---
title: "How Can Second-Tier New Products Succeed in a New Market?"
description: "A second-tier new product, Brand C, was previously a strong regional brand, but when expanding nationally, it faced challenges in finding suitable distributors and salespeople. Through innovative tactics like targeting internet cafes and schools, offering gifts instead of discounts, and segmenting the market, the brand managed to survive and thrive in a new city."
author: "张东立"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-07-31"
language: "en"
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# How Can Second-Tier New Products Succeed in a New Market?

> A second-tier new product, Brand C, was previously a strong regional brand, but when expanding nationally, it faced challenges in finding suitable distributors and salespeople. Through innovative tactics like targeting internet cafes and schools, offering gifts instead of discounts, and segmenting the market, the brand managed to survive and thrive in a new city.

Brand C, a second-tier new product, was previously a strong regional brand, mainly producing purified water, fruit juice, and tea beverages. In its headquarters' location, it was a monopoly brand, even surpassing first-tier brands like Wahaha and Nongfu Spring. After years of accumulating capital and experience, it planned to expand nationally. Xiao Zhang, the office manager for Brand C in a city, joined the company in April and arrived in a region with a population of over five million. He had to recruit staff, find distributors, and operate the market from scratch. Since it was already April, the best time for beverage distribution had passed, and it was even somewhat late. However, since he was already there, he had to calmly face the difficulties ahead.
**First: Finding Suitable Distributors**
Anyone with sales experience knows that finding a distributor with good cooperation, a strong network, and substantial strength is ideal. But reality is reality: finding a client is like finding a partner. You might like someone with a good job and financial stability (strong financial resources and network), intelligence (a distributor with a strategic mind), and a good temper (high cooperation). However, even if you fancy them, they might not be interested in you because you're not wealthy (the company's strength is average, or even small), you've just graduated and can't find a good job, or you might even be unemployed (a new product that might succeed but could also fail and die), and your appearance is average (product strength, including price, promotions, and market investment, is not particularly favorable).
So, finding a client is like marriage in reality: you look for someone of similar status or the most suitable match. Of course, there are occasional stories of a princess falling for a poor boy, but married life may not be happy. Often, the bigger store bullies the customer, and the manufacturer cannot control the distributor. Or, if the poor boy develops well and becomes successful, he might find the princess outdated and unable to adapt to social and market development, so he seeks a new love.
Therefore, the principles for finding distributors at that time were: medium strength, a certain network, and a distributor with some strategic thinking. Second-tier distributors of first-tier brands were also acceptable. After a month of terminal visits and door-to-door searches, visits, negotiations, and screening, two potential clients, A and B, showed interest in our company.
A: Quite suitable, with good hardware like capital, warehousing, vehicles, and personnel, as well as software like network and distributor thinking. However, due to long-term business experience, the boss was cautious and hesitant about new products. Additionally, during that period, the distributor was often away on business (this was true, as I had specifically checked to ensure it wasn't an excuse), so the decision kept being delayed.
B: Had a poor network and average financial strength, but could basically meet the needs of our product's purchase and operation. They started as a sit-down merchant and, as that business became harder, wanted to take on a brand. They were eager to handle our product but had poor business acumen. However, they were honest and willing to follow the manufacturer's arrangements.
By then, it was already April, and it was late for beverages. Additionally, the leader hinted that if no client was developed this month, the consequences would be severe.
Should we wait or rush in? If we waited, we might die before achieving our goals, working for others. So, survival came first; let's develop the client first. Later, if the distributor proved unsuitable, we could adjust (this approach was short-sighted; if the distributor was unsuitable and ruined the market, it would be more troublesome than starting a new market. But I was young and inexperienced then. Fortunately, we stumbled and made the market work, but I hope everyone learns from this). However, later, when the product became successful and better distributors were willing to take it on, the regional manager was soft-hearted, feeling it was unfair to drop Distributor B after they had built the market. This thinking is fine for friendship, but being too kind doesn't work in business. For the sake of the market, this could be a mistake because, as the market grew, the distributor's service awareness and delivery capabilities indeed became unsuitable.
Insight: The beverage market is now an industry with deep distribution. Distributors' functions now largely include delivery and warehousing. If the manufacturer's sales support is strong, the standards for distributor selection can be less strict. For second-tier products, especially new ones, it's hard to find distributors with strong networks and strength initially. In that case, it's better to find distributors with less strength but better cooperation and full control by the manufacturer. Survival comes first.
Second: Recruiting Salespeople
The distributor paid, and we waited for delivery. During this time, we needed to recruit salespeople. The base salary was 800 yuan plus commission, which was above average locally, but we couldn't find suitable, hardworking salespeople. We had applicants from Pepsi, Coca-Cola, Huiyuan, Wahaha, and Robust, but they were ambitious but not practical, generally unable to endure hardship, and lacked initiative. They had relied on first-tier brands for too long and had no experience or spirit for new, especially second- or third-tier, brands.
In the end, the five salespeople who stayed long-term and performed well were: one from a factory worker, one who failed in business, two fresh graduates, and one who had briefly worked in another industry. Their common traits: they were steady, hardworking, honest, and could build solid relationships with small terminal shops, treating the owners like friends. From then on, the regional manager only recruited such people, rejecting those who were too smart, highly educated, or from big companies.
Insight: For basic sales positions, good career experience, high education, or high quality are not necessary. Basic sales skills are easy to learn, and abilities and experience can be developed later. So, whether a salesperson has done this before is not important. What matters is whether they are steady, hardworking, have a strong learning ability, can quickly get up to speed, have affinity, and can quickly connect with terminal owners to build good relationships.
Third: Distribution and Digestion
With salespeople recruited and goods arrived, we formulated distribution policies and started. We quickly distributed over half of the distributor's first order, achieving a certain distribution rate. But a significant problem emerged: products were placed in terminals but digested poorly. Since the company had no advertising or consumer pull activities, products couldn't be sold through.
Insight: With favorable distribution policies and repeated visits by salespeople, you can eventually get new products into terminals. But if the product lacks awareness and consumers don't buy, how do you solve terminal digestion difficulties?
Fourth: Solving Terminal Digestion
At that time, the company had no advertising investment. Although it was a first-tier brand at headquarters, it had no awareness here. We assumed it was a second-tier brand aiming for the national market, but in the eyes of terminal owners and consumers, it was just a miscellaneous brand. The company's marketing department was useless, so we couldn't rely on them. There was no advertising, media support, or consumer pull in the regional market. So, whether the product could succeed depended entirely on us.
1. Luring with Profit
In any city, some terminal owners are profit-driven. A one-cent difference per bottle matters to them, and they'll recommend new products to customers. Since second-tier new products are cheaper than first-tier ones, plus the favorable distribution policies, they were attracted. It wasn't really a strong recommendation; we just had salespeople tell these profit-focused owners to say one more sentence: "This brand's water is good, better than Wahaha and Nongfu." Upon hearing this, 30% of customers wouldn't be swayed and would stick to their preferred brands, but 70% would try it. After the first taste, they'd find it good (the quality was indeed good, with a nice taste, and it was the first purified water with a green food label in the country), leading to repeat purchases. There were also cheaper miscellaneous brands, but those companies relied on natural sales with no salesperson visits, while we had regular visits, so terminals didn't lump our water with those.
(Drawback: These profit-driven terminals are fickle. If cheaper water appears, this tactic loses sustainability. It's only suitable for the initial market entry, not long-term.)
2. Moving with Emotion
As mentioned, our salespeople were hardworking, visited frequently, helped owners with tasks, had good affinity, and built strong relationships, even becoming close friends with some owners. Since they were friends, helping sell water was natural, and owners felt embarrassed if they sold little. (To ensure these salespeople truly devoted themselves, we used three strategies: luring with profit, moving with emotion, and binding with rules. I have many insights on this and will share them in a future article.)
(Drawback: Terminal owners sold water largely due to the salesperson's face and friendship. If salespeople changed, it would have a significant impact.)
3. Using Our Strengths to Attack Their Weaknesses, Avoiding Direct Conflict with Big Companies
At that time, first-tier brands focused on circulation and supermarket channels. Directly confronting them there would have been suicidal given our strength and market position.
In this city, besides Pepsi and Coca-Cola, there were Master Kong and Uni-President. These four companies focused on internet cafes and schools, but other beverage companies hadn't paid attention to these special channels. No other beverage salespeople visited these places. Master Kong hadn't launched purified water yet, and Coca-Cola's Ice Dew wasn't a market focus.
So, we had salespeople focus on internet cafes and schools. These places have strong consumption closure, especially internet cafes. Basically, customers drink whatever water is available there. If you're online and want a Wahaha or Nongfu, but the cafe only has Brand C, would you leave to find a store or drink Brand C? The same applies to schools. So, 50% of our sales came from these internet cafes and schools. The city had over 200 internet cafes, and our distribution rate exceeded 90%, with many cafes exclusively selling Brand C. Of course, by 2006, many companies realized the importance of these channels, but Brand C was a pioneer in the local beverage industry.
(Drawback: It was a good tactic then, but as time passes, other companies will follow, so continuous innovation is needed.)
4. Market Segmentation
Similarly, restaurants, KTVs, nightclubs, and other dining and entertainment venues were ignored by beverage companies except for some liquor, beer, and fruit wine manufacturers. These places have special characteristics, and salesperson visits alone weren't effective. Also, the existing distributor mainly handled circulation channels, and serving dining and entertainment venues would involve credit issues. So, we opened two more distributors with relationships in these areas. They could handle entry and payment collection themselves, without even needing salespeople, just a small channel support fee. One focused on KTVs, discos, and nightclubs, and the other on dining channels.
The results were good. With minimal investment, sales weren't huge, only about 15% of total sales, but the impact was significant. Although our products weren't visible in regular circulation and supermarkets, they had high visibility in these dining and entertainment venues, which indirectly boosted circulation sales. More importantly, it raised awareness and reputation, which are the most lacking for new products.
Fifth: Pressing the Advantage
After over half a year of these operations, with the joint efforts of the office team, Brand C survived locally and gained some awareness and reputation. Sales, distribution rate, and visibility reached a good level, but we hadn't achieved the high sales target I envisioned.
At that time, other beverage companies' terminal policies were mostly "buy X get Y free," like 10+1, 20+1, or a few bottles per case. Terminals were used to discounting these offers. Our policy was 17 yuan per case with three free bottles, effectively 15.1 yuan per case. This was lower than Wahaha and Nongfu but similar to other local brands, so it wasn't very competitive. Then, I had an idea: borrow a promotion tactic from the liquor industry—giving gifts. At that time, besides Master Kong and Uni-President giving electric rice cookers for heating tea in winter and freezers in summer, and the two cola companies giving freezers in summer, no other beverage companies gave gifts. So, we set a precedent. We converted the three free bottles into costs (since 17 yuan per case was our own pricing, and the company gave distributors 14.2 yuan per case, we didn't need company support or approval). We used this cost to buy gifts terminals liked: bicycles, electric rice cookers, 7-inch TVs (around 100 yuan), VCD players (around 100 yuan), water dispensers, etc. Terminals could choose what they wanted based on the quantity of water they ordered. Of course, we couldn't tell terminals or even salespeople the actual cost.
This proved highly effective, mainly for stocking. A terminal with good business might sell about 100 cases a month. If they liked the small TV, they'd order 100 cases, filling their warehouse. This also solidified the market foundation, making Brand C a second-tier product second only to first-tier brands like Wahaha and Nongfu.
Second-tier brands may lack awareness and have prices higher than low-end miscellaneous brands, but they have their own advantages. Only through continuous innovation and using different promotional tactics for different markets can you succeed. The greatest asset of marketers is their mind. Marketing is a dynamic discipline. As the old saying goes, "Everyone can perform tricks; the key is the difference in the tricks."
**Editor's PS:** From nearly 1,900 articles published on this public account, I've selected 1,067 and categorized them into 14 major categories and 57 knowledge points, systematically compiling first-line marketing management content into a library for learning. From market to customers, covering practical tactics and management, all are valuable. After following the account, reply with the number "1" to browse the following: Sales Increase Techniques (73 articles), Sales Supervisor Skills (74), Terminal Visit Management (82), Distributor Market Operations (118), Distributor Development (91), Distributor Internal Operations Management (89), Team Management (53), First Lesson for New Salespeople (96), Efficient Distribution Techniques (117), Sales Manager's Eighteen Skills (90), Managing Distributors (47), KA Operations (35), Internet and Brand (47).


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