Industry Reading: The Expanding Philosophy of the Three-line Market

Bird listens to consumers' hearts

The terminal expansion of the elegant bird in 2010 was defined as the “nest building” operation, which shows that the scale expansion of the noble bird spreads out.

In more regional markets, or entering new markets, “building nests”, to gain a foothold, scale, and seize a certain market share, the “bird nesting” action of the elegant bird is similar to many of the clothing brands that are currently expanding – - A large number of branch stores, three or four line target markets, and big store strategies.

What is different is that the elegant bird “had some action” in 2010 achieved an enviable sales return, and the doubling sales growth so far showed that the bird’s bird expansion strategy is correct and the entire expansion plan is well implemented. .

This to a certain extent benefited from the appropriate agency policy of noble birds. Specifically, the noble birds do a good job in collaborative management with the franchisees.

Support in place

For the summary of market expansion in 2010, the most successful case that can prove the efficiency of noble bird expansion comes from Zhejiang. An agent in Zhejiang opened 11 stores within one week of August this year.

The enthusiasm of the expansion of the dealers shows that the expensive bird shops are profitable and that the noble bird company's specific support plan is feasible.

In the company's strategy of overall expansion, the elegant bird has provided a series of subsidies and support policies for the agents and dealers, and it is these policies that have matched the overall market strategy of the noble bird and stimulated the enthusiasm of the dealers to follow the expansion.

For example, Guiren Bird provided a comprehensive and detailed subsidy policy in 2010, including terminal expenses for image promotion, rent subsidies for opening shops, and product support. At the macro level, Guiren Bird launched a nationwide advertising campaign that was costly, which increased the market confidence of agents. At the micro level, the noble bird even considers the problem of insufficient funds at the time of the expansion of the second-tier distributors, and has specifically introduced support policies for advancement of funds.

Among these, the most typical is the support of an elegant bird dealer in Luzhou City, Jiangxi Province.

Due to the thorough and detailed investigation of the market in Zhangzhou, Guiren Bird has determined that there is sufficient expansion and profit margin in the local market. At the same time, the fact that competitors such as 361 Degrees began to get involved in exploring this market also makes noblebirds feel that it is necessary to carry out bigger actions. Therefore, after consultation with its Jiangxi agents, the elegant bird believed that it is necessary to open a video store on a major commercial street in Zhangzhou to radiate the surrounding market and drive the development of markets at the next and next level, such as the county level market. The soon-to-come competitors have seized the opportunity to deploy Jiangxi.

After cost accounting, this small area of ​​the image of the shop rent requires a monthly cost of 1 million yuan, which exceeds the strength of local dealers in Luzhou. At the same time, the dealers in Luzhou have set up this company due to lack of funds. The image store also lacks confidence. It is difficult to recover costs even if the new store is opened.

This kind of indecisiveness, in the absence of an overall expansion strategy and a specific implementation plan for the company, is likely to be delayed “indefinitely” and then “repressed” by competitors. However, the elegant birds avoid this kind of thing from happening.

After several times of communication and cooperation with Jiangxi agents, Guiren Bird firmly established the strategic significance of the market significance and overall layout of the establishment of image stores in this region. The Jiangxi agent also saw the profitability of this image store under the “help” of the elegant bird. In the end, this image store was successfully opened. Jiangxi Birds, an elegant bird, first paid 1 million yuan to rent shops, and “borrowed money” to dealers in Zhangzhou. In this process, the support of the noble bird encouraged the advancement of Jiangxi agents and the “regained confidence” of the Luzhou dealers played a key role.

At present, the opening of Zhangzhou Image Store proves the correctness of the previous market research of Guiren Bird and its Jiangxi agents. In just a few months, the shop's cost was recovered.

Third-tier market layout

Whether or not an agent can successfully and effectively stimulate the brand is the key to whether or not the expanding brand can effectively expand its market. Because if the incentive is not in place, expansion strategies based on agents will not be implemented, which in turn will cause the brand to lag behind its expanding competitors and then have to pay higher expansion costs.

The retail terminal expansion plan so far has been successful. Hundreds of new store openings indicate that the agents recognize their current market strategy and provide profitable space.

In general, agent dealers do not "strongly" develop a single-brand retail terminal as a brand merchant. The agency dealers who bear the main development costs are more in need of profit return. Therefore, in the process of expansion, there is always disagreement between agent dealers and brand dealers.

The terminal expansion of the noble bird has obvious effect. Starting from 2002, it only took 8 years to realize the scale of 5,000 retail stores because it can guarantee the profit return of most of the agency dealers.

According to the information provided to this reporter by an elegant bird, the main trend of the expansion of the elegant bird has so far been that most of the dealers are profitable.

Wang Zhidong, an elegant bird brand manager, said: "There will be some dealers who are not profitable or even losing money, but the overall situation is not obvious. So far, the profit rate of our single store is still good."

In this regard, Wang Zhidong's explanation is that the precise selection of the target market provides the profitability of the dealership and the expansion of the brand.

“For example, this year, most of our new stores are located in the central regions of Guangxi and Yunnan, and they mainly serve the third and fourth-tier markets. In these markets, the cost of opening stores is not high, and the market space is relatively large.” Wang Zhidong said, “At the same time, The major competitors are all in the development period. Our expansionary pressure is small, and profits are easily guaranteed."

With force in the third and fourth line markets, with the national brand “famous”, the market expansion of noblebirds is relatively smooth, and agency dealers in the third and fourth line market are more likely to bear the cost of development, and they are also more optimistic about the market potential of these national brands.

“In addition to the series of support policies of Guiren Bird, the unified and effective management of chain stores, such as the opening of new stores, has detailed market research and clear subsidy fee standards. Therefore, in this kind of market, we have grown very fast. Sales have achieved doubling growth, said Wang Zhidong.