Transformation Of Shoe Enterprises For Domestic Sales&Nbsp; How To Change From OEM To OBM?

On December 10, OEM (Original Equipment Manufacture) refers to the original equipment manufacturer, and OBM (Original Brand Manufacture) refers to the original equipment manufacturer brand manufacturer. "Fusion" originally refers to a nuclear reaction in physics in which lighter nuclei (deuterium and tritium) combine into heavier nuclei (helium), which is an essential change of matter rather than a simple combination change. The word "fusion" here means Shoe enterprise The transformation from OEM to OBM is not a simple change, but an essential change. I once told a family a shoe factory The boss of OBM said that if OEM is a worker, OBM is a businessman.

It is generally believed that OEM is the OEM for export and OBM for domestic sales. In fact, this understanding is wrong. Under the specific national conditions of China, the competitive advantage of enterprises is cheap labor, so it is inevitable to choose OEM for foreign brands at the beginning. With the rise of domestic brands, many enterprises have OEM for domestic brands, but they are essentially sold domestically; OBM does not necessarily focus on domestic sales. With the growing strength of domestic brands, you will find that OBM is slowly going out of the country and starting to export. However, domestic shoe enterprises have not done well in this regard, but color TV sets, cars, household appliances, etc. have actually been exported for a long time and are very mature. So to be precise, it should be OEM for export and OBM for domestic sales. Let's call them export and domestic sales for short.

We don't need to use too much words to describe why shoe enterprises need to transform from export to domestic sales, nor need to discuss whether shoe enterprises can transform from export to domestic sales. We just look at the current living conditions of export and the increasingly bad export environment, as well as the changes in the domestic processing environment, such as the continued appreciation of the RMB, the increase of workers' wages and production costs, "Made in China" It has gradually lost its original price advantage and will be replaced by other new manufacturing countries. What about export sales? Unless you stop doing this, you will be eliminated if you don't take the domestic sales route.

However, looking at the domestic market in recent years, the transformation of export shoe enterprises to domestic sales has been successful, but most of them ended in failure. What is the reason for these export enterprises to wrestle on their own doorstep?

Mistaken Ideas of Transferring Export Sales to Domestic Sales

1、 Mode error. The primary reason for enterprises in transition to be in trouble is to simply follow the export method and follow the marketing model of the existing industry and simply put the exported shoes into the domestic market. The domestic market can be described as the most complex market in the world. There are five different market environments and business types, from megacities and provincial capital cities to prefecture level cities, counties and towns. If you follow others' marketing models carelessly, you will inevitably fall into a dilemma.

2、 Strategic mistakes. Strategically, enterprises are outside

After selling to domestic market, it did not re-establish its competitive advantage and ability. The core competitiveness of export enterprises lies in manufacturing and stability, rapid reaction ability, quality management ability, production cost advantage and relationship management of key customers. After the transfer from export to domestic sales, enterprises need to establish a comprehensive market competitiveness with consumers as the focus.

3、 Train of thought. They did not abandon the idea of export sales, and did not develop the domestic market in the mode of domestic sales. Domestic sales require basic market investment and cultivation period, and the return on investment period is relatively long. Relatively, enterprises should make corresponding adjustments in marketing organization, management, production plan, finance, etc.

4、 Lack of talents. For enterprises engaged in domestic sales, the first consideration is to hire professional managers from benchmarking enterprises or multinational enterprises to set up marketing departments. Domestic sales is a battle to seize the city rather than defend the city. What is needed is elites who can start a new business together with the decision-makers, not just managers who continue the success stories of others. Managers' cultural differences, concept differences, values differences, etc., will cause enterprises to give up domestic sales halfway.

For enterprises, the transition from export sales to domestic sales is not simply a process of opening up the domestic market, but actually a process of strategic positioning transformation, reengineering and upgrading, and entrepreneurship; It is the upgrading of the enterprise's position in the global industrial chain, and the transformation from the processing workshop to the brand provider and even the industrial chain manager; It is the process from no brand to self created brand; It is the fundamental transformation of the enterprise's business model, profit model, control and operation model; It is the transformation of enterprises from the operation mode of big customers and trade to the systematic and refined marketing mode; It is the transformation of the core competence of the enterprise from processing advantage, cost advantage, productivity advantage, quality advantage, technical advantage, etc. to brand advantage, marketing advantage, R&D advantage. In the final analysis, it is the comprehensive transformation and upgrading of enterprise strategy, mode and marketing. {page_break}

The essential difference between export and domestic sales

First, the target customer groups are different. Export sales are targeted at key customers, belonging to B2B; Domestic sales are aimed at end customers, belonging to B2C.

Second, the growth mode is different. Export sales can expand rapidly; Domestic sales need to be stabilized and gradually increased.

Third, the operation mode is different. Export sales are very volatile. If others don't let you process, you have to find another job, which is passive; The domestic market has its own brand, which has strong control, and the processing factory can be changed.

Fourth, the product lines are different. The product line for export cannot be extended; Domestic sales can be extended to related products, which is theoretically unlimited.

Fifth, the market investment is different. No publicity investment is required for export; Domestic sales require a large amount of brand promotion and marketing costs.

Sixth, the integration of resources is different. Export needs to integrate the upstream resources of the industrial chain, mainly by investing in production equipment and important customer relations (including government relations) as the main way to generate value; Domestic sales need to integrate the downstream resources of the industrial chain to invest in the value generation model of "brand+channel+sales organization".

In short, export sales and domestic sales are two different steps in the industrial chain. The former is mainly production, while the latter is mainly marketing. The biggest difference between the two is the profit space. The former only accounts for less than 10% of the latter.

Disadvantages and advantages of transferring export sales to domestic sales

　 1、 Disadvantages of transferring export sales to domestic sales

1. No product: the brand, core value, package and price of the product are all blank.

2. No channel: the transformation enterprises basically have no distribution system in the domestic market.

3. No team: foreign trade is the relationship management of key customers, and there are few foreign trade business personnel in general enterprises. To transform the domestic market, the size and team capacity of the marketing team are completely different from the requirements of export, so it can be said that enterprises basically do not have a sales team.

4. Inexperience: there is a word difference between export and domestic sales, but the meaning is thousands of miles apart. Domestic marketing needs to consider comprehensively from market, consumer, competitor research to products, prices, channels, communication, organization, team, management, etc., and foreign trade experience is basically no reference for domestic marketing.

5. Weak R&D: The business model of export sales is generally that customers provide product standards, such as processing with samples and drawings, and pay attention to the control of technology and process to ensure quality. The ability to develop new products is far from meeting the needs of the domestic market.

6. No system: the export process is only in the link of the supply chain where products are delivered to dealers. Compared with the whole supply chain system of domestic sales, which takes into account from product delivery to after-sales service and customer relationship management, the export enterprises obviously lack the support of the marketing system.

7. Not knowing consumers: they are almost ignorant of the target consumers, purchase demands, consumption psychology, etc. in different regions and at different levels of the domestic market.

8. Lack of understanding of the market: lack of understanding of the channel forms, commercial formats, market characteristics, etc. of China's five different levels of markets (from the first level markets such as Beijing to the provincial capitals, prefecture level cities, counties, towns, etc.). {page_break}

　　 2、 Advantages of domestic sales instead of export sales

1. Stable processing capacity: export enterprises have unique advantages in processing, manufacturing and product quality management capabilities. The focus of purchasers is stable production capacity, stable quality, stable and low prices. The number of bilateral audits every year makes the enterprise have good advantages in the above aspects.

2. Stable quality management system: the survival and development of export enterprises largely depend on pragmatic and down-to-earth spirit, good factory management experience and cost control ability, which is a great advantage in the transformation of domestic sales.

3. Speed of life and death and quick response: export enterprises know what it means for enterprises to set a shipping date once they sign an order. In any case, they cannot delay the shipping date. It is common for them to work overtime or even catch up overnight. Therefore, enterprises have developed the ability of quick response and a strong sense of time to ensure timely delivery, storage and transportation after entering the domestic market.

4. Customer service experience and concept: thinking about how to stabilize key customers, how to improve the purchase rate of key customers, how to maintain the relationship with key customers, etc., has enabled export enterprises to develop good customer relationship management experience and awareness over the years, and through cooperation and learning with key customers, they have developed good business values, This is a good advantage over the domestic market, which is not yet fully mature in business ethics.

5. Good bank credit, suppliers' or outsourcing members' credit: the biggest problem is the capital problem of domestic marketing, and few factories will pay in time, which is an indisputable fact! At this time, strong financial strength and smooth financing channels are likely to be the key to success.

6. Start from scratch: a piece of white paper can draw the most beautiful picture. As the saying goes, "Know yourself and your enemy, and you will never lose a hundred battles." Knowing your own strengths and weaknesses, you will be able to avoid weaknesses, make fewer mistakes, and avoid detours. There are some experiences of successful transformation of export enterprises, which can be used for reference by enterprises in the industry.

　　 The successful experience of transferring export sales to domestic sales

First, enterprises with clear goals and plans, firm willpower, entrepreneurial passion and mentality, as well as decision-makers' "driving themselves" and creating new teams, are one of the key factors for successful transformation of enterprises in transition.

Second, the success of domestic sales requires not only what resources and capabilities the enterprise has now, but also what resources are needed to operate domestic sales successfully, what ability to insight into market opportunities, obtain resources from the market, and the ability to effectively integrate resources.

Third, all successful domestic enterprises have experienced the transformation from production position to consumer position. The consumer's position here is not simply to take advertising as the main marketing means, but to meet or even stimulate consumer demand as the starting point, and comprehensively adjust the enterprise's product mix, management mode, distribution mode and a series of enterprise business models.

Fourth, balance between long-term construction and short-term benefits. The road to enterprise development and branding is a marathon race, not a 110m hurdle race. Merle A., President of Global Resources Hinrichs brilliantly said that only by forming influence among end consumers can brands gain consumers' priority. Therefore, only seeing short-term costs and lacking the courage to invest and maintain can a successful transformation not be achieved.

With the 30 years of China's economic reform and opening up, the domestic and international environment has undergone tremendous changes. When China's economy develops to a certain level, it needs corresponding productivity and products to match it, otherwise, the world economy will tilt. The cheap advantage of traditional manufacturing industry will be gradually passed on to the next successor (just as China inherits the traditional manufacturing industry in Europe and the United States), which is the general trend. As a traditional shoe manufacturing enterprise, it should prepare in advance. The earlier the preparation, the greater the opportunity and the smaller the loss. The domestic demand just makes up for the lack of power for export. Therefore, it is a general trend for export OEM shoe enterprises to transform into domestic OBM enterprises. With the continuous integration and growth of domestic OBM, China's OBM is likely to go abroad, China's export OBM brand output is likely to become a reality, and China's Gucci and LV are likely to emerge.