Forms of Advertising Within the Trade Network

Consumer​​

Channel I

Seller​​

Seller​​

Seller​​

Agency​

Seller​​

Agency​

Seller​​

Seller​​

Channel II Channel III Channel III Channel V

b. Channel II:The product consumption process goes through an intermediary stage, the retailer, who directly sells the product to the consumer. This is the part that makes an important contribution to product promotion, facilitating customer purchasing behavior and satisfying customer needs in the fastest way. Because of such importance, it is necessary to attract intermediaries by promoting and discounting reasonably, as well as reducing prices to a certain extent for customers who buy a large volume of products, while at the same time carrying out product advertising and promotion work as well as answering questions.

Clear and easy to understand statements create psychological safety and trust for the intermediary.

c. Channel III:This consumption channel has 2 intermediate stages: wholesalers and retailers. Because the direct transaction with the enterprise is the wholesaler, the significance of this consumption channel is that the large volume of consumed products, the result of high or low consumption affects the revenue and business activities of the enterprise. Attracting customers, increasing the quantity of consumed products is often solved by supporting techniques such as: discounting, promotion, supporting transportation, discounting... The product preparation work of the enterprise must be fast, accurate, and timely. This will contribute to building the reputation of the enterprise with customers in the implementation of the contract signed by both parties. To fulfill the above requirements well, it requires close and accurate coordination of all departments in the production line with the sales department to make the right decisions and have high economic efficiency to achieve the set goals and objectives.

d. Channel IV:This channel includes two intermediaries: agents and retailers. In the current market mechanism, there are two types of agents: private agents and state-owned agents. Private agents often have little capital, so they have to mortgage assets and often pay late. Business results are always linked to their own interests, so they are always enthusiastic and dynamic to find the best business solutions, achieving high efficiency for the enterprise. State-owned agents are heavily influenced by the nature of the state-owned economic sector, so they are still indifferent to the business process, sales costs are still high due to the sense of responsibility of sales staff, poor management, resulting in low sales volume and low efficiency. However, state-owned agents have a rich, convenient store system, and are prestigious with the market and customers. That is a favorable condition for state-owned enterprises to do business more profitably.

Once the nature of these two economic components is understood, the enterprise must have appropriate policies and measures to maximize the strengths as well as reserve for bad situations to ensure the safety of the enterprise's capital. The business department must assign specialized teams to regularly monitor and closely follow the business activities of the agents to have timely countermeasures to limit risks.

e. Channel V:This is the consumption channel that is most difficult for businesses to manage and monitor. There are 3 intermediaries in the channel: Agents, wholesalers and retailers. Because the accuracy of the feedback information that businesses receive is limited by this channel, businesses cannot adapt to market changes and easily lose the market. However, this is a large-volume product market channel, directly and importantly affecting the consumption and production activities of businesses. To achieve high efficiency with this channel, businesses need to apply many measures to financial work such as determining the legal status of agents in a genuine way to create business reputation with customers indirectly through agents, regularly monitoring and collecting information on the financial activities of agents. Only then will the capital of the enterprise be guaranteed to be safe, the enterprise will have enough capacity and strength to increase production, expand market share, create position and power in business, and stand firm in the market.

An issue directly related to product consumption channels that businesses need to clearly and specifically identify. That is:

Determine the consumption method:

In fact, there are only two basic consumption methods for businesses:

- Wholesale method: Wholesale is a form in which manufacturers sell their products to end consumers through intermediaries including: wholesalers, retailers, and agents. These intermediaries will continue to circulate the company's goods to consumers. Wholesale is usually in large quantities and at stable prices.

Forms of wholesale: + Buy outright: The seller actively sells, offers, and sets prices, the buyer bases on consumption capacity, calculated selling price, and risks. If the purchase is successful, the buyer will negotiate with the seller to sign a sales contract. This form can create conditions for manufacturers to follow a stable and effective production plan. The buyer is completely proactive in determining the selling price and quantity.

+ Buying and selling in the form of consignment agent: This is a form that has additional meaning for the form of outright purchase and sale in case for some reason the above form cannot be applied. With this form, the two parties will agree with each other on

prices and costs incurred in the consumption process as well as the profit that the agent enjoys.

+ Buying and selling in the form of production and product consumption linkage: Business cooperation can link in production and product consumption, exploit and create more sources of goods to better meet the demand for products and goods, contributing to market regulation, ensuring mutual benefit for both parties.

Advantages of wholesale: stable consumption, fast circulation time, large consumption volume, creating conditions for businesses to save circulation costs and quickly recover capital.

Disadvantages of wholesale: Products must go through many intermediaries before reaching the final consumer. Therefore, the producer must divide the profit, cannot control the selling price, and actual information about the final customer is often distorted and inaccurate.

- Direct retail method: This is the form in which the manufacturer sells its products to the final consumer through distribution intermediaries. The enterprise directly opens stores to introduce and sell products, and at the same time organizes accompanying services. To effectively implement this method, the enterprise must complete and strengthen the consumption system in terms of both human resources and operational capacity, and at the same time develop service activities for customers.

+ Advantages of direct retail: convenient store system for customers. Businesses have the ability to quickly and accurately grasp the desires and wishes of consumers, thereby proposing better measures to meet market needs.

+ Disadvantages: This form of consumption has a complex organization, slow capital circulation time, long goods circulation time, making the production cycle longer, and market relations narrow.

5. Measures to support product consumption.

5.1 Advertising

Advertising is the use of media to convey information to intermediaries or to final customers within a certain space and time.

The essence of advertising is to inform the public and consumers about the product and the business that produces that product. The goal of advertising is to

speed up the consumption as well as increase the ability to consume the business's products, attract more and more customers to the business, create prestige for the business. Advertising aims to introduce new products or improved products to customers, making customers know the better differences of the business, contributing to increasing the competitiveness of the business compared to competitors. Advertising media are very diverse and rich, specifically advertising media outside the consumption network include:

- Newspapers are advertising media aimed at a wide audience. Newspaper advertising content usually consists of three components: text, advertising page, and name and address of the production and business establishment.

- Radio: is a popular advertising medium, capable of quickly and widely informing. To improve the effectiveness of radio advertising, it is necessary to pay attention to the timing of information, the number of times the information is repeated and the time spent on each information.

- Television: is the most popular advertising medium today, through product images at the most favorable angle (thanks to cinematographic techniques) to stimulate, attract and interest households in the product, especially new products.

- Poster: is a form that allows maximum exploitation, benefits in terms of image size, color, position, advertising theme. Advertising posters include billboards and flyers.

- Product packaging and branding: This is an important and popular means of advertising products, with high efficiency. This means of advertising makes customers focus their attention on the products. It contributes to improving the quality of products and ensuring the value of use of products.

- Postal advertising: This is advertising in which businesses contact important customers, send them catalogs, promotional greetings, product samples and advertising publications by post. The effectiveness of this medium is not great because it only focuses on a specific number of customers.

5.2 Forms of advertising within the commercial network

- Signboard with the name of the production and business establishment: the name of the establishment must be clear, beautiful, written in large letters to ensure that passersby by motor vehicle can see it and placed in the middle of the main entrance of the agency.

- Advertising glass cabinets: are the main and popular form of advertising of product introduction stores. There are many types of glass cabinets: window glass cabinets, mid-bay glass cabinets... each type is suitable for a location and has its own function.

- Displaying goods at the point of sale: is a popular form of advertising in all types of businesses with different scales of product structure and business locations. It is suitable for both wholesale and retail business networks.

- Advertising through salespeople informs customers orally and in writing about goods, sales rules, sales methods and payment methods... Salespeople must have knowledge about goods, know the art of selling, know how to present products and other necessary knowledge about the goods market.

5.3 Other product consumption support activities

- Organizing customer conferences, seminars, inviting guests to dinner, giving gifts with the aim of building community relationships, friendly relationships between businesses and customers, creating customer trust in the business. Thereby creating customer support for the business in some aspects, creating a bond between customers and businesses.

- Promotion: is a measure used by businesses to encourage product consumption. A common promotion method is giving gifts to customers.

- Sales: use sales staff to introduce and sell products directly to customers.

- Fairs and exhibitions aim to introduce the products of enterprises to customers and the public. Fairs are places where enterprises meet, exchange and search for new sources of goods, new customers and sign sales contracts.

- Sales promotion: is a set of measures that can increase the amount of goods sold by creating an additional material benefit for the buyer. Applied sales promotion measures are giving bonuses to sellers with sales exceeding the prescribed level, sending sample coupons, selling at a special discount for a batch of goods, giving customers a discount coupon or drawing a prize...

- Promotions and expansions to boost consumption and expand the market. Techniques often used include: sales with prizes, lucky draws, installment sales, gifts...

- Flexible payment method: In addition to supporting shipping costs, customers also receive a certain discount rate for each product type and for the total number of products purchased in a quarter or a year. In addition, for agents who pay in installments, pay by goods-to-goods conversion...

6. Analysis and Evaluation of Sales Performance

Analyzing and evaluating the results of product consumption activities is to review and evaluate the fluctuations in the volume of consumed products in the entire enterprise and each type of product, and at the same time consider the balanced relationship between reserves, production and consumption to see an overview of the consumption situation and the initial causes affecting that situation.

Using comparative analysis method

- Compare actual revenue calculated according to planned selling price (or fixed selling price) with planned revenue calculated according to planned selling price (or fixed selling price) both in absolute and relative terms.

Revenue calculation formula:

n Q i : SL product consumption

Revenue: (TR) = 

i  1

P i Q i

P i : Consumer price

( Mass of product x​​

Selling price )

(

)

Completion rate =​​​​​​​

real consumption​​​

general plan​​​

Mass x sp​​​​

Planned selling price​​

Number of products =​​​​

Number of products + Number of products​​​​​​

consumer products​​

products manufactured in the period ending inventory​​