Click to read the original article for details. What is a blockbuster product? A product that is top-selling, stable in quality, well-reputed, continuously hot, and with a rising market share. A blockbuster is the 1, marketing is the 0; once you secure the agency for a blockbuster, you can just count the money. A blockbuster can compensate for a distributor's overall weaknesses; what strength, what network, what customer relations, what team—all are vulnerable in the face of a blockbuster. In the past, it was the era of "brand supremacy," where products from brand companies usually sold well. Now it's the era of "blockbuster supremacy," where as long as it's an ultimate single product with explosive word-of-mouth, it sells well regardless of brand! A distributor's social status and influence are determined by the brands they represent: those representing well-known brands are usually large distributors. A distributor's growth speed depends on whether they "snag" a blockbuster; if they do, growth is rocket-speed, and a small distributor can become a large one within a year. If they miss out, growth is snail-speed, even if they represent well-known brand products. When blockbusters appear on the market at the same time, why do some distributors secure the agency and rake in profits, while others miss out? 1. Decision-Making Misalignment Strategic issues must be decided by a few top executives and executed by the majority at the grassroots level, not decided by the majority at the grassroots and executed by a few top executives. Weapons determine the outcome of modern warfare; products determine a distributor's social status. What weapons to use for what battle is a strategic issue; similarly, product selection is a strategic issue for a trading company, and strategic issues must be decided by top management. But many distributors delegate strategic decision-making to grassroots operational marketing staff or even delivery drivers. Seeking grassroots opinions on strategic issues and letting employees decide strategic issues is not democracy; it's stupidity! They euphemistically call it: letting those on the front line who hear the gunfire make decisions. "Boss, we went down to research, and the second-tier distributors don't see this product favorably; this category doesn't exist in the market, so the risk is high." "Boss, the top brand in this category, Doudouben, advertises daily but doesn't move; can Tianshi Soy Milk move? I don't recommend taking it on." "Boss, there are too many competitors in this category; it's hard to do if we take it now." Thus, many business opportunities and blockbuster sales opportunities are lost in this democratic decision-making process. When delivery drivers and grassroots delivery staff can make strategic decisions for the company, do you think you, as the boss, still have value? When even delivery drivers and grassroots delivery staff think a new product is good, do you think you still have a chance to secure the agency? When even delivery drivers and grassroots delivery staff think taking on a new product is a business opportunity, do you think it's still an opportunity? Strategic issues must be decided by a few top executives and executed by the majority at the grassroots, not decided by the majority at the grassroots and executed by a few top executives. Management can be democratic, but it must be centralized; democracy without centralization is pseudo-democracy. Bosses must remember: Those who achieve great things do not consult the masses! 2. Misplaced Focus Even best-selling first-tier brands may have markets with poor sell-through. For example, Master Kong's Braised Beef Noodles are very strong north of the Yangtze River but relatively weak south of it; Lulu Almond Milk is the top brand in almond-based plant protein drinks, but its distribution rate is very low in East and South China, and even where distributed, sell-through is slow. This is closely related to the company's market strategy and strategic implementation. Even best-selling first-tier brands may have large sales in some markets and small sales in others within the same region. Even adjacent markets in the same region may see some selling well and others poorly. This is directly related to the distributor's operational capabilities. For example, Doudouben, launched in April 2017, achieved annual sales of 1 billion yuan. Among beverages launched in 2017, how many reached 1 billion in their first year? Only this one! Yet some distributors still dared not to grab the Doudouben agency. Why? Because their focus is misplaced. They don't ask distributors in fast-selling markets whether the product is worth taking on; instead, they ask distributors in slow-moving markets whether the product can sell. Ask successful distributors, and they'll teach you successful experiences. Ask failed distributors, and you'll get failed experiences. Your focus is not on fast-moving markets but on slow-moving cases. Misplaced focus leads to losing the agency for best-selling products. 3. Judging a New Product Dead During the Promotion Period With the abundance of products, supply-demand relationships have changed dramatically, and it's rare for a new product to sell well immediately upon launch. It takes at least six months from launch to bestseller status. The first month is trial sales, the second is distribution, the third is restocking, the fourth and fifth are digestion, and the sixth forms a positive cycle. These six months are also the process of consumers moving from awareness, trial purchase, liking, to habitual buying. Red Bull entered China in 1995 but only exploded in 2005; Yangyuan's Six Walnuts launched in 2003 and became a blockbuster in 2008. Chundong's coated chocolate cake launched in 2014 and became the category blockbuster in the second half of 2015. Peppa Pig launched at the end of 2014 and became a blockbuster in 2016. Every company dreams of a product being a blockbuster from launch, but that's impossible in real product promotion. Many distributors, after taking on a new product, expect it to sell well immediately after distribution; once sell-through is slow, they immediately sentence the new product to death. Before sentencing a product to death, ask yourself a few questions:
After distribution, does the product match the channel? A BMW is great, but can a 4S store in a rural area sell?
Has the distribution network reached the minimum number of outlets (100)? Has standard display been done?
After display, have promotions and roadshows been done? Static display attracts consumer attention; dynamic promotion entices consumer purchase. 4. Waiting Until It Sells Well Before Taking It On In business, distributors focus on two things: 1. Profit. 2. Risk. The ideal state: high profit, low or no risk. Taking on a new product has both profit and risk; risk always accompanies profit. But too many distributors want high profits without bearing the risk of new products. They always wishfully think: I'll take it on once it sells well. The question is: when it sells well, will you still have the chance to take it on? You didn't help conquer the world, but you want to claim credit when it's done—is it that easy? When a product sells well, the only way you can get the agency is if prices are transparent and there's no profit. Taking on a product is like raising a child; if you don't raise it when it's young, when it grows up, will it recognize you? After 2008, with changes in supply and demand, no product became a blockbuster immediately upon launch. Product strength + marketing strength = blockbuster. There are six criteria to judge product strength: 1. Excellent quality 2. Attractive packaging 3. Clear selling points 4. Reasonable channel pricing 5. Technical barriers 6. Good category trend When you encounter a product meeting these criteria, boldly grab the agency. Then it's time to compete on marketing strength. Marketing strength mainly competes on: team combat effectiveness, terminal distribution rate, follow-up visit rate, display, promotion, etc. If the product has blockbuster genes but your marketing strength lags, then the product will be a blockbuster in others' markets but stagnant in yours. Source: Yingxiaoli (yingxiaoli888) New Distribution will hold the 2019 (5th) FMCG + Internet Conference during the Chengdu Spring Sugar and Wine Fair from March 15-18. This conference will focus on the theme "Breakthrough" , with in-depth discussions among brand owners, supply chain service providers, distributors, retailers, and others. Compared to previous conferences, this summit will be fully upgraded. In addition to original topics like channel innovation, city distribution logistics, and distributor transformation , it will add parallel forums on new marketing cases, IP + FMCG empowerment, community group buying, and innovative retail . Through three days of ten high-density, high-quality expert sharing sessions, we believe every brand owner and distributor can learn the latest business models, expert insights, and practical methods, finding new tools and approaches for their own breakthrough in 2019, and returning to a path of high-speed growth. Review of Previous Conferences -END-