What is a Close Market?

A closed market, or Closed Market, refers to a certain regional market with a set of fixed product suppliers, distributors, and customers. This group of people forms a "vested interest group". They will set up various tangible and intangible barriers in an effort to Make the market a closed system to prevent similar products from entering.

Closed market

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A closed market, or Closed Market, refers to a certain regional market with a set of fixed product suppliers, distributors, and customers. This group of people forms a "vested interest group". They will set up various tangible and intangible barriers in an effort to Make the market a closed system to prevent similar products from entering.

Chinese name

Closed market

Foreign name

The blocked market

Strong national brands focus on brand positioning, word-of-mouth publicity, product quality, and have a unified national policy and regulatory process and brand management agency. Manufacturers' monitoring of the market is mainly based on agreed rewards and penalties for direct customers, and channel construction is mainly based on regional general distribution and some major counties. The marketing system is more standardized and unified. Information feedback is reported layer by layer, and there are many procedures. Similarly, there are many procedures in the implementation process. Therefore, this marketing system has a low market execution efficiency and a slow market response rate.

Regional strong brand channels are more flat. When setting up a system, manufacturers pay more attention to the comprehensiveness of channels and strong control over channels. In such markets, manufacturers often directly control first-level dealers in townships and villages, take full advantage of product cost advantages and preferential policy advantages brought by local protection, and implement a direct-control flat contract distribution network management model. Under normal circumstances, the contract sales award in the current year is converted into the sales contract security in the second year, forming a strong chain control of the local dealers. The marketing system aims at in-depth development and high regional market share, so its marketing efficiency is high and the market responds quickly. Business personnel can work out a terminal cost-effectiveness plan within one day and get it in place immediately, with a maximum of three days for channel information feedback. For example, the product packaging is constantly changing and adjusting according to the needs of the regional market; the promotion method is refurbished and has typical staff promotion characteristics. In the base market, manufacturers have strong control over channel investment. Therefore, once a new product enters the market, manufacturers are likely to stop the terminal at any cost. Among them, the blocking position is the diversion of catering and district / county markets, so that products cannot be distributed in hotels and townships. If competing brands pay a high cost to introduce into the catering channel, they will definitely lose money. In addition, the chain effect of contract promotion in townships will build a second city wall. This is how the closed market phenomenon is formed

How does a company break into closed markets? There are usually two methods, one is easy and the other is difficult. There are many concessions to take when taking the easy approach. That makes the company almost unprofitable after entering the market.

Japan has won a coveted bridge contract in Turkey: the construction of a 3576-foot suspension bridge across the Bosphorus. The bidding price in Japan was very low, which surprised both competitors and the Turks; competitors complained that the competition was unfair. The Cleveland Bridge Engineering manager complained: "If Japan said to the Turks 'we will give you this bridge', it might be cheaper (for the Japanese)."

When taking a difficult approach, a strategy for market entry must be developed. Completing this task requires special skills that are not available to most marketers with only general training and general experience. The basic training for marketers is how to use the "4P strategy: Product, Price, Place, and Promo-tion. They know how to formulate a marketing mix strategy to attract customers And end users, and keep costs to a minimum. But the main obstacles to market entry are not all from customers and end users. When the door seals access to the market, all the company needs to do is to break the door, or at least find the key Only by opening the door can goods be delivered to potential customers.

Furthermore, if a company wants to achieve the goal of selling products in a closed market, it must not only open one door but several doors. Companies must identify every gatekeeper and change their attitudes by exerting influence or using power.

This means that when a company wants to enter this closed market, it must be proficient in the art of providing benefits to the relevant local groups. This is more important than meeting the needs of target customers. This requires marketers not only to be general intermediaries (agents) Service providers and distributors) and to meet their needs, and to serve third parties outside this scope, namely governments, labor organizations and other interest groups. Because these people often play the role of "gatekeepers", they alone or in combination prevent companies from entering the market. After successfully entering a protected market, the strategic marketing activities have not ended. The company must not only understand how to enter the market, but also how to occupy the market for a long time, which also requires the use of the above special skills and strategies.

What are the special skills and strategies necessary to enter a closed market? This is the "Big Marketing" proposed by American scholar Philip Kotler in 1986. He believes that under the conditions of trade protection, in addition to the traditional 4Ps, the company's marketing strategy must also add two Ps: Political Power and Public Relations. His definition of "big marketing" is: in order to successfully enter a specific market and engage in business there, it is necessary to strategically use economic, psychological, political and public relations methods to win foreign or local Cooperation and support from several participants.