Dong Mingzhu: Gree's Marketing Master

2012 was a year to challenge Dong Mingzhu's marketing capabilities. When peers in the air-conditioning industry were undergoing strategic contraction and were troubled by the uncertain sales prospects, Dong Mingzhu announced at the China Refrigeration Exhibition on April 11 that Gree's revenue target for this year's sprint to 100 billion yuan. This means that Gree achieved a growth rate of 20% on the basis of revenue in 2011, increasing the sales volume of 10 million air conditioners a year.

However, the helm of Gree, recognized as the most innovative in marketing in the industry, is willing to accept such a challenge. In the 21 years of Gree, Dong Mingzhu has never stopped challenging himself. When she joined Gree as a salesman in 1991, she was 36 years old and had management experience in chemical companies, but she was very unfamiliar with marketing. Relying on diligence and continuous learning, she grew into a star salesperson within a year. In 1994, there was a "collective job-hopping" incident in Gree, and Dong Mingzhu was appointed to serve as the deputy director of Gree's marketing department. In 2001, Dong Mingzhu was promoted to the president of Gree. When facing the interests of big distributors and channel dealers, he changed the marketing rules with extraordinary courage and tenacity and opened up a wider market.

At the same time, under her contribution and leadership, Gree has grown from an unknown air conditioner factory with an annual sales volume of less than 20,000 units to the world's largest specialized air conditioner company. In 2011, Gree Electric's total operating income reached 83.595 billion yuan, with a net profit of 5.245 billion yuan, a year-on-year increase of 22.67%.

Dong Mingzhu brought Gree not only a bright performance report, but also a tenacious marketing-centered strategic thinking, as well as the independent marketing model, independent technological innovation and international development path supported by this idea. When many peers were still in pain on the single-plank bridge of the price war, Dong Mingzhu has led Gree on the right path to increase value.

Looking back on the career of challenging myself in Gree, Dong Mingzhu said: "In the struggle of one's life, one should care about the process rather than the result. I continue to challenge myself. In the process of challenge, I constantly understand, learn, improve, and finally surpass myself. .”

The toughness of Dong-style channels

“Maintaining reasonable profits is the premise of sustainable operation of the enterprise. In 1997, the Hubei distributors who were chasing the Gree market price system were purged. In 2004, Gree broke with Gome and established its own The channel controls the terminal, which enhances Gree's own control over the supply chain, and under the premise of obtaining reasonable profits, Gree has achieved a win-win relationship with consumers and distributors, and achieved healthy development." The idea is fully revealed in Dong Mingzhu's remarks.

In 2011, despite the decline in the overall profits of its peers in the home appliance industry, Gree still achieved double growth in operating income and profit. Liu Buchen, an expert in the home appliance industry, analyzed that the net profit margin of air-conditioning companies is directly related to the price war, and the prices of many local brands are lower than the international level. The reason why the price of Gree brand air conditioners can be set higher is directly related to the sales of most of its products through specialty stores.

In order to establish a reasonable price system, Dong Mingzhu once had a thrilling game with big dealers and big retail companies. In 1997, Gree's four major distributors in Hubei competed to reduce prices in order to seize territory and pursue profits in the air-conditioning war in the entire industry. As a result, Gree's market price system in Hubei was rushed to pieces. Dong Mingzhu, who was the general manager of Gree sales at the time, proposed the idea of establishing a regional sales company: with the Gree brand as the banner and interests as the link, the enterprise and the distributors will jointly fund and establish a mutually beneficial and win-win joint operation entity. As a result, the prototype of Gree's own channel - Gree Hubei Sales Company was born. Since then, this model has been rolled out nationwide.

A year after the establishment of the sales company, Dong Mingzhu discovered another big problem. Due to the regional monopoly, the sales company made huge profits, while the distributors under it were both hard-working and unable to make money. Dong Mingzhu believes that a reasonable business idea should be to achieve a win-win situation, that is, the interests of upstream suppliers, downstream manufacturers, and end consumers can be guaranteed, and it is inappropriate for any party to be damaged. In August 2003, Dong Mingzhu began to take the initiative to operate on the channel. In the first step, Gree injected funds into the Guangzhou and Shenzhen branches for the first time, and increased the shares of the two branches to achieve the purpose of holding. In the second step, Gree directly dispatched the chairman and sales director from the headquarters, and the general manager was also served by the new shareholder. Third, re-divide the sales area. The intervention of capital has strengthened Gree's control over distributors, forming a three-level system of manufacturers (decision-making layer) - manufacturer's joint venture (execution layer) - channel body (terminal).

These sales companies are no longer first-level agents in the traditional sense, and have completely transformed into management companies. Their main responsibilities are market development, network construction, quality tracking and service guidance, as well as corporate image promotion for Gree. Each region and the primary, secondary and tertiary markets in each region adopt a unified price and unified service method, do not engage in sales approval at all levels, and do not engage in dual price tracking inside and outside the system, so that the national sales market is on the same starting line. After straightening out the relationship with dealers, Gree achieved a leap-forward development, and its sales increased from 4.2 billion yuan in 1997 to 13.832 billion yuan in 2004.

In March 2004, Gree Electric and Chengdu Gome had a dispute over the sales of Gree air conditioners. Gome cut prices without authorization and destroyed the long-term stable and unified price system of Gree air conditioners in the market. Dong Mingzhu decisively decided to stop supplying to Gome. At that time, Gome's rival Suning threw a large purchase order of 4 billion to the air-conditioning industry. Gree's competitors were present, but Dong Mingzhu was absent.

Will it be possible to bypass Gome and Suning in the first-tier market and take the road of self-built specialty stores? There are also many voices of doubt within Gree. Dong Mingzhu firmly said to them: "Gree's self-built channels can not only suppress price suppression from channels, but also maximize customer value. Excellent foreign brands can have their own stores, why can't we do this?

As a result, in 2004, Gree started a large-scale expansion campaign to build specialty stores across the country. By the end of 2004, Gree had 50 air-conditioning specialty stores in Guangzhou alone, and thousands nationwide. The channel model of Gree stores not only enhances Gree's brand image, but also the exclusive marketing model of stores is conducive to integrating advantageous resources, providing consumers with more thoughtful and professional pre-sale, in-sale and after-sale services, fundamentally guaranteeing manufacturers, Tripartite interests of businesses and consumers.

In addition to stabilizing the price system, Gree has achieved rapid sales growth with its excellent product quality. The sales in the first three quarters of 2004 reached the annual sales in 2003, and the profit increased by 22.74% year-on-year. The air-conditioning manufacturers that won the bid for Suning's large purchase orders found that Suning adopted a price war to attract consumers. Therefore, although their brand's air-conditioning sales were increasing, their profits had declined.

In 2007, Gree established a "4S+1" specialty store on the basis of its specialty store, creating a powerful retail terminal through "4S" professional services. Today, Gree has more than 15,000 specialty stores around the world, which are independent of major chains. In 2011, the sales volume of the system in specialty stores accounted for 90% of the total sales volume of Gree air conditioners. Dong Mingzhu's strategy of "distributing channels and driving the market" has yielded fruitful results.

From the market, I realized that "products are the foundation of marketing"

"Products are the foundation of marketing", this concept was realized by Dong Mingzhu in marketing, "I deeply realize the perfection of sales. Product is the foundation of marketing. Without good products, no matter how good marketing is, it will not last. In 1996, Gree air conditioners were the first in the country in terms of sales, but the gap with the second and third places did not widen. By 2010 After that, the gap between Gree and the second place was hundreds of billions, and the real reason for the gap was not marketing, but Gree's technology, Gree's quality, and Gree's pursuit of consumer satisfaction."

In Dong Mingzhu's view, both ends of the "smile curve" - technology and market - complement each other, technology can create new markets, and markets can affect new technologies. It is a dangerous move to make technological innovations that the market does not need. "The inability to break through the core technology is the ceiling for the development of an enterprise. As long as the technology is continuously upgraded, new market space will be created. For example, in the field of household air conditioners, from the single machine in the past to the current one-to-many; in the commercial field, the need for constant humidity , the demand for new functions of constant temperature, which requires manufacturers to continuously update technology and produce new products." Dong Mingzhu, who was born in marketing, has bright eyes when it comes to research and development, and high technology is the best weapon for marketing in her eyes.

As early as 2000, Gree suffered a downfall on an engineering order because of its contempt for technical details. "When we received the order, we thought that we could do it independently by ourselves, but only after we received the order did we find that the one-for-four air conditioner required by the customer could not be made. In desperation, Chairman Zhu Jianghong went to Japan to purchase mature products in person. After the project order was completed, Gree lost 280,000 yuan." Dong Mingzhu said that this lesson made Gree executives including himself realize how important market-oriented technological innovation is.

"Scientific and technological innovation is the future of Made in China, otherwise it is just a dream to surpass Made in Japan." Dong Mingzhu and Zhu Jianghong have a deep understanding of this.

In 2001, Zhu Jianghong went to Japan to purchase inverter multi-connected air-conditioning technology, but was sternly rejected by Japanese companies, and said that he would not even sell spare parts to China. At that time, inverter multi-connected air-conditioning technology was considered to be the most advanced air-conditioning core technology in the world, and it has been mastered and controlled by Japanese companies since its inception.

This unpleasant experience made the two top Gree partners determined to implement independent technology research and development. They started the research on frequency conversion and multi-connection technology with a set of product manuals brought back from Japan. A year later, Gree research and development The personnel lived up to expectations and successfully developed a mature frequency conversion multi-connection technology with independent intellectual property rights.

Gree, which has tried the sweetness of independent innovation, continues to increase its investment in technology. The company has formally established the development strategy of a technologically innovative enterprise. In 2005, China's first centrifugal chiller manufactured by Gree was officially rolled off the production line. The centrifugal chiller is currently the largest central air-conditioning unit with the highest energy efficiency ratio in the world. It has mastered the monopoly of its core technology and production process. In November of the same year, Gree pioneered the world's first digital scroll ultra-low temperature air source heat pump multi-unit. On December 17 of the same year, Gree's high-efficiency DC variable-frequency centrifugal unit was officially launched. Under the same working conditions, it can save energy by more than 40% compared with ordinary centrifugal chillers.

“What Japan takes 10 years to walk, Gree air conditioners take 1 year to walk.” wrote an authoritative American media.

"With the breakthrough in core technology of air conditioners, we have full confidence to overcome any difficulties in marketing. Gree's central air conditioner's sales revenue in 2012 is planned to exceed 10 billion yuan." Dong Mingzhu outlined Gree's new market territory for reporters, "The rapid growth of the performance of the central air-conditioning market will be a strong guarantee for Gree to achieve a revenue of 100 billion."

Make marketing overseas

In the overseas market, Dong Mingzhu pursues the principle of "the market first, then the second." After successfully establishing the influence of the Gree brand in the local area, it will establish production bases in suitable areas as needed. When implementing this strategy, she brought her "toughness" in the domestic market overseas - insisting on the road of independent brands, and taking the line of quality and technology, rather than the simple price line.

In 1998, Gree opened up the Brazilian market. Brazil is a rapidly developing country, and the consumption demand for air conditioners has grown considerably. At the beginning of entering Brazil, Gree could sell about 2,000 to 3,000 units a year. After gradually figuring out the law of selling air conditioners in Brazil, Gree's production base established in Brazil in 2001 was officially put into operation. In 2009, Gree's annual sales in Brazil exceeded 500,000 units. "In Brazil, Gree air conditioners adhere to the positioning of mid-to-high-end brands with higher prices. Many celebrities such as Ronaldo use Gree air conditioners," said Huang Hui, vice president of Gree.

In 2006 and 2008, Gree successively established factories in Pakistan and Vietnam. In fact, these two production bases were all invested and constructed by local distributors. Gree only provided technical support and sold them under the Gree brand. While avoiding investment risks, Gree quickly seized the opportunity to expand in the local market.

“During the financial crisis in 2008, considering the risks to customers’ funds, we voluntarily gave up an OEM order of 2.5 million units. Gree exports decreased by 2 billion that year, but our 300,000 units of Gree air conditioners Entering the U.S. market, profits increased by 30% despite the decline in total exports.” Dong Mingzhu pointed out that the financial crisis gave Gree the opportunity to actively adjust its business structure, and the OEM business was affected, while the export of its own brands showed the dawn. .

Gree's annual report shows that in 2011, overseas sales revenue accounted for a quarter of Gree's total sales, and Gree's own brand air conditioners exported more than 2.5 million sets, a year-on-year increase of nearly 50%. In Western Europe, Gree air conditioners have a market share of 30%. In Brazil, Russia and other countries, "Gree" is the second largest local air conditioner brand. In Italy, the market share has exceeded 60%.

“The support point for an enterprise to truly achieve internationalization lies in brand internationalization. A brand must have strong technical support behind its going global. Only technology can change the brand image.” Dong Mingzhu analyzed the internationalization of connotation.

In 2008, the World Cup in South Africa launched a tender for all air-conditioning manufacturers around the world. Global air-conditioning giants such as Carrier, Daikin, York, McVill, Trane, and Hitachi came to bid, and Gree competed with international giants on the same stage. .

“We used our strength and sincerity to impress each other.” The relevant person in charge of the commercial air conditioner sales department of Gree Electric Overseas Sales Company recalled.

On August 15th of this year, when the organizing committee sent a consultation to various air-conditioning manufacturers for the first time, Gree submitted bids, but the organizing committee on October 15th, while confirming the Gree bid The organic unit is technically transformed to adapt to the harsh local natural environment and to meet the requirements of the organizing committee's compatibility agreement and many other requirements. On October 25th, when the delegation of the project responsible unit was invited to Zhuhai, China, they were stunned: in just 10 days, the prototype that had completed the technical transformation was placed in front of them, and a large number of technical parameters submitted by Gree showed that the new prototype All requirements put forward by the organizing committee have been met.

Gree's excellent performance made the organizing committee very satisfied. In the end, the South African World Cup Organizing Committee purchased air-conditioning products from Gree, including the Football City Stadium, the World Cup Officials Office Building and other 7 key infrastructure supporting projects for the World Cup, with a value of more than 200 million yuan.

After winning the football World Cup project, Gree was favored by the Olympic Games project. In September 2011, Gree central air-conditioning won the bid for the supporting project of the 2014 Sochi Winter Olympics in Russia.

In June 2011, Gree US sales company was established. In just half a year, Gree brand products have entered mainstream American hypermarkets such as Home Depot and Wal-Mart. Dong Mingzhu said: "Gree America has now received an order of 100 million US dollars. When the Gree brand is recognized by American consumers, we will build a factory here. This is our next plan."