Isolation tactics aim to concentrate superior forces to fight a war of annihilation, with core actions including surprise, isolation, severing nerves, and closing the door to beat the dog, thereby breaking into the market. Once the door is closed, one must be confident of capturing and winning.
"Isolation" means closing the door to beat the dog.
New markets are hard to crack! Isolation tactics involve concentrating superior resources for distribution and promotion in markets dominated by competitors, isolating their personnel and products from terminals and consumers, then tightening the market pocket in a certain area and time to close the door and beat the dog, achieving a rapid shift in power.
For example: When Tsingtao Brewery recruited an army of 3,000 salespeople and marched into Beijing, vowing to capture half of the market, years later their market share in Beijing was still less than 25%. Why? Because Tsingtao adopted a comprehensive attack strategy, dispersing their forces and being constrained everywhere. Despite having 3,000 soldiers, they were still overwhelmed by the tide of Yanjing.
In contrast, China Resources Snow Breweries excels at using isolation marketing tactics, growing mushrooms in enemy-occupied territory, using points to drive areas and blooming from the center, making their attacks on new markets highly efficient.
The concept is not hard to understand; the key is how to execute it.
Preparation Actions
Weaknesses of the Strong Enemy
Before using isolation tactics, conduct a comprehensive market survey, compare strengths and weaknesses, and identify the opponent's shortcomings.
Generally, a competitor's mature market will exhibit the following characteristics:
- Products sell well (strength), but often with old faces, old products, and outdated packaging (weakness).
- High natural purchase rate (strength), but prices keep dropping, terminal profits are thin, failing to meet channel member needs (weakness).
- Wide channel coverage (strength), but uneven profit distribution (weakness).
- High product coverage (strength), but wide distribution and high service pressure (weakness).
In a mature market, some channel members will be restless and seek new products; consumers' love for a product has a cycle, with potential demand for upgrades in packaging, quality, and service.
So, by designing our strengths based on the opponent's weaknesses, we can create differentiation:
- Product strategy: Improve packaging, such as using new bottles and boxes for strong visual impact; inject new concepts, adding more functions and claims than competitors to create more selling points.
- Price strategy: Set overall price levels slightly higher than competitors but within acceptable market range, aiming to give channel members slightly higher profit margins than competitors.
- Channel strategy: Let some channel members get rich first! Don't rush to develop a large number of channel members; identify those with strong ambition, give them higher distribution levels and larger management areas, fully leverage their enthusiasm, use quality over quantity, and gradually segment the market.
- Service strategy: While competitors face all regions and consumers, we focus on serving a small area or group, making it easier to highlight service advantages.
In summary, make the market see our product as an upgraded version of the competitor's, more attractive.
Timing of Operations
Choose the transition from off-season to peak season, such as March-April for the beer industry. In the off-season, competitors' defenses are relatively lax, and channel business focus is not yet determined.
Landing Sites
Typically, two types of areas are preferred: either areas with dense sales points, large market capacity, high market influence, and consumer guidance; or areas with low competitor investment and weak distribution.
Also, determine breakthrough areas based on available personnel, e.g., plan for each person to control 20 sales points, with a maximum of 300 sales points per area.
Pre-War Preparation
- Prepare sufficient promotional items.
- Coordinate personnel, route division, and vehicle connections.
- Conduct sales rehearsals, summarizing all product advantages and selling points, preparing answers to likely terminal questions, forming a sales manual for staff to memorize.
- Launch a campaign mobilization to boost morale and prepare for hard work.
The sole purpose: ensure the fastest possible distribution in the designated area.
Three-Step Isolation Approach
Lightning Distribution
Concentrate superior resources for a siege, with careful planning, strong promotions, small target areas, and fast execution.
- Stimulate terminal stocking through high promotions, high profits, and unconditional returns.
Many companies hesitate during distribution investment; if distribution is blocked, they temporarily apply for and negotiate additional promotions, making the process ineffective, wasting time, and hurting morale. Therefore, promotions during distribution must be decisive and irresistible to terminals for effective communication.
- Lightning distribution: Slow distribution gives competitors time to counterattack, so blitzkrieg is the best way to prevent interception.
Typically, complete distribution in the target area within three to five days. In fact, the stronger the competitor, the faster you may be hit, as they often have developed network nerves and rapid response capabilities.
- When distribution reaches over 60%, immediately launch consumer promotions—at 60%, momentum is established, making promotions more impactful. This is the most critical step in isolation tactics.
The purpose of promotions at this stage:
- Pause to consolidate the market, drive sell-through, increase consumer interaction, and boost channel enthusiasm. During promotions, isolate consumers from competitor contact (consumers will buy more cost-effective products).
- Further occupy terminal shelf space and funds, isolating terminals from competitors.
- Create conditions for full distribution; promotions can stimulate terminals that haven't stocked to do so.
Isolation Promotions: Close Combat
During promotions, concentrate more promotional resources and manpower than competitors in limited time and space, preventing competitors from effectively communicating with terminals, unable to follow up promptly, and losing initiative in terminal cooperation during the isolation period.
- Promotions isolate competitors:
Before launching promotions, negotiate with terminals first; promotions benefit terminal operations, so they generally cooperate. We also require: if two competitors run promotions simultaneously, it creates internal friction, so when our product promotes, other products cannot. Due to information asymmetry, terminals usually agree.
To avoid leaking specific promotion times, we deliberately don't disclose exact dates.
When negotiating with terminals, prioritize efficiency; be generous and decisive. If terminals are willing to cooperate, don't haggle over details. For example, if they say free samples don't make money and promotions hurt profits, requiring compensation, agree immediately to compensate for losses. After all, if competitors interfere, it's hard to achieve a quick victory.
Select key terminals to sign long-term incentive agreements, forming our base and isolating competitors.
Use recyclable promotion methods rather than one-time promotions. For beverages in restaurants, offer consumption vouchers for next visit; in communities, set prizes under bottle caps for repeated redemption and purchases.
- Personnel isolation:
Prevent competitor personnel from finding time to communicate with terminals, isolating terminals from competitor salespeople as much as possible, shifting terminal focus to our product.
For example: Q is an old product; manufacturers, distributors, wholesalers, and terminals maintain natural contact through delivery, collection, and casual meetings, with no proactive after-sales service from upstream. Our new product can isolate competitor salespeople like this:
Our salespeople communicate with terminals during business hours, avoiding peak hours and owner rest times, leaving little time. When competitor salespeople finally get a chance to contact terminals, our promoters stay close to the owner, preventing effective communication and seizing communication time.
During promotions, we meet most terminal requests with excellent service, so terminals naturally compare: your gifts, profits, and dedicated service are better than competitors (because we concentrate all promotional resources!). Thus, terminal owners use this as a benchmark, demanding more from competitors. Competitor salespeople, unprepared, often can't meet demands immediately. The owner's smile disappears, salespeople become wary, and relationships naturally cool.
Six Countermeasures: Choking Competitors
When closing the door to beat the dog, once closed, be confident of capturing and winning.
What tactics will both sides use in the above process?
- Competitors immediately follow with promotions.
This is their dominant market; sales are huge, and promotions are costly; if they promote in a local area (like a core commercial street), it will trigger demands for broader promotions. So, they often hesitate. As long as we move fast, we have a chance to capture some terminals.
- Competitors use brand advantage to persuade or threaten terminals with stock cuts or reward deductions to return goods.
Our counter: See through their nature, stabilize terminal psychology, and fully occupy terminal loyalty.
We tell terminals: If you return our goods, competitors will no longer value you! When we weren't here, their service was poor! They didn't help you earn more! If you need competitor products, we can help adjust; if they cancel rewards, we can compensate! Our only goal: everyone earns together, jointly build the market...
- Competitors pay more—exchange or buy back goods.
Our counter: Immediately replenish more stock, tell terminals our goods are valuable, earning more without selling, encouraging more stocking—competitors often find the more they collect, the more terminals stock; simultaneously, we can record their unfair competition with audio/video, complain to industry and commerce authorities; and through channels, warn competitors: if they use such dirty tricks again, we'll retaliate by dumping goods, cross-region selling, disrupting their market order.
- Competitors use promotions to force stock.
Our counter: Persuade against their stock pressure, enhance terminal communication.
We tell terminals not to stock: We're using a three-dimensional attack; as long as promotions continue, competitors will fear us more and desperately want to quell market turmoil, so they'll keep increasing promotions! You'll see, in a few days they'll have even bigger promotions; stocking now is a loss! There's cheaper stock elsewhere!
During competitor promotions, we use frequent small deliveries to enhance communication and help terminals digest faster, with better results.
- Competitors rush and raise prices on old products.
This usually fails. Without product changes, forced price hikes face consumer opposition and channel/terminal resistance; typically, distributors or terminals won't be the first to raise prices; if one refuses, others fear losing customers and won't lead either.
- Competitors send personnel to disrupt.
Our counter: This is extreme unfair competition; collect evidence and send legal warnings like lawyer's letters, resolving through legal channels.
Defend and Expand Results
An isolation marketing area grows in three stages!
The first stage is strong introduction, including high-speed distribution and promotions, completed within 20 days. If successful, terminals gain confidence in our product, consumers get close understanding, and the product has a relatively good growth environment.
The second stage is stabilizing results and services, evaluating products, terminals, and consumers, summarizing experiences, deepening services, taking about 10 days.
The third stage relies on repeated promotional reminders to stimulate new terminal enthusiasm and launch new consumer interactions.
At each stage, competitors may constantly harass (the six countermeasures above are common), but we concentrate superior resources and all manpower in a smaller area, already in a strong position; as long as we counter each move, we can break their encirclement and sweep.
The isolated area is limited, but its impact, confidence, and communication effects are enormous. When the first isolation area reaches the second stage, we can replicate and develop a second isolation area. By ensuring local superior resources and teams, we can plant one mushroom after another, develop piecemeal base areas, and establish a challenger position in the market.
Once consumers in the isolation area accept the product, consumer pull forms, which is unstoppable.
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Excerpt from "Terminal Visit Sales General Model"
September 10, 2015 20:00--21:00
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