When companies launch new products with great effort, they often find that despite distributors' willingness to promote them, sales remain sluggish. Where exactly does the problem lie? Misidentifying Target Customer Groups Distributors are accustomed to distributing products broadly through their existing networks, but often overlook that the target customer groups for new products may differ from previous ones. For example, the target customers for mid-to-high-end instant noodles are mainly concentrated in urban areas and economically developed townships, but distributors may distribute to impoverished townships; certain small-pack dry noodles target primary and secondary school students, but distributors may place them in large supermarkets far from schools. As a result, some target customer groups never come into contact with the new products, while unnecessary channels are overwhelmed with inventory. This is usually unintentional on the part of distributors, because they lack the habit of carefully analyzing product characteristics and target customer groups, letting products flow naturally downward. This not only delays the time for new products to enter the growth stage, but also causes a large number of channel returns, dampening distributor confidence, and even leading to product failure. Countermeasures: As soon as a new product is launched, first clarify its positioning and target customer groups, and determine which channels they typically purchase from. Then lock onto those channels for targeted distribution and promotion. For example, for small-pack dry noodles, the ideal channels should be small retail stores near schools. Habitual Errors in New Product Distribution Improper distribution of new products by distributors is often the culprit behind products "dying before achieving success." The main manifestations include: 1. Direct confrontation with strong brands. Many companies launch new products based on competitive strategy, so the new products are similar to competitors' products in positioning, specifications, quality, and price. However, many competitors are already strong local brands with established consumption habits and product pull. At this point, directly distributing new products in the strongholds of competitors will inevitably face strong suppression and difficulty. Countermeasures: "Attack where the enemy is weak, advance when the enemy retreats." In the weak areas and channels of competitors, concentrate superior resources, cultivate key secondary distributors, increase distribution intensity, and turn these into your own strong areas and channels. At the same time, conduct on-site sales and promotional activities in areas where target customers gather, and prioritize providing quality services. When attacking the strong channels of mature brands, companies should concentrate resources to achieve breakthroughs at single points, strengthen competition for outlets where target customers concentrate, divide and surround, and exploit competitors' weaknesses (such as low channel profits or poor service) to gradually penetrate and dismantle them. Companies and distributors must concentrate resources several times that of competitors and be prepared for a prolonged battle. In the early stages of operations, you can disrupt competitors' strong areas and channels to divert their attention and affect their deployment. For example, you can spread rumors of "preparing to attack that area," or selectively increase promotional efforts on competitors' key secondary distributors. 2. Using old product strategies to distribute new products. Many distributors prefer convenience when distributing new products. As soon as new products arrive, they immediately use their existing channels and customer relationships to distribute them along with old products to a few large secondary distributors. Worse, they use credit sales to distribute new products. It should be noted that large secondary distributors generally have good business and are busy selling; mature old products sell without effort, while new products require explanation and have little sales initially. Although new products offer slightly higher profits, distributors do not care about these profits—after all, they are not short of business. After a period, when companies call distributors to inquire about new product sales, distributors will declare the new products dead, citing "products are hard to sell, people don't want them." Countermeasures: New product distribution should follow the pyramid principle: focus distribution on the middle and bottom of the pyramid; the closer to the bottom, the greater the distribution intensity and breadth, and try to achieve cash-on-delivery distribution. For example, distributors should be required to avoid distributing to large secondary distributors and instead focus on small secondary distributors and terminals (especially those close to target customer groups). Small secondary distributors generally have poorer business and more free time, and the relatively higher price difference of new products is attractive to them; while distributing to more terminals increases direct contact with customers. Although downstream channel distribution incurs higher upfront costs for companies and distributors, the market is more solid. Once terminals and small secondary distributors reorder, it will pull large secondary distributors to actively stock up. 3. "Blooming everywhere" among secondary distributors. Some distributors have highly developed and complete networks and hope for a smash hit when launching new products, wanting to "catch all secondary distributors in one net." Coupled with manufacturers' blind pursuit of new product distribution rates, within a few days, new products can be seen everywhere, truly "visible everywhere." In fact, this approach carries significant risks. Secondary distributors want to earn more price differences when prices are not yet transparent in the early stages of new product launch, but once they see new products everywhere, their enthusiasm wanes. If any secondary distributor prematurely cuts prices, others will abandon the new product because prices become transparent too early. As a result, new products exit the market before gaining a foothold. Countermeasures: When launching new products, distributors should use their accumulated experience to judge which secondary distributors are willing to try new products and which are stubborn and only stock up when customers specifically ask. Selectively identify secondary distributors in townships and wholesale markets who like to promote new products, encourage them to actively promote, and once pull is formed, further expand the number of secondary distributors. Extremely Lacking Market Promotion Capabilities Many companies, upon launching new products, immediately assign targets to their sales system: each department must sell a certain number of cases, and then the targets are broken down to each sales representative and distributor. As a result, sales representatives go to the market and praise the product to the skies, while distributors inexplicably take the goods home. The promotion of new products differs from old products; it requires distributors to formulate and implement reasonable promotion plans, such as how to train sales staff, which vehicles and personnel to use for key new product promotion, which channels to distribute to, how to set prices, how to design promotions, and how to conduct assessments. However, many distributors often fail to do this, and market operations are highly arbitrary: prices are set randomly, promotions are given based on personal relationships, and plans are abandoned when they become unprofitable at a certain stage. Even worse, some divert manufacturer support for new product launches to other uses. All these make new product promotion very passive. Countermeasures: Clearly explain the new product's features, positioning, target customer groups, and other relevant information to distributors, help them identify target groups and channels in their regions, and assist them in developing a practical new product promotion plan. If possible, provide centralized training for distributors' sales staff and supervise distributors and their staff in implementing the plan in actual work. Distributors who misappropriate new product promotion funds should be given severe warnings and necessary penalties. The best way to prevent this beforehand is for the manufacturer's sales representatives to write down the plan after discussing it with the distributor, print it out, and personally or supervise the distributor in distributing it to secondary distributors and/or terminals. Ineffective Sales Staff Incentive Plans Many distributors set sales staff salaries either as fixed wages or, when setting sales commissions, do not differentiate between new and old products or between high- and low-profit products. Consequently, sales personnel will sell best-selling old products that do not require much persuasion with secondary distributors. For new products, they may promote them when in a good mood, and some even suggest that distributors should not carry such products. Countermeasures: When launching new products, companies generally provide distributors with much larger profit margins than old products (unless they are sacrificial blocking products). Part of this profit can be used to incentivize sales personnel to actively promote. Manufacturers can also directly provide incentives to distributors' sales staff, such as sales commissions, special awards for new product promotion, or opportunities to be promoted to manufacturer sales representatives. The commission rate for new product sales can be determined based on the profit difference between new and old products and the average industry product profit that distributors can obtain. Generally, a rate of 10% to 50% of the difference is appropriate, as the industry difference is significant. For example, if a distributor takes on a new instant noodle product with a profit difference of 0.5 yuan per case compared to old products, then a commission rate of 0.05 yuan to 0.2 yuan per case is suitable. -END- Content Selection Click on the title below to read directly: [Line Sales Representative Practical Operation Guide (with full PPT download attached)]