Launching new products is a highly challenging task, and it is an important job for enterprises to enrich market product structure, increase profit margins, and extend brand vitality. New product launch work often encounters many obstacles; all personnel need to communicate, help each other, and build confidence to win the new product launch battle.
Before launching new products, distributors must clarify whether the brand they represent is a new product from a leading brand or a newcomer just entering the market facing fierce competition. The two should be treated differently. The former has a complete channel network and marketing system, while the latter is in a blank state, and their specific promotion strategies differ significantly.
-01- Step 1: Market Positioning for Cooperation The manufacturer's positioning for the brand's development in the local market determines the later market expense support policy. The distributor's positioning for their own trading company—whether to make quick money or develop long-term in the market—affects the sustainability of operations. Both parties' market positioning and business philosophy are the primary foundation for cooperation. Once cooperation is reached, the trading company takes on the main role of promoting the brand's development in the local market.
For brands that hold an absolute leading position in the local or even national market, the step of competitor analysis can be omitted, and only implementation is needed to ensure new product shelf presence and promotional sales. For second- and third-tier brands entering the market, facing fierce competition, thorough competitor analysis is necessary. Know yourself and know your enemy, and you will never be defeated.
-02- Step 2: Brand Gross Profit Estimation Businessmen value profit. For distributors, unprofitable business is not done. Before representing a new product, comprehensive consideration of product gross profit is needed, including sales gross profit (i.e., purchase-sale price difference), incremental profit from representing major brands, and manufacturer's market policies. Brands with higher gross profit and potential to become strategic partners should be given extra support. Remember not to disclose specific gross profit rates to salespeople.
-03- Step 3: Market Planning and Deployment Take condiment distributors as an example; their main sales channels are supermarkets, wholesale, and farmers' markets. The first stage of distribution focuses on assessing new product shelf presence, with milestones at 30%, 50%, 60%-70%, 80%-90%, and 100%. If a distributor covers 1,000 outlets, the first batch should complete distribution to 300 outlets, and so on.
Salespeople who meet the targets can be rewarded with bonuses for outlet development. Those who fail to complete targets should not only be fined but also deeply analyze the reasons in summary meetings, thereby fully mobilizing their initiative. In the second stage of distribution, distributors can introduce tasting and buy-one-get-one promotions at appropriate times to boost sales.
Regarding product shelf presence, distributors can adopt a "take less, get more" strategy, i.e., reduce the quantity per order but increase order frequency. For example, for a certain series product, launch a "buy six packs, get six packs free" combo, stipulating that downstream distributors can only take six packs each time, no more, no less. This is because the combo can fill a standard shelf display; if less than six packs, the display is incomplete.
If more than six packs are taken, it can cause terminal inventory backlog and poor sell-through, affecting distributor confidence; moreover, the product date on shelf becomes older, giving competitors' salespeople the impression of poor product quality. Thus, the "buy one get one" activity provides distributors with ample profit space, ensures product freshness, and increases interaction between salespeople and terminal owners.
After products are distributed, the key issues are maintenance service and sales improvement. Distributors should remember the fourteen-character motto: Maintain, maintain, maintain again; improve, improve, improve again!
-04- Step 4: Market Expense Investment For distributors, some strategic partner brands will set up dedicated sales teams to develop and maintain the market. Before the distribution process, a rousing kick-off meeting should be held to give salespeople a sense of responsibility and mission. Salespeople should record the new product distribution process and display status with photos and videos, and conduct monthly performance reviews in summary meetings to review last month's performance and identify gaps.
Based on the characteristics of the new product, distributors must determine whether the product should be displayed on hanging nets, hanging strips, shelves, or pallets; and whether it is normal or special display. Each terminal outlet with distribution has certain display standards. Salespeople who complete displays according to standards receive positive incentives, while those who fail receive negative incentives.
Due to limited market expense, after the first round of distribution, the repurchase rate determines the expense ratio for each terminal. For example, in each farmers' market, choose one terminal with a good repurchase rate for display support, creating a contrast effect with other terminals, making other terminal owners envious, thereby motivating them to promote harder for greater benefits and achieve sales growth.
-05- Step 5: Personnel Expense Investment Due to the vast market space, a single distributor cannot cover all terminal outlets. Therefore, after resource investment and first-round distribution are completed, and the market has responded to the new product with good sell-through, distributors should seek sub-distributors to fill market gaps, cover more outlets, and jointly expand the market.
At this point, the network is fully expanded, and the distributor's role changes to that of a brand operator, responsible for training sub-distributors in sales skills and operational methods, helping them improve their operating systems, and even tailoring sales plans, working together to create more model stores.
This stage requires more personnel investment to assist sub-distributors in intensive market cultivation. Therefore, distributors must plan the number of personnel needed for each brand to avoid underutilization.
-06- Step 6: Task Rhythm Decomposition After the network is expanded and sub-distributors reach cooperation intentions, distributors need to set weekly, monthly, and quarterly task targets based on the number of SKUs and regional market characteristics. In the early stage of new product distribution, the focus is on outlet coverage and shelf presence, not excessive sales assessment. After the first round of resources is fully invested and outlet development is relatively complete, sales are then assessed, and a new round of resource investment and outlet development begins.
During new product distribution, incentive measures for salespeople should not be overused, nor should they be included as a standard part of salary structure, as this would convey that incentives are a routine measure applicable to any situation and brand. In fact, many brands do not have enough gross profit margin to support distributors giving bonuses to salespeople.
Process assistance should also not be a daily routine. Distributors hire salespeople to solve problems, not create them. They can provide appropriate guidance on methods and skills but should not interfere excessively, allowing salespeople to fully exercise their initiative.
-07- Step 7: Implementation and Inspection After the above steps are completed, distributors should track the weekly, monthly, and quarterly task completion of salespeople and sub-distributors in a timely manner, review sub-distributors' sales task completion and whether expenses are implemented properly, and provide sales rebate rewards as appropriate.
Any plan will encounter new problems in actual market operation, especially in the first few days. Distributors should implement intensive tracking, hold summary meetings every evening, set benchmarks, and share successful experiences. Address individual problems with unified solutions to boost team confidence.
In the end, new product distribution is about repeating basic work round after round, gradually intensifying market cultivation, and letting the brand take deep root. If every step is strictly completed, it is hard for the product not to sell well.
Source: "Sugar, Tobacco, and Wine Weekly, Food Edition" March B issue