After visiting 100 distributor markets across the country, the author's biggest impression is that distributors have indeed changed. The reasons for this change are mainly two-fold. First, the macro environment and the trends of the times; second, the micro environment of intense market competition. These two reasons have led most distributors to start intensive cultivation of their markets, no longer overly relying on manufacturers.

So in the real, fiercely competitive environment, what else do distributors need besides participating in competition? They need a stable market! A stable market brings stable sales, stable market share, and stable profits.

When a distributor operates a new product and is about to enter competition, we can compare this to the "infant growth law." That is, the process from developing a new product market to forming a stable market can be divided into three stages, just like raising a baby: first "crawl," then "walk," and finally "run."

"Infant Growth Law" Stage 1: Crawl (Single Product Breakthrough)

Generally, in the early stages of market development, manufacturers and distributors cannot simultaneously promote multiple products, so they must rely on the momentum of a single product to create a good start in the market. A single product breakthrough requires the following:

First, select a mass product that can achieve high sales volume. The purpose of a single product breakthrough is, on one hand, to form a sales network—only products with high sales volume can build a comprehensive sales network; on the other hand, to build brand awareness—only products with high sales volume have brand influence.

Second, explosive distribution to achieve market coverage. Explosive distribution requires speed, large distribution volume, and high market coverage. It can achieve the following effects: first, catch competitors off guard and complete distribution quickly before they can introduce policies; second, rapid distribution at the terminal creates momentum, giving confidence to secondary wholesalers, terminals, and consumers.

Third, stable high-profit incentives for secondary wholesalers. In markets dominated by secondary wholesalers, especially in townships and below, secondary wholesalers play a crucial role. The only motivation for secondary wholesalers to promote unknown new products is profit margin. If the new product does not offer a higher profit margin than other products, it will not pass the secondary wholesaler hurdle, and the product will not reach the terminal, thus losing the opportunity to meet consumers.

Fourth, strong terminal merchandising. Old and well-known products can "sell themselves," and consumers often buy habitually. How can new products that consumers are unfamiliar with be sold? Mainly through strong recommendations at the terminal. If retail terminal staff do not recommend, the manufacturer or distributor must send personnel to the terminal for merchandising.

Fifth, short-term high-density advertising in regional markets (e.g., county-level markets). A common strategy for second- and third-tier brands is to become a strong brand in a regional market, giving consumers the image of a first-tier brand. Since advertising costs in regional markets (e.g., county-level markets) are extremely low, a few tens of thousands of yuan in advertising can activate a market. Therefore, during distribution, high-density advertising should be used to "push" and "pull" the market simultaneously.

Sixth, conduct at least three waves of strong promotional activities within six months. Do not expect a single large-scale promotional event to fully activate the market. Many new markets fail at launch due to insufficient push. Therefore, three consecutive waves of strong promotion are essential.

"Infant Growth Law" Stage 2: Walk (Forming a Product Group)

First, extend new products around the main brand that has achieved a single product breakthrough, to share the pressure of the dominant product's high proportion. A single product is vulnerable to competitor attacks, and when attacked, there is no effective strategy to counter—if you ignore the attack, the market will be affected; if you counter, profit margins will decline. After forming a product group, you can use it for strategic counterattacks. For example, use one product to compete with competitors while other products generate profit.

Second, new products should enter the market with a "high open, low walk" approach. Remember, if you follow the typical requests of salespeople and distributors (higher quality, better packaging, lower price, better policies), new product promotion is doomed to fail. To extend the product life cycle, you must leave enough room for retreat—price space. Therefore, new products should enter the market with a higher price.

Third, through the "product group," form a "well-known brand" rather than a "well-known variety." If a single product is too strong, it can lead to the phenomenon of "brand equals variety," which is an obstacle to promoting new products. Multiple varieties under one brand umbrella can enjoy the protection of the umbrella while providing consumers with choices—if they are not satisfied with one variety, they can choose another.

Fourth, the "product group" also makes it difficult for competitors to introduce targeted policies. Competitors generally do not attack the entire product line; they usually choose the variety with the largest sales volume or the greatest threat. If the product is single, all attack power is concentrated on one product, which may become a sacrifice. Under a "product group," the sacrifice of any product will not lead to a total collapse.

"Infant Growth Law" Stage 3: Run (Forming a Product Structure)

A "product group" is generally an extension of products at the same price level, while a "product structure" is an extension across price levels. Although many companies have succeeded by sticking to a single product level, especially high-end products like high-end clothing, this strategy may be effective. However, in the mass consumer goods field, a single-level product structure still has many problems.

First, only with a structure can there be a strategy. Companies should regularly combine products strategically to meet 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 form market coverage; second, to build brand influence because low-end products have many consumers; third, to share sales expenses; fourth, to create economies of scale; fifth, to support personnel.

Mid-end products have both sales volume and profit, and their role is to form stable cash flow and stable profits.

High-end products have limited sales volume but high profit margins, and they can shape the corporate image.

Second, a market with a single product or product group is unstable. The outcome of single-product competition is either losing money or exiting the market.

Third, the key to winning price wars (policy wars) is an effective product structure. In the Chinese market, price wars in low-end products are inevitable, determined by consumer demand characteristics and market competition—unless you exit the low-end competition. Companies must not avoid price wars; they should proactively initiate or embrace them. At the same time, they must defeat competitors in price wars and make money from them. The only way to achieve both goals simultaneously is to use profits from mid- and high-end products to support low-end products in price wars.

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