---
title: "How to Win the \"Blocking Battle\" Against Competitors at the Terminal!"
description: "In the context of booming categories and brands in the FMCG industry, distributors face intensified competition. To make products \"run faster\" than competitors in increasingly open terminal markets, distributors must win every \"blocking battle\" against competing products at the retail terminal."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2014-05-31"
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# How to Win the "Blocking Battle" Against Competitors at the Terminal!

> In the context of booming categories and brands in the FMCG industry, distributors face intensified competition. To make products "run faster" than competitors in increasingly open terminal markets, distributors must win every "blocking battle" against competing products at the retail terminal.

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Amid the continuous prosperity of categories and brands in the FMCG industry, distributors not only have more agency options but also must accept the reality of intensified competition—small market areas, countable consumer groups, minimal manufacturer support, and virus-like expansion of competitor teams. This makes many distributors increasingly frustrated in the battle for terminal markets! To make products "run faster" than competitors in increasingly open terminal markets, distributors must win every "blocking battle" against terminal competitors!

**What is a competitor? Don't say you know!**

The first step in blocking competitors is to identify them. Which products you identify as competitors determines your later market operations. Generally, distributors often target competitors among other brands in the same category, such as locking onto Red Bull for functional drinks or Yangyuan for plant-based protein drinks.

Actually, this classification method is not comprehensive. The definition of competitors is divided into narrow and broad senses: Narrowly, competitors are products in the same category, such as Pepsi and Coca-Cola in carbonated drinks, Mengniu and Yili in dairy, and Hsu Fu Chi and Alpenliebe in candy. Broadly, competitors refer to competition for resources. For example, Yangyuan's Six Walnut drink, as a beverage, may have competitors in dairy, fruit juice, carbonated drinks, etc.; as a plant-based protein drink, its competitors might be almond milk, peanut milk, etc.; and as a gift, its competitors could be health products or other boxed gifts.

Therefore, competitors are not only similar products but also other products that compete for resources.

**Retail terminals: the main battlefield for blocking competitors**

Simply put, market competition occurs wherever consumers decide to buy products, such as supermarkets, mom-and-pop stores, gas stations, restaurants, ice stalls, barbecue stalls, etc.—that is, various retail terminals. Therefore, our interception of competitors also occurs at retail terminals.

According to a survey by AC Nielsen, 70% of consumers entering hypermarkets know exactly which products they want to buy, but 60% do not know which brand to buy. The remaining 30% who don't know what to buy, and the 60% who don't know which brand, need our consumer guidance. In today's increasingly open stores, we need to do a good job of blocking competitors.

Building competitive advantages at the retail terminal level is the core of terminal competitor blocking. To do this well, follow these three steps: First, clarify the basic ideas and methods of market competition; second, find market opportunity points and choose appropriate competitive strategies; third, flexibly apply common competitive strategies for blocking competitors.

**Blocking competitors: maintaining relative advantage is key**

There are two common strategies for blocking competitors: attacking weaknesses with strengths and striking at competitors' weak links. The former requires distributors to strengthen and consolidate their own advantages, using them to attack the weak, suitable for positional warfare, concentrating strong "forces" to strike competitors. The latter involves eliminating threats by attacking competitors' weak links! Suitable battles include guerrilla warfare and mobile warfare; we seek opportunities through movement.

It is worth noting that whether strong or weak, one must establish a relative advantage to win. This advantage refers to both overall advantage and relative advantage in local areas. For example, in the early stage of the Chinese Civil War, our party was at a disadvantage on the whole battlefield but had advantages in local markets, and by continuously replicating this advantage to other regions, eventually achieved "a single spark can start a prairie fire."

Based on the above basic strategies, we propose the "left and right fist" competition law:

**Left fist—change the competition rules (lure the snake out of its hole).** That is, by changing the game rules, make it difficult for competitors to leverage their advantages, thereby reversing the market competition situation. For example, if second- and third-tier brands use price wars to disrupt the market, responding with price cuts will not only fail to strike competitors but may also damage our product's price order. In such cases, we can only change the competition rules, which must be favorable to us and turn competitors' advantages into disadvantages. At this point, we can use display buyouts, professional buyouts, etc., to respond to competitors, thereby changing the competition rules. In fact, many big brands use terminal buyouts to achieve market "expulsion" of small brands.

**Right fist—strike the opponent's vital point (hit the snake at seven inches).** That is, find opportunity points, concentrate limited resources on these "vital" points (opportunity points), and use the simplest marketing tactics, repeated, to gradually strike competitors! For example, if competitors have only a few popular quality outlets, and other outlets are not profitable or even losing money, we can use terminal relationships, display buyouts, consumer promotion pulls, etc., to break into their quality terminals. When products have no sales, they will only exit the market after losing money for a while.

**The terminal has its own beauty, the terminal has its own golden house**

After determining the strategy and methods for striking competitors, the next step is to find opportunity points. Opportunity points are competitive turning points or marginal points—points beyond which profits or other aspects reverse. For example, marginal sales volume: below this volume, losses occur; marginal cost: if we raise the display cost at terminal stores to its marginal cost, competitors' profits will be limited; and market marginal price, marginal expenses, etc., are all opportunity points. When setting the cost of terminal display buyouts, we also analyze these.

The optimal cost point is one that turns the scale advantage of strong enterprises into a scale burden and makes the attack weapons of weak enterprises ineffective. For example, if a weak enterprise attacks us with a price war, our scale advantage becomes a disadvantage. At this point, the strong enterprise should use display buyouts, exclusive buyouts, etc., to strike the weak, making their attack strategy ineffective.

However, in reality, many distributors are desperately seeking opportunities. Here, I suggest distributors use the "microscope" principle to find market opportunity points. As the saying goes, "Under the macro, there's nowhere to start; under the micro, opportunities are everywhere." What we need to do is pull competitors under the "microscope" to observe, find their weaknesses and our opportunity points. The specific method is for distributors to personally go to the front-line market, through investigation and communication with the terminal market, understand the real situation, and seek "opportunities for battle."

**Analysis of common competitor blocking techniques**

After extensive practical summaries, terminal buyout, display buyout, warehouse crowding and capital occupation, and promotional strikes are the most effective methods for blocking terminal competitors. Below, we introduce each method's target terminal types and their balancing effects on competitors.

**Terminal buyout method.** This method is suitable for buying out our quality terminals, potential terminals, and competitors' quality terminals. After the buyout, use our advantageous resources to strike competitors' major customers; use our high turnover rate at these terminals and fixed-cost buyouts to prevent competing brands from entering, forming exclusive operation of this category in such terminal stores.

**Display buyout method.** This method mainly targets quality terminals that cannot be bought out, as well as other terminals except poor-quality ones. This method is suitable for brands with high visibility in the same category. Because of strong brand influence, as long as there is display, there will be purchases. After buying out the display, use the product's high brand power, self-purchase rate, and display to strike competitors. At this point, distributors need to ensure terminal inventory and display to prevent stockouts.

**Warehouse crowding and capital occupation method.** This method can be used to strike competitors' quality terminals, weak areas, and channels. Specific measures include using high-intensity promotions such as gifts with this product, gifts with other products, and immediate rebates to stimulate terminal purchasing enthusiasm, occupy terminal customers' cash flow and warehouses, leaving no opportunity for competitors to enter these terminals, "depriving" them of market sales opportunities.

Here, it is important to remind that in addition to channel promotions during the peak sales season, promotions in the off-season are also important because many terminals extend their purchase cycles during the off-season. Therefore, we should try to use promotions to encourage terminals to stock more, so that even if terminal sales decline in the off-season and they don't restock, it doesn't matter.

**Practical case sharing of terminal competitor blocking**

**Case 1:**

A distributor's mature market is constantly harassed by small brands with low prices, using continuous price cuts to attack its important terminal customers, causing serious loss of core customers. How should this distributor respond?

**Suggested plan:**

Step 1: Conduct a detailed market investigation of competitors to understand the real situation, such as which channels and targets (consumers or channel dealers) the competitor's price promotions mainly target, promotion intensity, promotion time, region, and different policy levels for different customers (different levels of promotional policies). The purpose is to find a breakthrough for our market turnaround plan.

Step 2: Identify the competitor's quality terminals.

Step 3: Develop a counterattack plan and implement point-to-point strikes (at second-tier distributors, terminals, consumers) to eliminate competitors while consolidating our major customers. If the competitor adopts channel promotions, channel customers will be fully stocked. What should we do in this case? At this point, it is not suitable for us to conduct channel promotions because terminal funds and warehouses are limited. Even with stronger channel promotions, it is difficult to persuade terminals to pay and stock more. At this time, we should focus on consumer pull promotions, such as buy one case get one free, scratch cards, and passing benefits to consumers, to pull consumers to buy our products, causing competitors' inventory to accumulate in terminal warehouses, leading to slow sales and expiration.

Step 4: Execute the counterattack plan.

**Case 2:** In a distributor's model market, several second-tier brands A, B, C, etc., successively cut prices for promotions. The distributor has limited resources. After responding to A's promotion, B starts market attacks, and then C's price cuts and clearance sales. The originally well-run market is always in a passive state of exhaustion. Although sales have not declined, profits have disappeared. How should this be handled?

**Suggested plan:**

At this time, the most taboo is blind response—attacking whoever cuts prices, which eventually exhausts our energy and lets competitors "succeed." In this situation, do not treat all brands as competitors. Instead, identify the core customer, i.e., the largest competitor in the same category, concentrate advantageous resources to attack the core competitor, and while striking the biggest competitor, achieve balance against other small brands.

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