Potential risks of regional marketing

This year, the overall auto market is in the doldrums, and the major car companies are constantly implementing marketing reforms, among which the decentralization of power to the region has become a major feature. Since the beginning of the year, Dongfeng and Shanghai GM have vigorously promoted regional marketing centers and have initiated extensive discussions. In recent days, Geely, the independent brand, has also joined it, changing the original sub-brand marketing to sub-regional marketing, winning a lot of recognition.

Indeed, for most auto companies, the promotion of regional marketing brings more flexibility and efficiency than the rigid “centralized” type of authority that has been allocated in the past. At present, this method is highly recognized. However, the regional marketing system is not without problems.

From headquarters marketing to regional marketing, its greatest feature is decentralization. It turns out that many companies are “centralized” and concentrate all their functions on the headquarters. The region is often only the executor; after the change, the headquarters decentralizes functions such as marketing, public relations, sales, after-sales, and network development, allowing the region to control its resources. Freedom to formulate business policies, headquarters only assess regional performance.

The two marketing systems have their own advantages. The advantage of the headquarters marketing is a game in the country, which is conducive to the unified command of the headquarters and the improvement of efficiency. This model is useful when companies need to focus resources on doing big things. Regional marketing is characterized by flexibility and efficiency, and it can quickly and better approach the local market and develop more targeted competition strategies.

China has a vast territory, and the auto market has a wide range of diversified and unbalanced characteristics. Local consumers' preferences and habits are different. In the long run, auto companies must cater to consumers and need to continuously decentralize their power to meet the consumption within their respective jurisdictions. This year, the auto market continues to be sluggish, and many companies have great sales pressure. Under this background, it is not surprising that regional marketing is favored by companies.

However, we must not ignore the potential problems in regional marketing, such as the increase in the cost and difficulty of communication, such as the internal consumption of headquarters and the region, as well as the competition between long-term goals and short-term interests, which cannot be ignored.

Because the headquarters and regional goals are different in nature, the headquarters is more concerned about the total amount and brand, and the region may be doing its best for short-term sales. This inconsistency between headquarters and the region often leads to more conflicts in actual implementation.