Products, as material carriers that satisfy needs, play a crucial role in a company's marketing activities, and this role has been strengthened with the advent of the era of personalized demand. More companies are focusing on products, more so than on other aspects of the marketing 4P mix. Of course, customers buy the products a company offers, so satisfying customers with products is the most competitive corporate behavior.
We see more companies focusing on product development, with more funds flowing into R&D departments. However, after thorough market research, do the products developed for niche markets actually reach consumers? Due to channel issues, the process of reaching consumers can be overly lengthy, and due to inadequate promotion and publicity, new products may fail to drive sales, or even become a weak point. We know that channels are not like physical water pipes that flow smoothly without obstruction; due to interests, various problems often arise in channels. New products may not quickly reach consumers, company promotion may be insufficient, salespeople may lack confidence in the product, and dealers may not actively promote it—all these can cause channel blockages, preventing new products from reaching the front end of the channel. What we discuss today is precisely the difficulty in selling new products caused by dealer inaction. What should be done in such cases?
I. Excuses Dealers Use to Reject New Products
(1) "The store is too small; there's no place to display." This excuse is often presented plausibly by dealers: "Look, this is your company's problem. When you had me open a specialty store, you designed the size. Now that the space is small, it's not my fault. If your products come in, I have nowhere to put them. You can't expect me to pile goods on the floor to sell, as that would harm the company's image." It sounds reasonable, and the dealer may even appear pitiful, implying that the salesperson was careless in not considering space for future new products when designing the store, and now the dealer has no chance to make money.
(2) "The product has no selling points." Dealers who say this often haven't even glanced at the company's promotional materials. "The product is bad" and "Company policies are bad" are their common refrains. After years of dealing with manufacturer salespeople, dealers have mastered negotiation tactics, constantly complaining to the manufacturer, hoping that salespeople will lower their sales targets. So with new products, since the salesperson will set tasks, the dealer simply says the product has no selling points and they don't want to stock it (or can't), to avoid additional targets. After all, it's a new product; they can sell as much as they can. They might take a sample to try, and if it sells well, they'll order more; if not, they'll drop it. As long as there's no target, a couple of samples aren't too unreasonable.
(3) "The price is too high; no one will buy it." "Your company's products are always expensive, especially new ones," many dealers complain, but in their minds, they are already calculating: the purchase price, the retail price, the channel promotion rebates, and how much profit they can make. The surface meaning is that the high price makes it hard to sell, so they won't stock it, or only in small quantities. In reality, they hope the company will offer more rebates and more support policies for new products.
Most dealers don't care about the selling price, because no matter how expensive, it's sold to customers; dealers focus more on how much they can earn. Since the company has invested so much effort in developing the product, it will also spend heavily to sell it, with promotions and advertising. That's the company's business. As a dealer, I want to make money from both the manufacturer and the customer.
(4) "I'm short on funds; I have no money to stock." If a dealer uses the above three reasons to reject new products, they've put in some thought. Some dealers even bluntly say, "Xiao Li, my target this month is already high. Whether I can complete it, let alone stock new products, remains to be seen." Then they spread their hands, looking like "I have no money; take my life if you want." They simply have no money to stock, and they don't care about new products. If you offer free distribution, they'll sell them, but if it's cash before delivery, forget it.
Besides these four common excuses, dealers may come up with many other plausible reasons to reject new products. Why do most dealers shake their heads at new products that the manufacturer is confident and hopeful about? Sometimes it may indeed be objective, but in most cases, dealers are unwilling to take risks, preferring to wait and see if the first seller of the new product can make money.
II. The S-Curve to Break Through New Product Launch Resistance
The famous management guru Handy proposed the equally famous "S-curve" theory: all things develop along this curve—life growth, product life cycles, even interpersonal relationships—experiencing birth, growth, peak, and decline. If things continue along this curve, everything will eventually die, and the world will become bleak. Handy pointed out that while the trajectory of a thing cannot be changed, we can start a second curve at the peak (point A) of the first, so that the second curve is born on the basis of the first's peak, making it more perfect. In this way, the world develops in a curved manner.
Today, we don't intend to discuss the S-curve life cycle of a product, but rather to offer some advice on the sales growth that new products can bring to retail stores.
Our dealers are accustomed to selling products they've been selling for a long time. Most people feel more confident and emotionally attached to things they are familiar with, because with experience, they become experts in those products. The greatest joy in sales isn't necessarily how much money you make, but also the ability to recommend products to consumers as an expert, gaining their recognition, which brings a great sense of achievement. Undoubtedly, selling the most familiar products best showcases one's professionalism, especially for products with technical content. So another underlying reason dealers don't stock new products is that unfamiliar products require a relearning process, which involves re-identifying with the company's products and the company itself.
Here's the problem: once a company launches a new product, a small group of dealers will start selling it (maybe because they have good ideas, or because company policies force them). In fact, at this point, their retail stores have already begun the introduction of the second S-curve. Even the best-selling products will eventually become slow-moving, so when most people are selling the same hot item, actively introducing new products as a supplement or as a second curve will put you ahead of competitors. Of course, the pioneers of new product promotion reap the richest rewards: a three-month market gap with no competitors provides them with high profits from exclusive sales. After three months, the new product becomes a bestseller, more dealers join the competition, and they fight fiercely, driving prices down. While the battle rages, that small group of dealers starts introducing new products again.
Whenever a salesperson carries a bag to a dealer's store, begging and trying every means to persuade the dealer to stock new products, I feel helpless. Until today, after reading Handy's "S-curve," I realized the profound impact of the timing of new product introduction on store sales, especially store profits. I think this discovery should not only be quickly communicated to our salespeople, but also to our dealers.
Reply with the following keywords to categorize and read related professional articles: Sales Supervisor, Second-Tier Management, Regional Manager, Dealer Management, New Channels, City Manager, Competition, 2015, Manufacturer-Dealer Game, Product Slow-Moving, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Channel Promotion, Sales Misconceptions, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Closing, Market Visit Inspection, Baijiu, Beer, Sales Increase, Agency Products, Cross-Region Sales, KA, Terminal Merchandising, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, New Salespeople, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Investment Attraction, New Media, Dealer Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Stock Pressure, Festivals, Dealer Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Order Meeting, Team Management, Training, Debriefing, Debriefing Report.