---
title: "5 Promotional Tips for New Product Launches"
description: "Due to promotion difficulty and consumption habits, when distributors and consumers choose products, they first pick bestsellers and only try new products with a tentative mindset. If new product promotions are well-executed, they can quickly open the market. In a sense, promotion is a reward designed to exploit the psychology of getting a bargain, like a lottery ticket: buying gives a chance, not buying never wins. Promotion should incentivize distributors, second-tier wholesalers, and retailers to stock up, and give consumers a reason for their first purchase."
author: "王冠群"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-06-29"
language: "en"
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# 5 Promotional Tips for New Product Launches

> Due to promotion difficulty and consumption habits, when distributors and consumers choose products, they first pick bestsellers and only try new products with a tentative mindset. If new product promotions are well-executed, they can quickly open the market. In a sense, promotion is a reward designed to exploit the psychology of getting a bargain, like a lottery ticket: buying gives a chance, not buying never wins. Promotion should incentivize distributors, second-tier wholesalers, and retailers to stock up, and give consumers a reason for their first purchase.

Due to promotion difficulty and consumption habits, when distributors and consumers choose products, they first pick bestsellers and only try new products with a tentative mindset. At this point, if new product promotions are well-executed, they can quickly open the market.

In a sense, promotion is a reward designed to exploit the psychology of getting a bargain among channel consumers. It's like a welfare lottery: spending 2 yuan might win a 5 million yuan jackpot; buying gives a chance, not buying never wins. Promotion should give distributors, second-tier wholesalers, and terminal retailers an incentive to stock up, and give consumers an incentive for their first purchase.

5 Promotional Tips:

Next, I'll introduce tips that can be used during the product promotion period.

1. Use More Physical Gifts, Less Cash for Promotions

Is it better to use physical gifts or cash for promotions? Physical gifts! Always remember that physical gifts are better than cash.

Once, I went to a township for research, and a second-tier wholesaler had annual sales of over 2 million yuan for a certain brand. I asked him, "Why can you sell so much?" He replied, "This manufacturer is very generous. Look, my refrigerator, washing machine, TV, microwave, air conditioner, tricycle, and bicycle were all given by this manufacturer. Since they treat me so well, can I not repay them?" Physical gifts have the characteristics of value amplification and concealment.

It's like giving a gift to a family member: if you buy them clothes, every time they see the clothes, they'll think of you. But what if you give cash? They won't think of you just by seeing money.

The benefit of using physical gifts is that customers see the promotional item and remember it was given by a certain manufacturer during a promotion, subtly deepening their impression of the company and its products.

Additionally, physical gift promotions can protect the stability of the product's channel price, while cash promotions can easily disrupt the set channel price.

2. Limit Initial Stocking Quantity; Avoid Tiered Delivery and Stocking Incentives for New Products

Some companies focus on new product promotion by setting tiered delivery and stocking incentives—the more distributors ship, the more second-tier wholesalers stock, the greater the manufacturer's promotional effort.

The purpose of such promotions is to encourage distributors to ship large quantities and encourage second-tier wholesalers and retailers to stock heavily. Usually, distributors, second-tier wholesalers, and retailers all rush to stock up to get rewards. Therefore, during the promotion period, the sales figures on company reports look impressive, and the new product promotion seems smooth.

However, many companies fail this way.

A small appliance company set up such tiered stocking incentives to occupy channels: buy 10 units at once, get 1 free; buy 20, get 3 free; buy 50, get 8 free; buy 100, get 20 free. This tiered stocking system was very aggressive, and distributors and second-tier wholesalers rushed to stock, sometimes even engaging in cross-region selling (diversion).

The new product quickly entered channels. But within less than 3 months, price chaos appeared in the market, and distributors began returning goods. Moreover, when the product entered the off-season, distributors and second-tier wholesalers demanded lower purchase prices. The company refused, so they stopped ordering because they could roughly infer the manufacturer's acceptable low price from the promotional intensity. But if they agreed to lower prices, the company's profits would be minimal.

The company fell into a dilemma. Lowering prices was not an option, and not lowering was also not an option; if they did nothing, channel customers would stop cooperating, severely impacting the company's image and credibility, and the market would die; if they addressed it, it would require significant costs.

This is the bitter fruit of unreasonable tiered stocking incentives—shooting oneself in the foot.

Setting a new product delivery volume for distributors can put some pressure on them, increasing their attention to the new product, thus avoiding a "try and see" attitude. However, setting tiered stocking quantities for second-tier wholesalers and retailers needs careful consideration.

Because second-tier wholesalers and retailers are public resources with low loyalty to the company; they care more about profit. As soon as a product is launched, if there's a price difference, distributors, second-tier wholesalers, and retailers will cross-sell to each other to get rewards. The product may not even be promoted yet, but prices might already be chaotic.

Therefore, for new product promotion, we suggest:

When a new product first launches, never push unlimited stock into the channel from the start. For the first shipment, be sure to limit the stocking quantity for second-tier wholesalers and retailers. Limiting the initial stocking quantity has two additional benefits: first, it gives second-tier wholesalers and retailers the illusion that the new product is selling well; second, it increases the confidence of distributors and their sales staff.

Ship smaller quantities each time, just enough for basic display, even if it means more frequent shipments. In simple terms, use small quantities with high frequency. This allows the channel to digest quickly, leading to second orders.

After two rounds of distribution are complete, based on the product's sell-through and an approximate understanding of channel customers' stocking capacity, appropriately increase the channel stocking quantity.

3. Avoid Naked Price Sales

Some companies and distributors, to save trouble, directly implement naked price sales for new products, i.e., no rebates, no promotions.

This approach may seem carefree and high-profile, but it's a serious mistake.

Once, I went to the countryside for market research with a boss from Shanxi. A distributor said to this boss, "I've been selling your product for a year, with sales of over 800,000 yuan. What are you going to reward me with this year?"

The boss was taken aback and said, "I gave you naked prices; I'm not making any money. How can I reward you?!"

The distributor didn't believe a word, thinking the boss was too stingy: "This boss is too ungenerous. I've sold for him for a year, exclusively, and worked hard to sell over 800,000 yuan worth of goods, yet there's no reward or recognition?"

But I knew the boss was telling the truth; he only made 0.5 yuan per product. If he gave rewards to the distributor, he'd work for nothing all year. But the distributor and second-tier wholesalers didn't know that; they thought that after a year of hard work, they deserved a reward. Without a reward, they'd simply stop recommending your product.

In this case, both the company and the distributor had their reasons. However, I think the boss's biggest mistake was ignoring human nature. Although we can't assert that human nature is greedy, we must understand that seeking profit is a natural instinct.

If you want others to distribute your product, you must give them benefits, but the way you give benefits has skill. Here, naked price sales may seem honest, but they are less effective than setting promotional incentives to win hearts.

For best-selling old products, naked price sales can be used at a certain point. Because everyone is familiar with the product's channel price, and everyone knows the profit margins, whether it's naked or not doesn't matter much. But for new products, it's different. The pricing of new products hasn't been tested by the market, and a stable channel price system hasn't formed. Direct naked pricing will cause two direct consequences: first, chaos in the channel price system; second, the product quickly enters a decline phase.

Moreover, we must know a fact: all best-selling products on the market are not sold at naked prices.

4. Use Different Promotional Methods and Intensities for Different Channels

Different channel terminals require different promotional methods.

For consumers buying whole boxes in regular channels, promotional items like prize cards or physical gifts (toothbrushes, towels, playing cards, pens, etc.) placed inside the box are effective; for special channels, direct cash rebates with "high price, high promotion" work better; in modern channels (supermarkets), for example, instant noodles are better promoted in five-pack units.

Using different promotional methods for different channels, with intensity adjusted as needed, ensures the promotion achieves its purpose.

5. Provide "Tempting" Promotional Items

The ultimate goal of promotion is simple: attract consumer attention and entice them to buy. The intensity of the promotion and the choice of promotional items directly affect the results.

What promotional items can tempt people? Fashionable products popular in the market!

Once, a beverage company, when the iPhone 4 was hot, used iPhone 4 as promotional items for second-tier wholesalers and retailers.

What happened? Those second-tier wholesalers and retailers went crazy; to get an iPhone 4, they only stocked this company's beverage in that category. Why? Simple: the promotional item was too tempting for them.

Let's also study Dukang's channel recruitment model.

Why has Dukang liquor grown so fast in recent years? Because its promotional items are very attractive, and its promotional methods are also very appealing. When many liquor manufacturers were still using washing machines, refrigerators, and air conditioners as promotional items, and offering overseas trips as incentives, Dukang set up a promotional gimmick: order 1 million yuan and get a BMW 5 Series car. Is that attractive? Very attractive! Channel customers' excitement was immediately aroused; many distributors attended the ordering conference just to get the BMW, placing orders of 1 million yuan each. Let's think: if the promotional method were the cliché "order 1 million yuan and get 500,000 yuan worth of liquor as rebate," would it have the same effect? Probably not.

With the same intensity, whoever has more attractive promotional items and methods will achieve their promotional goals.

Source: WeChat public account: Yingxiao Li, excerpted from Teacher Wang Guanqun's "Focus"

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