What is the general process of complete purchase?

Preparations for suppliers to enter the store

Diary of Purchasing Manager: (This is a fixed module)

June, sunny

The National Day holiday has finally passed. Although it was a holiday, I still felt very tired because I chose a long trip. However, when I saw my boss's stern eyes, I knew I had to hurry, but a supplier I met today left a deep impression on me. This supplier has made an appointment with eleven manufacturers. This is a new supplier. They represent a foreign coffee brand and hope to enter our supermarket for cooperation. For me, of course, I want to see if the product is what we need first. I remember very clearly that the supplier representative arrived on time, and my eyes lit up. This is a very beautiful and elegant lady, but after so many years of purchasing experience, I vaguely feel some problems, because the cooperation of zero supply is actually a very complicated process, and no one will feel relaxed. So in my experience, rigorous and down-to-earth salespeople are often good negotiating partners. Of course it's beautiful. There's nothing wrong with it.

After so many years of procurement negotiations, I have seen the ups and downs of many suppliers. Every year, many new faces appear and many old faces disappear. We talked about this problem when we were shopping together the other day. We all have the same feeling, that is, the number of products provided by domestic suppliers is far greater than the demand of supermarkets, and the shelf space of supermarkets is too small relative to products, so we can dispose of some goods in procurement without stint and introduce new goods and suppliers calmly. But I also know that in order to better meet the changes in consumer demand, suppliers must constantly introduce new products, and suppliers who have mastered some distinctive products hope to enter more channels to expand the sales scale and make themselves grow rapidly. There is no doubt that some large supermarket chains have great driving force for rapid development, so we always have to face new products and suppliers. But there is no doubt that this is very beneficial to our work.

Moreover, suppliers have a fatal weakness compared with retailers, which is the asymmetry of understanding data information. Retailers can easily get all kinds of sales data from POS machines, and with a little effort, they can get data analysis results from various angles. These data analysis reports are very useful for us to analyze categories and suppliers. As well as the daily negotiation work, are all useful tools. Obviously, it is difficult for suppliers to obtain the same data information, especially category information. And these categories of information are actually consumer demand information. It is easy to know that the market of Baojiu dairy products is declining, the sales of frozen foods are also declining, and condiment products tend to be low-priced. Of course, this is also an important basis for us to choose new products and suppliers.

Let's go back to that beautiful woman. Her looks and temperament really match the products she represents. This is my first feeling after seeing the sample she brought. The packaging of the products is very unique, and the price she quoted me was the lowest among the imported goods in her category. There seems to be nothing wrong. However, yesterday, I pulled out the data of coffee category and analyzed it, which gave me a feeling of pessimism. Her product is a kind of coffee made in a special way, which is far from being understood and tried by consumers in China. In our supermarket, it belongs to an independent category, of course, it belongs to the big category of coffee. This subclass faces several serious threats. First, its turnover only accounts for less than 1‰ of the total coffee classification turnover, so its gross profit for supermarkets is very small. Its only function is to fill the vacancy of supermarket coffee category and meet the demand of very few customers, which is not fixed. I am well aware that this coffee consumption habit has not yet formed in China. The second threat is that there are about 10 SKUs in this sketch category, and the sales volume has been very stable, because most of them come from several major coffee manufacturers, so I don't need to exchange them at all. After all, the cost of changing goods and suppliers is high.

When I told her these questions, she didn't think so. She has always stressed that it is cheap and purely imported. However, I also told her about the opportunity of this small class. First, the competitiveness of this category is weak. Because it is a sketch category, many big coffee manufacturers don't care very much, that is to say, they won't invest more resources in this category of products, so if they invest resources in this sketch category, they will easily become category leaders. Secondly, the average Mao Lijiao of this category is very high. Because there is no fierce competition, there has been no price war in this category, which keeps this category with a high gross profit. Therefore, supermarkets still hope to make this category bigger, thus enhancing the gross profit of supermarkets. Of course, she was very happy after hearing this and thought there was no problem entering the store. After all, my supermarket is one of the best in China.

But then I let her down. I told her that we really want this small category to become bigger. When it grows bigger, it may compete for the share of other coffee sub-categories, such as instant coffee, charcoal coffee and mocha coffee. However, because it has the highest average gross profit among all coffee subcategories, it is hoped by supermarkets. But the problem is that if we want to make a big classification instead of a brand, we need a higher level of deep cooperation between suppliers and retailers. That is to say, as a supplier, we must have the strategy and ability to make a big classification, and retailers can provide corresponding support such as promotion, cost reduction and better display, which takes some time to accumulate. At this time, she told me that they really didn't want to make this category bigger. They don't do this strategy, but she said she could consider it. However, I told her one thing very bluntly, and another problem is not easy to solve, that is, the ability of enterprises to make a classification bigger. In fact, I feel in my heart that she really doesn't have the ability, experience and knowledge to make a big class. It is very risky for the supermarket to introduce her products, which will have a greater impact on her, because the result after entering the store may be to lose money and leave.

Finally, she also mentioned that she has a professional dealer, which can guarantee a stable supply of goods. I also know the dealer she mentioned. This wholesaler has indeed cooperated with our supermarket for many years, but she doesn't know that the most critical value that the wholesaler brings to the supermarket is to combine the products that the supermarket needs. If supermarkets don't need a product, but use relationships to force them into the store, it is obvious that supermarkets and wholesalers will eventually lose money because of poor sales, and manufacturers will certainly not. So in the end, I didn't let this beautiful lady's coffee into the store.

Expert comment: (This is a fixed module)

(or "auxiliary communication viewpoint", "auxiliary communication analysis" and so on. Of course, this is better. Please consider if you can launch the company in time! )

After years of wind and rain cooperation, suppliers have also accumulated a lot of cooperation experience and experience. However, the improvement of these capabilities of suppliers has not improved the domestic cooperation, and there is a trend of further deterioration. Of course, this is not only a problem of suppliers, but also a very important reason for the low management level, insufficient capacity and irregular management of domestic retail enterprises. However, this is not the responsibility of the supplier. It requires the retail industry to continuously improve its management level, and through competition, it also requires the relevant state departments to coordinate and manage the cooperative relationship between suppliers. For example, the Ministry of Commerce recently prepared to issue industry standards for retailers and suppliers. I received some suggestions from the supply and demand committee. Of course, the specification has been widely consulted by suppliers and experts. The core of this standard is aimed at some irregular business behaviors in the retail industry, which are actually the direct result of the lack of management ability of some retail enterprises.

Due to the accumulation of years of cooperation experience of suppliers, it is no longer a key issue for suppliers to make preparations for entering the store, such as making an appointment in advance, bringing samples and materials, formulating negotiation strategies, and preparing various documents needed by supermarkets. Still have to return to the essence of entering the store and let the two sides cooperate to do business. The purpose is, of course, to make money for both sides. Therefore, the key issues that suppliers should consider when entering the store are whether they can make money after entering the store, how to make money after entering the store, and why do they have to look around for relationships and rush into the store when they find that they can't make money after entering the store? This kind of behavior does not belong to commercial behavior. Therefore, the problem faced by suppliers in the preparation of opening a store is how to prepare themselves to make money in cooperation, which is of course a deeper consideration in the preparation of opening a store.

When chatting with a friend who is a marketing director the other day, he said that they have been in the Shanghai market for nearly a year, and other supermarkets have already entered the store, but they have not yet entered Carrefour. Everyone knows that Carrefour still carries a lot of weight in the Shanghai market. He told me that he didn't enter Carrefour not because he couldn't, but because they hadn't taken it into account. Of course, I will ask him why. He said that the main reason was that their sales organization and personnel were not ready. The current sales organization cannot support the cooperation with Carrefour. If we cooperate rashly, we will definitely suffer. Moreover, its logistics distribution in Shanghai is not mature, so it is a bit difficult to deliver goods now. His plan is to contact Carrefour after adjusting the sales organization and logistics. In fact, this is a very clever and correct approach, and it is an out-and-out commercial behavior. Marketing director is not only a professional manager, but also an excellent businessman.

Therefore, according to different retail enterprises, it is the basic work to formulate different strategies for entering stores and make good preparations for organization and logistics, which is also the preparation for supplier management ability. The management mode and ability of each supermarket are different, and suppliers must consider whether their management ability can match different retailers. For example, Hualian Jimaisheng in Shanghai, although its single store sales are not the best, but because of its simple internal management and low entry threshold, many suppliers have achieved good results in cooperation with it, and more promotional activities in the store have effectively promoted sales growth.

After the preparation of the above organizational ability, there are two very important and professional preparations, namely category analysis and channel value analysis, which are also wonderful descriptions of cases recorded in the purchasing manager's diary.

First look at category analysis. A partner of the author once gave a brand-new definition of category: a category is a complete market. Any category represents a complete market segment, for example, shampoo category represents a shampoo market, and a category reflects the most basic customer needs, such as soy sauce classification, representing the customer's demand for soy sauce. Since it is a market, there must be customer needs, competitors, prices, various products, various promotional advertisements, and of course various channels. If you define categories in this way, it is easy to understand category management. In this way, suppliers can jump out of the thinking limitations of their own products and brands, not only in the process of entering the store, but also in fact, the whole marketing activity can analyze the product category first.

For example, analyzing the change of consumer demand represents the change of a certain category, not the change of a certain brand, and a certain product is of course influenced by the trend of its category change; For example, in the process of entering the store, if it is found that the average gross profit margin of this category is relatively low after category analysis, then new products and new suppliers are not suitable for entering, and it is also difficult to enter, because the low gross profit margin of the category is definitely the result of the price war of the category. There must be many brands in this category, occupying various opportunities of the category, so it is difficult to succeed in new products, and of course, as a supermarket, they are unwilling to launch; For another example, if the overall market of a certain category is growing, then retailers will definitely want to introduce more products to adapt to the growth of that category. For a shrinking category, retailers will certainly clear the goods and save shelf space for the growing category. If suppliers go through such analysis, they will certainly be more fully prepared when they enter the store. This preparation is often at a higher level, such as product research and development, channel strategy and so on.

Then we will look at what is channel value. A few months ago, a friend who works as a marketing manager in a foreign consumer goods enterprise told me an idea. He told me that as manufacturers, we should consider creating two values at the same time, that is, creating consumer value and creating channel value. Many manufacturers are no strangers to creating consumer value. After all, these years' marketing practice has made us deeply understand what customer orientation is. The promotion of brand management ability and the emphasis on advertising and other media are also concrete actions for manufacturers to create customer value. However, the creation of channel value is not as widely understood and applied as the creation of consumer value. This is due to the insufficient capacity of traditional channels, which makes channel members become vassals of manufacturers, and naturally makes manufacturers often ignore creating value for them. However, with the development of modern retail industry, the ability of retail terminals has become very powerful overnight, which has exceeded the ability of manufacturers. Therefore, the creation of channel value should attract more attention from manufacturers, especially for retailers.

Obviously, the core of creating value in supermarkets is to create gross profit, not profit. The most direct value created by suppliers to retailers is the gross profit of goods (including various expenses and rebates, etc. ), and the final profit depends on the retailer's own cost control ability, and has nothing to do with the supplier. Of course, for some enterprises like Procter & Gamble and Coca-Cola, it is possible to help retailers reduce costs through ECR or joint business plans, but it is difficult for most manufacturers to do so. Therefore, if the supplier's products can bring gross profit to the supermarket, the supermarket will certainly accept it. For suppliers, this is actually the most critical preparation for entering the store. If your product can't bring gross profit to the supermarket, why should the supermarket consider letting it into the store? But don't ignore that the gross profit of goods is not the only value of retailers. In fact, the gross profit brought by goods is only the core value. In fact, many suppliers' products can provide a vacancy for supermarkets in their categories, which will certainly be welcomed by retailers. For example, supermarkets now need more low-priced goods in condiment classification, that is, customers tend to choose low prices when choosing daily necessities. If manufacturers can provide more low-priced products, it will be easy to knock on the door of retailers. This is to create value for retailers, and such cooperation can truly achieve win-win and lasting.

Therefore, the supplier's preparation for entering the store is a very complicated strategic issue. No supplier should act rashly. First of all, we should be prepared for organizational ability, and then deeply analyze the trend, gross profit level, opportunities and threats of its categories, and consider how to create unique value for retailers. Of course, if suppliers can make the above preparations, they must have strong data analysis ability, at least preliminary data analysis, which is actually the first step for suppliers to enhance their competitiveness.

Value sharing: (This is a fixed module)

In fact, we have constantly summed up many new concepts and methods, and I want to emphasize them here. In fact, this is of great benefit to suppliers, and this sentence may have a great shock to them. This sentence is actually the finishing touch to the above article, of course, I think so myself. Then there will be such a prompt in each issue, and this title is also the translation of the English name of our company: Valuepool)

First, a category is a complete market.

Second, manufacturers must create two values at the same time: consumer value and channel value.