Consulting's data showed that the annual sales of home air conditioners in the 3rd and 4th level of the 2011 freeze-up year increased by 66.2% year-on-year, accounting for more than 20% of the total market share, and the whole industry increased by 34.4% year-on-year. The air-conditioning industry is only a microcosm of the entire home appliance industry. What makes the weak domestic brands more embarrassing is that more and more joint-venture brands have established independent underwriting relationships with Suning or Gome, and they have undoubtedly become the main push for chain stores. This means that relatively weak brands will have a disadvantage in brand rally and store support.

Perhaps it is the realization of the above, in the past two years, more and more well-known domestic brands have stepped up the development of channels. The development efforts of Midea, Gree, and Haier continued unabated, and Galanz, Chigo, Little Swan, Changhong, Oaks and others also tried or re-entered the ranks of specialty stores.

"The United States, Haier, Gree, Hisense, many brands have lobbied me to open stores, said that there is a better policy support." For the attitude of various manufacturers, the dragon boss a little flattered.

Multiple factors constrain store development

Collective sinking channels for home appliance manufacturers, some people in the industry are concerned about whether the existing market can "feed" each store. Liu Buchen, a senior observer of home appliances, believes that opening a store is like a ticket for competition in the 3rd and 4th markets. “If home appliance manufacturers want to make a difference in the 3rd and 4th markets, they must lay out sales channels in advance.”

In the eyes of business people, the product category of the store is crucial to the development. “To open large-scale stores in the 3rd and 4th markets, product richness is a basic support point, covering coverage from Dabaidian to small household appliances, and it has become increasingly difficult for a single product to maintain its stores.” Guangdong Galanz Group Co., Ltd. Assistant President and Press Spokesman Lu Yonglie said.

"I will examine brand stores in all directions, in addition to product categories, as well as after-sales, management teams, etc." said the boss Dragon. But most he hesitated is that once the company runs the store, it is like being “tied up” by the manufacturers, including business methods and funds.

“The terminal management and business model of the store can be standardized and replicated. This is a manifestation of brand management capabilities. We need a manager-type owner who combines the development of both himself and the brand.” Lu Yonglie further disclosed: “Galanz will add 500 marketing centers and 1,000 offices in the third and fourth-tier markets to ensure that the organization sinks.” This will help manufacturers to increase their control over channels.

Liu Buchen stated: "After the stores develop to a certain stage, there will be survival of the fittest. Manufacturers with relatively weak brands need to work hard to improve product adaptability and brand image."

Luo Qingqi, a researcher in the home appliance industry and a senior director of Poller Consulting, believes: “The current problem is that companies have weak ability to control the entire supply and demand chain and manage demand, and companies cannot form a 360-degree demand awareness through supply chain management changes. To meet the closed loop, only hope that the self-built channel is likely to lead to the decline of the enterprise due to the rapid increase in costs."

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