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Terminals are not short of new products, distributors are not short of new products, and consumers are not short of new products. However, if a new product is done well, it becomes a new profit source for the distributor.
Taking on a new product is easy, but making it successful is not that simple. Currently, the survival rate of new products is no more than 15%, especially in the FMCG industry, where it is as low as 5%.
The reasons for such a low survival rate are multifaceted. But from the distributor's perspective, it is largely because the initial performance of new products at the terminal is too poor to gain a foothold; and the shelf space and patience of the terminal are limited, so they cannot afford to wait for the new product to gradually grow.
Moreover, there are plenty of new products waiting to enter the market. If they can survive, they stay; if not, they are quickly removed.
Therefore, how to make a new product gain a foothold and grow at the terminal in the short term is a test of the distributor's capability.
As we all know, achieving efficient operation of new products at the terminal in a short time is not an easy task.
Of course, among the vast number of distributors, there are many hidden talents. Among the distributor friends I have met, there is one such expert in operating new products at the terminal.
The Secret of Boss Hu's Success
Since 1999, the new products handled by Boss Hu of a certain trading firm in Changsha have maintained a survival rate of over 80% at the terminal. Of course, the key point is that these new products achieved short-term survival at the terminal.
It is worth mentioning that these new products that Boss Hu successfully launched at the terminal were not well-known big brands. The manufacturers of these new products could not provide much market expense support, and Boss Hu himself did not invest much money (in my opinion, it is meaningless for a distributor to invest heavily in new products).
Success always has its methods. So, what exactly is Boss Hu's secret to success? And what universal reference value does it have?
Here, I will use a beverage product that Boss Hu successfully promoted in the Changsha market as an example to further illustrate Boss Hu's success.
At the end of 2008, based on the local beverage market conditions and development trends, combined with his own distribution platform, Boss Hu planned to introduce a high-end functional beverage product to further improve his product structure and optimize overall profitability.
After multiple comparisons, Boss Hu chose a foreign-invested beverage company located in Shanghai (Boss Hu proactively approached the manufacturer based on his product structure plan, rather than waiting for the manufacturer to come to him).
This company mainly produces high-end functional taurine beverages and has a certain reputation and market base in Japan, South Korea, and the Shanghai market. However, due to the high price (a small bottle costs over ten yuan, several times that of ordinary beverages), the development of the national market has been slow. Currently, it mainly focuses on first-tier cities like Beijing and Shanghai, and the company does not pay special attention to other markets, naturally providing no special market support. Moreover, since Boss Hu proactively sought cooperation, the manufacturer's support for market launch costs was quite limited.
However, Boss Hu still liked this product and was confident he could make it successful in Changsha. But facing this unfamiliar brand, high-priced product, and limited market investment, how should the market be launched?
After all, if such new products are directly thrown into the terminal without effective market design and left to sell naturally, nine out of ten will fail.
Everything is difficult at the beginning. The key is to make terminal buyers interested in the new product, and the prerequisite for that is to have a beautifully formatted and compelling new product launch plan. Currently, many distributors do not have the habit of creating a launch plan when introducing new products; they just bring samples and price lists, verbally explain the basic situation of the new product, and then start bargaining with terminal buyers over entry fees and display fees.
In fact, from the terminal buyer's perspective, introducing new products without a plan and strategy is a waste of the terminal's limited display resources. At the same time, if a distributor does not even have a plan when applying for new product entry, it shows that the distributor does not pay much attention to the new product. Since the distributor itself does not care about the new product, the terminal buyer will care even less.
However, Boss Hu did very well in this regard. During the new product entry application, he created a PPT version of the new product launch plan for each terminal. The sales staff brought the company's laptop to the terminal's negotiation room, showing the launch plan to the terminal buyer while explaining it.
You know, a launch plan that is illustrated, well-structured, detailed, and supported by data (the more advanced the terminal, the more it values data) is the prerequisite for terminal buyers to become interested in the new product.
Of course, in business, no matter how beautiful the plan is, it is not as attractive as the benefits brought by the new product. In these launch plans for terminals, Boss Hu emphasized the immediate benefits the terminal would gain from this new product.
For the terminal, this benefit is not just money, but also brand enhancement, influence dissemination, customer satisfaction improvement, etc. All these involve the distributor's understanding of the terminal. Only by clearly knowing what the terminal wants can you cater to its preferences. Many distributors do not do well in this regard; they either ignore the terminal's real needs and only make their own demands, or simply think the terminal is only interested in benefits and costs, or attract the terminal with sales profits and expenses, or bargain with terminal buyers over sales expenses.
Boss Hu's launch plan not only included a detailed introduction of the product and the manufacturer, but also the product's development trends and market characteristics, as well as its display and sales status in first-tier cities like Beijing and Shanghai.
In addition, based on a detailed analysis of the local beverage market characteristics, the plan highlighted the product's position in the current terminal sub-category.
This was intended to remind the terminal that introducing this product can not only enrich the terminal's categories and improve the high-end product line, but also cater to the segmented needs of consumer groups, enhance the terminal's product group grade, give consumers more freshness, and further enhance the terminal's leadership in product trends.
Find the Connection Point Between New Products and the Terminal
So, for the majority of distributor friends, how exactly should they design a launch plan that interests the terminal? First, we need to be clear: if you want the other party to value you, you must first value them.
As mentioned earlier, terminals are not short of new products because they face numerous new product entry and promotion proposals from distributors every day. Under normal circumstances, terminals rarely pay special attention to a particular new product. This is because the terminal's focus is not on new products, and the larger the terminal, the more macro and holistic the issues it considers, such as:
- Current entry fees and display fee income;
- How to further expand local market awareness and influence;
- How to further optimize relationships with local government and various functional departments;
- How to further combat competitors;
- How to further enrich product categories;
- How to lead local consumption trends;
- How to improve their event planning capabilities; ...
As a distributor cooperating with the terminal, you must understand what issues the terminal is currently focusing on, so that you can effectively grasp the key points of cooperation with the terminal and further think about the connection points between new products and the terminal's various issues.
Since the terminal uses products as a link to connect with consumers, distributors must carefully find this connection point.
On this basis, design the corresponding narrative to perfectly combine the new product with the issues the terminal cares about, that is, highlight the benefits the terminal will gain from this new product, rather than overemphasizing the distributor's own profits. After all, everyone is in business and first cares about maximizing their own interests.
In addition, most distributors communicate with terminals verbally, rarely in written form (such as written plans). In fact, on the basis of verbal communication, you can also consider submitting written documents, that is, creating a new product entry and promotion plan for the terminal, and clearly explaining the relevant content and plan progress in writing.
Making a written plan is not difficult in terms of cost or technology. The key is that terminals are more corporate than distributors, and they are used to this method. Therefore, to do business smoothly with terminals, you must adapt to their communication style. Furthermore, in ongoing terminal communication, besides routine content, you must also learn to do sales plan reviews with the terminal.
The so-called sales plan review is based on the previously submitted written sales plan, comparing and analyzing the progress of current work, identifying deviations from the facts, analyzing reasons, proposing solutions, and implementing the next specific steps one by one.
In short, making written launch plans and conducting regular plan reviews are not complicated tasks, and they are also methods that terminals are familiar with and easily accept.
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