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Distributor’s Profit Pattern Research from the Perspective of Retail Store Expansion

Author: LiLiRui
Tutor: ZhangDePeng
School: Guangdong University of Technology
Course: Business Administration
Keywords: Fast Moving Consumer Goods(FMCG) Distributor retail store profit pattern
CLC: F713.32
Type: Master's thesis
Year: 2013
Downloads: 85
Quote: 0
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Abstract


All along, FMCG distributors are the disadvantaged groups on product distribution value chain. Especially in recent years, China urbanization process drives the rapid development of retail field, therefore, the survival marketing environment of distributor is disrupted, such as channel structure, distribution order, and the price system, etc. The expansion number of retail stores in urban areas (including virtual e-commerce platform), compress the market space of distributor’s business operation. At the same time, retailers rely on the strength of the value chain to process high-frequency low-cost promotion, which disrupt distributor’s original distribution order and the price system, also transfer cost pressure to manufacturers and distributors. And more seriously, manufacturers and retailers agreed in advance to cancel distributors to change the channel of the intermediate links based on mature retail stores distribution. Admittedly, the expansion of retail stores has directly impacted the industry’s survival and development problem of the traditional distributors, and distributors become the key step of the entire value chain integration.In the new market environment, where is the new way for distributors out? Which platform can FMCG operation characteristic provide for new function distributors? How to position the distributors’ social role to involve themselves in the expansion trend of retail stores? How to choose the effective profit pattern with their own advantages? This paper analyses the marketing environment characteristic of FMCG and the leading reason why traditional distributors lose their living space from the macro and micro aspects, by using relevant theory and specific practice data, also with literature review and theory research to study actual marketing case.In the actual market competition, distributors face pressure from various aspects, this paper is studying distributor’s profit pattern from the perspective of retail store’s expansion or from the modern retail business characteristics and trends. It’s vulnerable to earn profits from cost difference in future business competition for distributors. Therefore, distributors should abandon old mindset to establish a new profit pattern to ensure long-term development. According to the specific characteristic of the industry and the development of retail business and own advantages and disadvantages, distributors can reposition their direction of development. Distributors can transfer to "channel service providers" from "distribution" for manufacturers and retailers to earn commission as profit, and they can be developed into professional category distributors to earn monopoly profits through market resources, or creat their own brand to earn profits by brand value through playing the role of manufacturers, also they can develop current distribution customers into chain stores to build up profitable retail terminal.Overall, distributor’s role won’t die out because of retail development. But in order to survive and develop, they need to fully prepare for the future to think about new value and select a new profit pattern under the new situation.

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CLC: > Economic > Trade and Economic > Domestic Trade and Economic > The circulation of commodities and the market > Sale of goods > Retail Trade
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