To gain a share of a new market, distributors must not only strategize their market development but also carefully plan product selection and promotion. Generally, developing a new market with a new product to forming a stable market requires three stages.

Stage 1: 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. A single-product breakthrough requires the following:

(1) Select a mass-market product that can achieve high sales volume. The purpose of a single-product breakthrough is twofold: first, to form a sales network, as only products with high sales volume can establish a comprehensive network; second, to build brand awareness, as only high-volume products have brand influence.

(2) Explosive distribution to achieve market coverage. Explosive distribution requires speed, large quantities, and high market coverage. It achieves the following: first, catching competitors off guard by completing distribution before they can react; second, rapid terminal distribution creates momentum, giving confidence to secondary distributors, terminals, and consumers.

(3) High profit margins to induce secondary distributors. In markets dominated by secondary distributors, especially in townships and below, secondary distributors play a crucial role. Their only motivation to promote an unknown new product is profit margin. If the new product does not offer higher profit margins than other products, it will not pass the secondary distributor hurdle, and the product will not reach the terminal, losing the opportunity to meet consumers.

(4) Strong in-store promotion at terminals. Old and well-known products can "sell themselves," and consumers often buy habitually. How can a new product that consumers are unfamiliar with be sold? It relies mainly on strong recommendations at the terminal. If retail terminal staff do not recommend it, the manufacturer or distributor must send personnel to the terminal for in-store promotion and sales.

(5) 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) are extremely low, a few tens of thousands of yuan can launch a market. Therefore, during distribution, high-density advertising should be used to "push" and "pull" to activate the market.

(6) 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 due to insufficient push. Therefore, three consecutive waves of strong promotion are essential.

Stage 2: Forming a Product Group

(1) Extend new products around the main brand that has achieved a single-product breakthrough to reduce the pressure of the dominant product's excessive share. A single product is vulnerable to competitor attacks, and when attacked, there is no effective strategy to counter. If ignored, the market suffers; if countered, profit margins 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.

(2) New products should enter the market with 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), new product promotion is doomed to fail. To extend the product lifecycle, you must leave enough room for retreat—price space. Therefore, new products should enter the market with a higher price.

(3) Through a "product group," form a "well-known brand" rather than a "well-known variety." Excessive strength of a single product 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.

(4) A "product group" also makes it difficult for competitors to launch targeted policies. Competitors generally do not attack all product lines; they usually choose the product with the highest 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.

Stage 3: Forming a Product Structure

A "product group" is generally an extension of products at the same level, while a "product structure" is an extension of levels. Although many companies have succeeded by sticking to a single product level, a single-level product structure still has many problems.

(1) Only with a structure can there be a strategy. Distributors 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, which can enhance the brand image.

(2) 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.

(3) The key to winning price wars (policy wars) is an effective product structure. In the Chinese market, price wars for low-end products are inevitable, determined by consumer demand characteristics and market competition—unless you exit the low-end competition. Distributors must not avoid price; 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.

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