---
title: "Expanding into New Markets in 2018: Here's How"
description: "Distributors aiming to capture a share of a new market must not only strategize their market expansion but also carefully plan product selection and promotion tactics. Generally, developing a new market with new products to establish a stable market involves three stages: single-product breakthrough, forming a product group, and establishing a product structure."
author: "周亮"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2018-02-26"
language: "en"
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# Expanding into New Markets in 2018: Here's How

> Distributors aiming to capture a share of a new market must not only strategize their market expansion but also carefully plan product selection and promotion tactics. Generally, developing a new market with new products to establish a stable market involves three stages: single-product breakthrough, forming a product group, and establishing a product structure.

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Distributors aiming to capture a share of a new market must not only strategize their market expansion but also carefully plan product selection and promotion tactics. Generally, developing a new market with new products to establish a stable market involves three stages.

**Stage 1: Single-Product Breakthrough**

In the early stages of market development, manufacturers and distributors often lack the resources to promote multiple products simultaneously. Therefore, they must rely on the momentum of a single product to create a strong start. A successful single-product breakthrough requires attention to the following:

**(1) Select a mass-market product that can achieve high sales volume.**

The goals of a single-product breakthrough are: first, to establish a sales network—only products with high sales volume can build a comprehensive distribution network; second, to build brand awareness—only high-volume products can have brand influence.

**(2) Implement explosive distribution to achieve market coverage.**

Explosive distribution requires speed, large quantities, and high market coverage. This approach achieves the following: first, it catches competitors off guard, completing distribution before they can react; second, rapid distribution to retail outlets creates momentum, instilling confidence in secondary distributors, retailers, and consumers.

**(3) Offer stable high profit margins to secondary distributors.**

In markets dominated by secondary distributors, especially in townships and below, secondary distributors play a crucial role. Their only incentive to promote unknown new products is profit margin. If the new product does not offer higher margins than other products, it will not pass through the secondary distributors, fail to reach retail outlets, and lose the opportunity to meet consumers.

**(4) Provide strong in-store promotion at retail.**

Established and well-known products can "sell themselves," and consumers often buy them habitually. But how can unfamiliar new products be sold? Primarily through strong recommendations at the point of sale. If retail staff do not recommend the product, manufacturers or distributors must send personnel to conduct in-store demonstrations and sales.

**(5) Run short-term, high-density advertising in regional markets (e.g., county-level markets).**

A common strategy for second- and third-tier brands is to build a strong brand presence in a regional market, giving consumers the impression of a first-tier brand. Since advertising costs in regional markets are extremely low—tens of thousands of yuan can launch a market—it is essential to combine distribution with high-density advertising, using both "push" and "pull" strategies to activate the market.

**(6) Conduct at least three waves of intensive promotional activities within six months.**

Do not expect a single large-scale promotion to fully activate the market. Many new markets fail because of insufficient push. Therefore, three consecutive waves of strong promotion are essential.

**Stage 2: Forming a Product Group**

**(1) Extend new products under the main brand that achieved the single-product breakthrough to alleviate the pressure of over-reliance on the leading product.**

A single product is vulnerable to competitive attacks, and when attacked, there is no effective strategy to counter. Ignoring the attack may harm the market; countering may reduce profit margins. Once a product group is formed, strategic counterattacks become possible. For example, use one product to compete with rivals while others generate profit.

**(2) Enter the market with new products using a "high-open, low-walk" approach.**

Remember, if you follow the typical requests of salespeople and distributors (higher quality, better packaging, lower price, better policies), new product promotion is doomed to fail. To extend the product lifecycle, you must leave enough room—price space. Therefore, new products should enter the market with a higher price.

**(3) Build a "well-known brand" rather than a "well-known product" through the product group.**

If a single product becomes too dominant, it can lead to a situation where the brand is equated with that product, which hinders the introduction of new products. A variety of products under one brand umbrella not only enjoy the protection of the brand but also offer consumers choices—if they are not satisfied with one product, they can choose another.

**(4) A product group also makes it difficult for competitors to launch targeted policies.**

Competitors typically do not attack the entire product line; they usually target the product with the highest sales volume or the greatest threat. If you have only one product, all attacks are concentrated on it, and it may become a casualty. Under a product group, the loss of any single product does not lead to a total collapse.

**Stage 3: Establishing a Product Structure**

A "product group" generally refers to the extension of products within the same price range, while a "product structure" involves extending across different price tiers. Although many companies have succeeded by sticking to a single price tier, a single-tier product structure still poses many problems.

**(1) Structure enables strategy.**

Distributors should regularly combine products strategically to cater to consumers at different levels.

Low-end products can achieve high sales volume but have limited profitability. Their roles are: first, to open distribution channels and achieve market coverage; second, to build brand influence because they have many consumers; third, to spread sales expenses; fourth, to create economies of scale; and fifth, to support the sales team.

Mid-range products offer both sales volume and profit, providing stable cash flow and consistent profits.

High-end products have limited sales volume but high profit margins, enhancing the brand image.

**(2) Markets with a single product or product group are unstable.**

The outcome of single-product competition is either losing money or exiting the market.

**(3) The key to winning price wars (policy wars) is an effective product structure.**

In the Chinese market, price wars in the low-end segment are inevitable, driven by consumer demand and market competition—unless you choose to exit the low-end competition. Distributors must not avoid price competition; they should proactively initiate or embrace price wars. At the same time, they must use price wars to defeat competitors and still make a profit. The only way to achieve both goals is to use profits from mid- and high-end products to support low-end products in the price war.


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