Distributors seeking a share of a new market must not only strategize their market entry but also carefully plan product selection and rollout. Generally, developing a new market with a new product to establishing 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, so they rely on the momentum of a single product to make 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 build a sales network, which only a high-volume product can accomplish; second, to build brand awareness, which only a high-volume product can achieve.

(2) Execute explosive distribution to achieve market coverage.

Explosive distribution requires speed, large quantities, and high market coverage. This approach can: first, catch competitors off guard, completing distribution before they can react; second, create momentum in retail outlets, boosting confidence among secondary distributors, retailers, and consumers.

(3) Offer high profit margins to secondary distributors to secure their cooperation.

In markets where secondary distributors dominate, especially in townships and below, they play a crucial role. The only incentive for them to promote an unfamiliar new product is profit margin. If the new product does not offer higher margins than existing products, it will not pass through the secondary distributors, fail to reach retail outlets, and miss the chance to meet consumers.

(4) Provide strong in-store promotion.

Established and well-known products can sell themselves, and consumers often buy them out of habit. But how can a new product that consumers are unfamiliar with be sold? It relies on strong recommendations at the retail level. If retail staff do not recommend the product, the manufacturer or distributor must send personnel to the stores to act as sales promoters and conduct point-of-sale selling.

(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 top-tier brand. Since advertising costs in regional markets (like county-level markets) are very low, even a few tens of thousands of yuan can launch a market. Therefore, while distributing the product, it is essential to combine high-density advertising with distribution, using both "push" and "pull" strategies to activate the market.

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

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

Stage 2: Forming a Product Portfolio

(1) Extend new products around the main brand that has achieved a single-product breakthrough, to reduce 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 can harm the market, while fighting back can reduce profit margins. Once a product portfolio is formed, it can be used for strategic counterattacks. For example, use one product to compete with rivals while other products generate profits.

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

Remember, if you follow the typical demands of salespeople and distributors (higher quality, better packaging, lower price, better policies), the new product is doomed to fail. To extend the product's life cycle, you must leave enough room for maneuver—specifically, 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 portfolio.

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 portfolio of products under one brand umbrella not only enjoys the brand's protection but also offers consumers a choice—if they are not satisfied with one product, they can choose another.

(4) A product portfolio 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 a single product, all attacks are concentrated on it, and it may become a casualty. With a product portfolio, the loss of any one product does not lead to a total collapse.

Stage 3: Forming a Product Structure

A "product portfolio" generally refers to an extension within the same price tier, 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) Only with a structure can there be a strategy.

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

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

Mid-end products offer both sales volume and profit, serving to generate stable cash flow and consistent profits.

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

(2) A market with a single product or a product portfolio is unstable.

The outcome of competing with a single product 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 characteristics 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 make money. The only way to achieve both goals simultaneously is to use profits from mid- and high-end products to support low-end products in the price war.