What is the significance of channel flattening? Why did Canon enter the China market in the first place? (From Unit 7)

Flattening, as the name implies, means that the coverage of products and customers is wider and the contact efficiency is higher. Therefore, flattening channels means reducing intermediate links between products and consumers and realizing direct contact between products and consumers, which is a better channel organization form in the early stage of entering the market. However, multi-layer links increase the final selling price of products, reduce the transparency of channel organization and the efficiency of information transmission, and increase the possibility of channel conflict. Due to the continuous maturity and growth of manufacturers and distributors, many modern enterprises have shortened the channel level. The flattening trend of this channel model is obvious in China IT industry.

Canon entered the China market in this way because the channel system of the early electronic equipment market in China was chaotic and there were too many levels. Borrowing these mature channels will cause excessive channel costs, increase the sales price of products, and finally slow down their entry into the market. In the early China market, there was no special channel for electronic digital products. It is better to flatten the channel and guide the operation by yourself. Will form a greater thrust on the promotion of the market! On the one hand, the flattening of Canon's channels has enabled Canon to strengthen the monitoring of middlemen and avoid vicious competition caused by price chaos; On the other hand, Canon can establish an after-sales service network to benefit dealers and consumers, improve brand loyalty, and narrow the distance between manufacturers and terminal consumption, thus laying the foundation for Canon to carry out large-scale direct sales in the future.