Direct Selling News August 5^th(Written by Ouyang Wenzhang) CDE marketing is the marketing channel of “combination of three networks” through Chain Network,Direct marketing network staff and Electronic Commerce Network.CDE marketing is the channel mode which has been upgraded and replaced by direct selling industry which has been used widely in European and American direct selling enterprises, while China’s direct selling enterprises need to reform seriously in this aspect and open a CDE marketing channel that suits China’s national conditions.

Correctly understand China direct selling “C” -style mode

China direct selling’s existing peculiar C-style mode means direct selling enterprises have alrady had their own chain networks. From the perspective of distributor to analyze the role they have played in distributor’s franchise rights and exclusive shops, the existing stores can be generalized into three business modes: First is the “pure human network” represented by Amway. All Amway’s exclusive shops have been opened by the investment of its own company which usually locates in the bustling city lots with the convenient transportation and owns unified decoration style with the clean and tidy environment. Second is the “pure shop network” mode represented by AVON. AVON has four kinds of stores which are concept store, model store, flagship store and common joining store, while concept store has been managed by Avon directly. Third is the “shop network and human network” mode represented by Tiens. During product’s selling and service, Tiens  has pushed shop network and human network almost at the same time which shows its unique value in double channel collateral system. Center on these three business modes, China-style direct selling management can have a reference basis and a comparison for development, many Chinese distributors have proceed the necessary value innovation on this basis.

Using procedures to realize standardization, using standardization to realize replicability is the core thought of chain strategy. Based on this knowledge, many Chinese direct selling enterprises have taken the chain as their development strategy, thus formed China-style direct selling mode. As a direct distributor to join exclusive shop which has many differences with the traditional industry: usually direct distributors open shops after being engaged in direct selling business for a certain time, so they have deeper knowledge about the company and business development, relatively speaking, the investment risk is smaller; While the operation of exclusive shop mainly depends on the strength of the team, the guidance of upper teachers and sales performance maintained by team partners; besides, the functions of the exclusive shop are relatively more which include products exhibition, personnel communication, training base, product sales and so on.

So if the distributor wants to open and manage a shop, only deeply understand the value on the development of chain management and comprehend the nature of chain management can effectively implement chain management in the specific business practice, so take the chain management as the important strategy for the development of organization can produce huge impetus for sales.

Direct selling should take E-style road

E-Commerce, simply speaking, is a kind of modern business method to realize business through internet electronic technology way. In fact, there is a direct relationship between the development of direct selling and the development of computer software and hardware technology. Therefore, China direct selling should take E-style road step by step.

—— The complementary advantage for the combination of direct selling and E-Commerce. There are many similar places between direct selling and E-Commerce on enterprise’s development, while in China, the dynamic combination of direct selling and E-commerce can bring new opportunity for these two industries. First is the complementation of market resource. Many E-Commerce lack of effective combination with market resource, direct selling has already accumulated plenty of market resource, if these can be used effectively, it will quickly promote the setting down of E-Commerce. Second is the complementation of marketing tools. E-commerce owns the most advanced marketing tool in the world—Internet, which has been used to gradually develop the database of internet platform and kinds of business application software, this is the advantage of E-Commerce, direct selling industry can proceed the inter-enterprise service with the help of these tools and complete distribution and after-sales service quickly and effectively by cooperating with E-commerce. Third is the complementation of service tools. The service tool of E-Commerce mainly adopt the individualized service of electronics , while direct selling more often proceeds with the application personnel and various medium, the marketing or service tools such as enthusiastic sales of direct selling, passionate marketing are the effective complementation of electronics service of E-Commerce.

Fourth is the complementation of distribution methods. The long-term formed distribution team and distribution methods from direct selling can help solve the distribution problem of E-Commerce effectively, while the database management mode has been applied in distribution management by E-Commerce can benefit the long-term development of direct selling enterprises.

—— E-Commerce brings change for direct selling industry. Firstly, the structure of involved personnel has changed. From the case of the newly organized “ New style E-Commerce” American direct selling enterprise has operated successfully in a very short time, it’s not hard to find that “high-end” people who is the last one to accept direct selling originally now has been after it successively, some even are afraid of losing the new chance to strive for time, health and financial freedom because of their momentary misjudgment. Secondly, marketing pattern has changed. Thirdly, marketing concept of no factory just build pipeline has changed. With the development of E-Commerce which will inevitably produce a batch of direct selling enterprises with the concept of “Pipeline is the king”, so if the traditional direct selling enterprises do not graft E-Commerce, it will be abandoned by market.

—— The combination of direct selling and E-Commerce B2C conforms to the future marketing development direction. Mainly reflects in following: Firstly, in accordance with the transformational direction from marketing to service. Direct selling keeps the good relationship with target customers through the relative direct selling way and develops in the direction of specialized service before or after-sales service.; While the core concept of E-Commerce is to proceed the directly contact with customers via Internet or other electronic media, no matter before-sales service or after-sales service, both can keep direct communication with customers through electronic platform and conduct professional service.The important indicators for the development of future marketing industry should be smooth,convenient and professional to acquire the channel of service and communication. Secondly, in accordance with the development of personalized service. After proceeding the further subdivision of market,direct selling pays more attention on the service and marketing appeal according to different customers,while E-Commerce serves as the spokesman of personalized service that customer’s demand can be known by enterprise more effectively and completely.The degree of personalized service is the important mark about the maturity of direct selling and E-Commerce two industries. Thirdly, in accordance with the virtualization development of enterprise. The prime asset of direct selling enterprise lies in keeping a good relationship with numerous customers,and the core competitiveness of enterprise lies in the constant improvement of means and ability to establish a good relationship with customers. E-Commerce enterprise does not set up substantial sales store,just through electronic method to build, extend and maintain customer relationship,the core competitiveness of its enterprise also lies in the constant improvement of means and ability to establish a good relationship with customers.

The combination of direct selling “D” network with “C” network and “E” network.

“D”network is direct marketing network staff,also calls direct selling contacts network.Human is the most revolutionary and energetic in productivity,thus direct selling network cannot do without personnel. But,if only relies on personnel network, direct selling is original obviously and cannot reflect the feature of modern economy.Therefore,direct selling “D” network should combine closely with “C” network (China network) and “E” network(Electronic Commerce Network) and formed a state of “three networks combined one”. This is the direction of China direct selling characteristic.

Following, we will analyze the “three networks combined one” conditions of a current foreign direct selling enterprise.The chain platform of this direct selling enterprise is E-Commerce sales mode,it has chosen the market operation mode of“interactive marketing” which is the most advanced integrating interactive marketing mode in today’s world. “Interactive marketing” is developed and formed based on a set of modern marketing theory and the advanced marketing means.The theoretical foundation of implementing “Interactive marketing” are: First, market profit is co-created by operator and consumer. They think today’s market is buyer market, the orientation of market profit depends on the consumer’s consumption intention, only through the interaction between merchant and consumer can produce and form profit. Second, using the way of “accumulated consumption reward” to stimulate consumer’s consumption intention with the purpose of reaching consuming behavior to target consumers. Third, through “accumulated wholesale system” to stimulate distributor’s operation behavior and the enthusiasm for market development. Fourth, to target and expand consumer group on the basis of interactive interest and all-round service and cultivate customer’s loyalty. Fifth,based on consumer market, using internet as the connection platform to deal with information, taking the franchised chain store as the terminal of logistic distribution service, making human resources sales system as the sales subject,to establish a modernization access market basing on people-oriented,basing on market-oriented, using internet as a tool and taking the franchised chain store as the sales service terminal.

Their interactive marketing structure is to build up a network market with the integration of consumption,sales and service based on consumer market through this “three networks combined one” which includes “information interconnection network”,”store-level service network” and “interpersonal consumption network”.

This is the” interactive marketing”sales mode which adopted by above direct selling enterprise.The entire market structure of” interactive marketing” has been connected through internet with management center,logistic distribution sales service system and consumer group. Management center is comprised by following:

①Information processing center-- information flow management;②Distribution and supply service center--logistics distribution management;③Cash accounting processing center--fund flow management;④Human resources development and management center--human resources management. Logistics access is comprised by following: ① Production distribution and supply center-- factory,company(headquarters); ② Regional distribution and supply management and service center-- regional agent(or branch company);③ Logistics distribution service station-- franchised joining stores. Consumer market is comprised by following:  ① Professional sales and service personnel; ②The repeated consumer customers who are developed and served by professional sales and service personnel under franchised joining stores.

Through the above analysis, we can see that direct selling “D” network should combine effectively with “C” network and “E” network to realize the advantage complementation among these three networks,thus can help China direct selling acquire regular development under the conditions of market-oriented economy.

editor：Jack