Cut: products are eliminated without competitiveness
In Beijing, in addition to professional large-scale furniture stores and specialty stores, Yaobang furniture products can also be bought at Fomeole, known as "Home Outlets", but only all of Yaobang's "Famous Generation" series are sold here Products, this series was sold to Fomele by Yaobang at a price equivalent to "dismantling wooden boats into boards".
Low-cost dumping like this has happened many times in Yaobang, but it is not a rage or a desperation, but a planned cut off. In the words of Leng Yue, the general manager of the furniture business department of Yaobang Group, "Who makes Yaobang actively 'slimming'? Since we want to 'slim', we have to start with the huge product series accumulated over the past ten years or so."
As a factory veteran who was established in the early 1980s, from manufacturing process, material application to market promotion, Yaobang Furniture's product scale is indeed unmatched. Elegant and refined "famous" series, fashionable classic "source innovation" series, pure European and American pastoral "European and American style" series, full-fledged "vine wood style" series, glorious and luxurious "Louis family" series, naturalistic "Life Elements" series ...... From plate type to solid wood, from European classical to modern Korean style, every time you participate in industry exhibitions, you will take the opportunity to launch one or two new series of products.
This also overwhelmed Yaobang. "There are many product series, and the market changes too fast. The company's internal management can't keep up, the agents can't keep up, and other human and material resources can't keep up." Leng Yue emphasized that the most important thing is that some brand series have happened because of the market. Changes are no longer in line with consumers' tastes and basically have no profitability, but have dragged the company's back. To this end, at the time of the international financial crisis, Yaobang decided to slow down, screen out existing products, eliminate uncompetitive products, and refine the remaining products. "We cut off 6 of the 16 brand series, and only 10 are left."
The “Mingmen Generation†whose inventory is all “buy out†is the product that Yaobang cut off. In view of the fact that “Mingmen†has been well known to many old customers, Yaobang has developed the second-generation products on the basis of retaining the “Mingmen†brand. According to reports, the second generation of Mingmen mainly uses white light as the base color, combined with light khaki, the overall color is clean and capable, and a wave of young nobles has emerged.
Off: The store is closed without prospect
In addition to the product structure in the "downsizing" campaign, Yaobang has also begun to lighten its burden on channels, such as helping dealers close promising stores. By October of this year, the number of Yaobang stores nationwide has decreased from more than 1,200 to more than 800, of which Beijing only has 9 stores in Red Star Macalline, Jimei, and Longfeng House.
What is a promising store? Leng Yue explained that it is still making money but not optimistic about its future stores. "There is a major reason for the poor prospects of these stores, that is, we are worried that our dealers may not be able to carry it, and some dealers have too much burden on their shoulders." Leng Yue said that in the past few years, in order to quickly expand influence, occupy With a larger market share, Yaobang is somewhat lax in the management of dealers. Basically, dealers give whatever series they want, even if they have the distribution rights of 3 series brands in their hands at the same time, which does not interfere, which makes some appetites. Dealers who are large but not strong have suffered.
With the acceleration of the urbanization process and the increase in regional consumption trends, dealers must open several specialty stores in a city in order to make economies of scale. Based on the calculation of at least one specialty store for a brand and the investment of at least 500,000 yuan for each specialty store, it is necessary to invest 1.5 million yuan for each of the three brands to open one store, and tens of millions for each brand to open a few more stores Yuan ’s funds, the average dealer does not have this strength at all. It can only open a store in a series, and cannot penetrate the market. In the long run, their enthusiasm and loyalty to Yaobang gradually fades, and the overall performance of Yaobang furniture Development is extremely unfavorable.
Therefore, when formulating the 2010 development strategy at the end of 2009, Yaobang was determined to shut down some dealers' "out of stock" stores, and at the same time establish a new franchise agency mechanism-"one city, one product, multiple stores", namely A dealer in a city can only be a brand agent, but can open multiple stores for this brand. "This strategic adjustment has achieved very good results. Now as long as our dealers hear that there is a shopping mall, they immediately go to the shop. Once a shop is successful, quickly copy the second, third, and fourth. The highest record is an agent. The merchant has opened 8 stores for one brand and also solved the inventory pressure. "Leng Yue revealed that if 10 brands are made at the same time, there are 2,000 products, and each product has an inventory of 2,000, if it is made exclusively Brand, inventory is much less.
Do: Provide good brands and good products
Actively closing stores and eliminating products. Although these actions are time-consuming and "blood-sucking" in the outside world, in Lengyue's view, they are just a turning point that companies must slow down after years of rapid development. After passing the turning point, the enterprise's future will be better.
"With years of brand and scale effects, competition between Yaobang and other factories is no longer a problem. How to meet the needs of consumers is the big problem. After all, the era of mass production has passed, and the current market demand is to do fine and fine. Consumers prefer to see the sincerity hidden behind the products. â€Whether it ’s rural consumers in third-tier areas or white-collar workers in first- and second-tier cities, Lengyue thinks that they are not stupid and unconventional. The products are good or bad, they We all have a steelyard in our minds, so Yaobang needs to make products and build a brand.
Leng Yue said that Yaobang will definitely not use some inferior materials to challenge consumers' IQ and eyes, and will not sacrifice the quality it deserves only for the price. In order to maintain the popularity and spread of the brand, Yaobang Furniture has also worked hard on advertising and marketing. For example, the TV series "Big Girl Should Get Married" sponsored by Yaobang Group was heavily broadcast on CCTV-8 in April this year. All family scenes appearing in the play are made of Yaobang furniture.
In addition, Yaobang Furniture also entered the community to carry out peer-to-peer marketing. When distributing flyers, make sure to get effective information from the owners, including whether there is furniture demand, and if so, an invitation letter will be sent immediately. "In the past, we found that if 1,000 flyers were distributed, only 300 feedbacks might be obtained. Now, through this peer-to-peer way of sending invitation letters, the return rate can reach almost 80%, which is very accurate." Yue Xiaolu complacent. Yaobang in his mind, after doing the "slimming" exercise, will grab a bigger market cake with a louder brand and a more unique product, and interpret a more exciting story.
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