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"Every shop opens for business." Any new brand entering the market will cause customer diversion from other brands. There is always a segment of consumers who, driven by curiosity and a desire for novelty, and because past terminal stores offered limited brand choices, were "forced" to consume certain brands. Once a new brand appears, these consumers abandon old brands for the new one. Under intense competitive pressure, established brands in the market closely monitor every competitor's move, especially new entrants. Thus, finding ways to curb new brands' sales or block their entry into channel terminals becomes the most direct and effective sniping tactic. Dominated by this mindset, new brands often face containment and "aggression" from established brands at the terminal, facing heavy competitive pressure. So, what measures should new brands take to implement counter-containment and counter-"aggression"?
Common Terminal Containment Strategies
Terminal merchants are the commercial resources on which suppliers rely for survival, the last critical link in commodity circulation, and the arena for competition among suppliers. For consumer goods, competition among brands primarily manifests at the terminal, serving as the carrier for price wars, advertising wars, promotional wars, and other business strategies. Brand containment and counter-containment, "aggression" and "counter-aggression" among suppliers of similar products have never ceased, especially against new brands. So, what measures do established brands typically take to contain and "aggress" against new brands?
Setting obstacles for new products entering stores through various relationships (including under-the-table operations). This often occurs in small and medium terminal merchants where management is not standardized, providing space for established brands to exploit relationships (such as commercial bribery or power) for personal gain. For large terminal merchants (like large shopping malls and supermarkets), there is a set procedure for new products to enter: submitting product information, certificates, samples—initial negotiation with procurement staff—second negotiation—new product meeting approval—processing procedures to enter the store. In such cases, a fair, just, and transparent trading environment is more likely.
Established brands implement buyout operations. This includes buying out the operating rights for a product category or buying out shelf space, thereby gaining a "monopoly" on product sales at the terminal. This is common in large and medium supermarkets, preventing competitors from entering.
Established brands use brand influence to pressure terminal merchants. In this case, influential and high-performing established brands use their brand influence to "threaten" terminal merchants into refusing new brands entry. This method is mainly effective with small and medium terminal merchants.
Established brands control terminal businesses by forming commercial interest alliances. By forming interest alliances (such as providing financial or material support to terminal merchants, signing exclusive distribution or agency contracts), and clearly stipulating these in contracts, they restrict the entry of competing brand products.
Established brands set up promoters for terminal interception. It is common to have stock clerks and promoters in large and medium shopping malls and supermarkets, who divert customers away from new brands. The role of promoters cannot be ignored. When the author was a marketing manager at a dairy company, they once calculated that sales performance could differ by 1.2 to 1.4 times, a significant gap.
Established brands set up display blockades at sales terminals. Competing brands use combined display methods, such as floor stacks and end caps in addition to shelf displays, to keep products constantly in front of customers, creating consumer segmentation.
Holding promotional activities to "snipe" at new brands. When a new brand just hits the shelves, competing brands immediately launch various sales promotion activities (such as buy-one-get-one-free) to attract consumers and relegate the new brand to the "cold palace."
Using in-store advertising to interfere with new brands. They use indoor and outdoor store advertising to publish consumer guidance ads, aiming to gather crowds and divert customers' attention from new brand products.
Established brands improve their product lines for product containment. When established brands find their product lines incomplete, they urgently develop new products to address shortcomings in product line competition against new brands, challenging new brands with similar products.
Establishing close cooperative relationships with terminal merchants through in-kind gifts. This involves giving gifts to terminal merchants, such as beverage companies providing refrigerated cabinets, to form good cooperative relationships. Unlike interest alliances, these relationships lack contractual agreements (specifically limiting new brands), even if there are agreements on ownership of the gifts. This is a way to exclude new brands through "small favors," commonly seen with small and medium terminal merchants.
Successfully Implementing Terminal Counter-Containment
For new brands, being surrounded by competitors upon launch is normal. Currently, it is almost impossible to find any product without competitive or substitute products in the market, so new brands must learn to "break out" at the terminal. New product launches should formulate counter-containment and counter-"aggression" strategies and plans, with the premise of conducting scientific market research before launch to identify competitors' terminal strengths and weaknesses, find problem points, and seek opportunities for the new brand at the terminal, thereby determining terminal marketing strategies. More critically, based on competitors' strengths (established brands) and the new brand's weaknesses, formulate channel counter-containment and counter-"aggression" plans to create the safest and most relaxed launch environment for the new product. So, how to conduct market research?
I. Marketing Channel Research
Product marketing channels are determined by multiple factors such as industry, product characteristics, and consumer demand. Channels are innovative but also specific. Therefore, while innovating channels, one cannot ignore conventional channels, especially those used by competitors. Mastering them is like having a battle map and a compass for strategy and tactics.
Terminal network survey. Conduct a thorough baseline survey in the target market. This relates to studying competitors' distribution and also to the new brand's distribution strategy. Product distribution strategy is not only reflected in outlet selection but also includes distribution entry points, distribution order, distribution cycle, etc. Generally, product distribution strategies include: core layout method (choosing core backbone terminals for distribution), peripheral contraction method (choosing non-core backbone terminals for distribution, then approaching core backbone channels), and gap distribution method (choosing market gaps for distribution). This depends on various factors such as enterprise strength, product quality, product positioning, and marketing capital capabilities. It can be said that factors like enterprise capability and brand strength determine which type of terminal to "cut" first.
Determining terminal network management levels. For terminal network management, the surveyed network must be classified, dividing terminal merchants into KA, A, B, C stores or even more levels, to confirm key terminal merchants, distribution order, and accordingly formulate product delivery cycles and service visit cycles, facilitating daily service and terminal maintenance.
Research on terminal service models. This is crucial. There are usually several service models: fully direct distribution by the manufacturer, with manufacturer maintenance and no distributors or agents; direct distribution by the manufacturer for large stores, with other agents or distributors handling delivery and maintaining their respective networks; and fully entrusting distributors or agents with product delivery and network maintenance. Through research, it is necessary to find a terminal service model suitable for the enterprise, as it directly relates to marketing promotion costs and expenses.
II. Research on Competitors (Established Brands)
"Know yourself and know your enemy, and you will never be defeated." Researching competitors mainly involves learning their strengths, finding their "weaknesses," and shaping your own success factors in their weak areas, or simply to learn and to defeat them.
Product research. Includes research on product categories, product lines, packaging, pricing strategies, etc., to obtain information on product strengths, weaknesses, opportunities, and threats.
Sales model research. Determine whether established brands operate through branch offices (or representative offices), distributors, or agents, to study your own regional sales model and optimize the new brand's sales model.
Terminal network research. Study the types of terminals competitors distribute to, their terminal management level classification, and maintenance management, to serve as a reference for the enterprise's terminal network management methods and strategies.
Product delivery research. Focus on studying competitors' product delivery cycles, time patterns, delivery quantities, and return/refund situations at typical terminal merchants. It is recommended to use sampling methods, selecting typical terminal merchants for research.
Terminal policies. Mainly study competitors' material support, personnel support, and financial support to terminal merchants, to summarize and analyze competitors' policy advantages and defects, and to formulate the new brand's sales policies.
Store displays. Study competitors' shelf (cabinet), floor stack, and end cap displays at large and medium terminal merchants, their display characteristics, and channel gaps, to find display space for the new product, achieve terminal visual merchandising, and create display momentum.
Competitive behavior research. Study competitors' common promotional strategies, advertising strategies, etc., to prepare for preventing competitors from launching containment offensives after the new product launch, aiming for a "hit" at launch.
III. Comprehensive Research
"The sea admits hundreds of rivers, its capacity is great." After studying yourself and competitors, you should find differences that are leading and advantageous relative to competitors, at least theoretically.
Finding channel opportunities. Channel opportunities involve seeking and mining opportunities for the new brand through comprehensive market and competitor research, including channel gaps, advantageous channels, product display, channel models, etc. These could be excellent opportunities for the new brand to enter the market.
Identifying the right channel entry point. Entry is the signal flare for a product entering the market. Excellent enterprises often habitually conduct comprehensive research on new competitors and products, which is a sign of rational management. Therefore, choosing the right entry point, surprising competitors, and creating a good start is crucial.
Building channel competitiveness. Be adept at building the new brand's core channel competitiveness, based on the enterprise's business model, combined with competitors' channel weaknesses and problems, reasonably avoiding potential issues, and adopting a selective approach. This is the premise for building a more stable channel terminal.
Guiding principles for new product launch. (1) Speed wins. Emphasize distribution speed, or a sneak attack launch. Once the product is launched, quickly complete terminal layout, leaving competitors (established brands) as little reaction time as possible. (2) Flanking maneuvers. When necessary, moderately avoid competitors' sharp edges, taking the "curve to save the country" path, not caring about "one city or one land" gains or losses. (3) Integrated operations. Establish integrated terminal marketing thinking, fully integrate terminal resources, and create refined terminals. (4) Win by striking later. "Latecomers surpass the predecessors." There are no latecomers in the market; as long as you find the right method. Therefore, deeply understand the meaning of "development" and "expansion" for the market. (5) Neither humble nor pushy. New product launches emphasize momentum and "one breath," otherwise it is easy to "fade on the second attempt and exhaust on the third." Therefore, fight for what should be fought, dare to challenge competitors, even if they are "big-name" brands. (6) Relationships first. During the new product launch, handle relationships with terminal merchants, consumers, and other business partners, even competitors, to create a good marketing relationship environment.
Formulate the "New Product Launch Terminal Counter-Containment and Counter-'Aggression' Plan." In fact, competitors' "aggression" and containment can be viewed as a crisis for the new brand, so this plan can also be called the "Enterprise Terminal Crisis Plan." Formulating this plan does not mean the end of counter-containment and counter-"aggression" work; on the contrary, it is just the beginning. A plan is, after all, a pre-forecast; during execution, control and adjustment are needed, and after, summary and analysis. This plan should be dynamic and rolling, not static, and can be on an annual cycle.
Below is a sample crisis plan table for a dairy enterprise (since columns like response plan and funding plan are not of greater reference value, they are omitted), for reference only:
Enterprise Terminal Crisis Response Plan
Terminal daily operations may seem calm, but they are full of merchants' open and covert struggles: shelf space disputes, promoter disputes, promotional wars... Unfortunately, the terminal is the "machine" for turning goods into cash, and one must learn to "occupy" and "maintain" it. This is the survival foundation for suppliers. In fact, the best approach to terminal management is to establish a crisis awareness, think ahead about possible crises, and treat them as if they might happen tomorrow.
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