---
title: "Three Hurdles Distributors Must Overcome to Open New Markets!"
description: "This article outlines the three stages distributors must navigate when entering new markets: single product breakthrough, forming a product group, and establishing a product structure. Each stage requires specific strategies to build sales networks, brand awareness, and competitive resilience."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-01-27"
language: "en"
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# Three Hurdles Distributors Must Overcome to Open New Markets!

> This article outlines the three stages distributors must navigate when entering new markets: single product breakthrough, forming a product group, and establishing a product structure. Each stage requires specific strategies to build sales networks, brand awareness, and competitive resilience.

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Stage 1: Single Product Breakthrough
Generally, at the initial stage of market development, manufacturers and distributors cannot simultaneously promote multiple products. Therefore, they must rely on the momentum of a single product to create a good start in the market. The following aspects are crucial for a single product breakthrough:

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

(2) Explosive distribution to achieve market coverage.
Explosive distribution requires speed, large quantities, and high market coverage. This approach can achieve the following: first, catch competitors off guard by completing distribution before they can react; second, rapid distribution to retail outlets creates momentum, instilling confidence in secondary distributors, retailers, and consumers.

(3) Stable high-profit incentives for secondary distributors.
In markets dominated by secondary distributors, especially in townships and below, secondary distributors play a vital role. The only motivation for secondary distributors to promote an unknown new product is profit margin. If the new product does not offer higher profit margins than other products, it will fail to pass through secondary distributors, never reaching retail outlets, and thus missing the opportunity to meet consumers.

(4) Strong in-store promotion at retail terminals.
Old and well-known products can "sell themselves," and consumers often make habitual purchases. How can a new product unfamiliar to consumers be sold? It relies mainly on strong recommendations at the retail terminal. If retail staff do not recommend the product, the manufacturer or distributor must send personnel to the terminal for in-store promotion and point-of-sale assistance.

(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 build a strong brand presence 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" simultaneously 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 during launch 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, alleviating the pressure of an overly high proportion of the leading product.
A single product is vulnerable to competitor attacks, and when attacked, there is no effective strategy to counter. If ignored, the market will suffer; if countered, profit margins will decline. Once a product group is formed, strategic counterattacks can be made using the group. 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-walk" strategy.
Remember, if you follow the typical requests of salespeople and distributors (higher quality, better packaging, lower price, better policies), the 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," build a "well-known brand" rather than a "well-known variety."
If a single product is too strong, it can lead to a situation where the brand is equated with that variety, which hinders the promotion of new products. Multiple varieties under one brand umbrella can enjoy the protection of the brand while offering consumers a choice—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 the entire product line; they usually target the product with the highest sales volume or the greatest threat. If the product line 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" generally refers to the extension of products within the same grade, while a "product structure" involves the extension of grades. Although many companies have succeeded by sticking to a single product grade, a single-grade product structure still has many problems.

(1) Only with structure can there be 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 achieve 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 generate 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 in 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 competition; they should proactively initiate or embrace price wars. At the same time, they must defeat competitors in price wars 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 price wars.

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