---
title: "Market Insight: Fake Growth in Regional Markets, Have You Fallen for It?"
description: "Based on the contribution rate of regional markets to the enterprise and the size of resources invested by the manufacturer, markets are generally divided into penetration markets, opportunity markets, growth markets, mature markets, and marginal markets. Different types of markets have different growth index requirements at different times. Penetration and opportunity markets generally seek point breakthroughs, starting from a single channel—perhaps KA, catering, traditional circulation, or group buying—and a single small regional unit, which might be a few core terminals, a street, or a town."
author: "醉行者"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2017-01-24"
language: "en"
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# Market Insight: Fake Growth in Regional Markets, Have You Fallen for It?

> Based on the contribution rate of regional markets to the enterprise and the size of resources invested by the manufacturer, markets are generally divided into penetration markets, opportunity markets, growth markets, mature markets, and marginal markets. Different types of markets have different growth index requirements at different times. Penetration and opportunity markets generally seek point breakthroughs, starting from a single channel—perhaps KA, catering, traditional circulation, or group buying—and a single small regional unit, which might be a few core terminals, a street, or a town.

Based on the contribution rate of regional markets to the enterprise and the size of resources invested by the manufacturer, markets are generally divided into penetration markets, opportunity markets, growth markets, mature markets, and marginal markets. Different types of markets have different growth index requirements at different times.
**Penetration and opportunity markets generally seek point breakthroughs, starting from a single channel**—perhaps KA, catering, traditional circulation, or group buying—and a single small regional unit, which might be a few core terminals, a street, or a town. **Growth markets seek line breakthroughs, quickly expanding from line to area.** Distributor cooperation has passed the磨合期 (running-in period), team morale is high, core terminals are prominent, popularity is heating up, event marketing follows, and a strong sales atmosphere is created. Mature markets focus on heating up popularity, expanding and consolidating channel breadth and depth, optimizing product structure, and improving market profit contribution and the manufacturer's overall control of the market.
**Different market types naturally require different approaches. Neither can we be impatient for quick success and overreach, nor can we sit idly and wait for opportunities. We must adapt to market changes, step by step, and gradually improve. Facing the unpredictable market and fierce competition, many enterprises and professional managers pursue growth for growth's sake, causing market pseudo-prosperity and subsequent weak growth.**
**Fake Growth in Regional Markets #1:**
**Sales growth achieved by over-depleting enterprise resources**
Brand resource dilution—Strong brands use brand endorsement to continuously develop exclusive products to fill market gaps. Developing exclusive products is not bad in itself, but distributors of exclusive products often pursue high profits and returns, typically choosing high-appearance packaging and low production costs to meet the needs of high-promotion, high-sales operations. Manufacturers, not needing to invest in the market or manage it, and with quick payment collection, turn a blind eye. Both national and local strong liquor brands have experienced this. The downside is over-development of products, blurred consumer choices, and because production costs are too low, brand power is diluted, changing consumers' perception of the brand, reducing loyalty, and shifting purchase intentions.
**Sales growth achieved by over-depleting enterprise resources**
Blindly over-depleting market promotion resources—Increasing channel promotions and consumer promotions to stimulate distributors to stock up, without being responsible for sell-through. Sales figures rise linearly, but distributors' warehouses are full of inventory, terminals have sluggish sales, products pile up, and a host of problems remain later.
**Fake Growth in Regional Markets #2: Expanding territory to grab sales, robbing Peter to pay Paul, like a monkey picking corn, dropping one while picking another.**
Overall regional sales rise, but analyzing by unit, the main products or a certain price band in the original mature market are declining. The truly mature market has not solidified the market position of mainstream price band products, and product structure upgrading is incomplete. Consumer loyalty and activity are not reinforced, but new blank areas are being developed vigorously, expanding territory to compensate for the decline in the main sales area, making the overall report look perfect.
**Fake Growth in Regional Markets #3: Flourishing branches and leaves, but few fruits.**
Sales are impressive, but profits are poor. Product structure is unreasonable. The enterprise's profitable products don't sell, while non-mainline products flow smoothly. Once competitors enter with resources, occupying price bands with high-profile strategies, the defense is weak. The enterprise lacks stamina in that regional market and has weak造血能力 (self-sustaining capability).
**Fake Growth in Regional Markets #4: One mother, countless children.**
The market lacks a big single product. Instead, new products are constantly developed with high-profile launches, or they are born but not nurtured. One after another, like a revolving door, but ultimately no single product occupies a place in consumers' minds, and no product represents the brand.
**Fake Growth in Regional Markets #5: The China hand, running around everywhere.**
The foundation of the regional market is unstable. Distributors obtain enterprise funds or squeeze their own profits by relying on low-price cross-regional dumping to plunder the fruits of mature markets. This is usually done in collusion between manufacturer personnel and distributors.
**Fake Growth in Regional Markets #6: Patchwork and random changes, messing with models.**
Normal market operation methods and routines are considered slow and troublesome. Whatever is popular—whether online, direct selling, MLM, community, platform, etc.—they adopt it all, always trying something. An enterprise, brainwashed by so-called marketing gurus, forcibly binds traditional products with MLM tactics.
**Fake Growth in Regional Markets #7: A fickle lover, loving one after another.**
Blindly recruiting distributors by dismantling product lines, constantly tempting with policies and phantom promises, painting rosy pictures, but only caring about birth, not upbringing. Generally, the first order is the last. With a 'eat, drink, and be merry today' mentality, success is purely accidental, failure is inevitable, and it's up to the distributor's luck.
Performance is king, growth first. Whether manufacturers or professional managers, they should view sales growth rationally. Without rational market research, blindly pursuing sales growth will inevitably make the organization go all out, using every trick, following the trend of exaggeration. No death, no die. As the saying goes in the world: 'What goes around comes around. Cherish what you have.'
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