Warm Tip: Click the blue text above “FMCG Distributor Professional Consulting” to learn more about marketing and distributor internal management. The supreme art of war is to subdue the enemy without fighting; the next best is to attack cities. The same applies in today's business world. To maintain market vitality and expand market share, many companies attempt to drive sales growth through continuous development of new products. However, most end up with chaotic product structures, difficulty in scaling up varieties, and slow brand improvement, disrupting the overall market sales layout. Any product entering the market will see its sales and profits change over time, following a pattern from low to high and then back to low, much like human life—birth, growth, maturity, and eventual decline. This is the product life cycle phenomenon. The so-called product life cycle refers to the market life cycle process from when a product enters the market until it finally exits. A product's market life cycle only begins after research and development, test marketing, and market entry. Product exit marks the end of its life cycle. Due to the regularity of product life cycles, launching new products is of great significance to enterprises. The strategy of launching new products is correct, but no new product launch succeeds easily! According to statistics, in the United States, the success rate of new product launches is only about 5%; in China, the figure is even lower. New product launch is a systematic and complex process, from preliminary market research, product positioning, and selling point discovery to later sales execution, inspection and improvement, brand maintenance, and deep distribution. Any problem in any of these links can directly lead to failure. Here, we analyze two representative strategic failure decisions in the new product launch process. Misconception 1: Heavy Investment, Bitter Fruit Case: In 2007, A liquor company launched a new wine to counter market impact. To ensure successful launch, the company concentrated all available funds, spent heavily to hire a well-known actor as brand ambassador—something unprecedented in the company's decades-long history—and invested heavily in advertising to support the launch. The new product quickly filled major hotels, supermarkets, and terminal outlets. With attractive promotions, sales opened up rapidly. But the good times didn't last. Due to cash flow problems, prizes couldn't be redeemed promptly or at all. Distributors complained endlessly, and consumers began to question the manufacturer. As the Chinese saying goes, "Bad news travels fast." The product soon fell into a sales quagmire and then completely stalled. Salespeople dared not face distributors, after-sales service ceased entirely, and the new product launch was declared a total failure. The credibility crisis from the product failure also dealt a fatal blow to old products, and A company never recovered. Analysis: The failure of A company's product launch was due to lack of overall planning, blind investment, and poor execution. Pre-launch investment is necessary, but if heavy investment causes a cash flow shortage, making it impossible to effectively carry out post-launch maintenance and promotion, it plants the seeds of failure. As mentioned, the success rate of new product launches is very low. Such heavy investment, if it fails, also casts a shadow over future launches. As the Chinese saying goes, "Once bitten, twice shy." If one investment fails, it will be difficult to get the company to invest in future new products. Misconception 2: Over-Caution, Missing Opportunities Case: B company, founded in 2009, is primarily engaged in goat dairy products. It possesses advanced production technology, unique in the goat dairy industry. The products are nutritious with broad prospects, and they enter unique sales channels by creating a third business format. The product meets modern dietary requirements and has huge market potential. The only difficulty is the traditional aversion to the goaty smell of goat milk, but the company has fully achieved scientific deodorization. After launching the product, B company first conducted test sales in its locality, relying on personal connections to establish five sales outlets. However, sales were essentially natural, with no after-sales, promotions, or advertising. Due to lagging promotion and advertising, sales relied mainly on referrals. Initially, sales were optimistic, but gradually, outlet owners found referral-based sales too tiring and stopped recommending, and sales immediately stalled. Analysis: For new product launches, investing beyond the company's actual capacity is not feasible, but not investing at all is also not feasible. New products without promotion and marketing can succeed, but such cases are extremely rare and require a process, with serious efforts in market, channel, and sales, and good after-sales service. B company's product is a completely new product, and market awareness itself is a challenge; relying on natural sales is simply impossible. Moreover, as a test market, such an approach can affect and mislead strategic decisions. Sales difficulties caused by not seriously managing the market, if used to hastily judge the product's market demand and development, would be biased. From the above analysis, it is clear that new product launch is both a hope and an important strategic measure for enterprises, of great significance to development, but also fraught with risk. Only successful launches bring expected results; failure brings not only financial losses but also impacts on time and opportunities. In the above cases, new product launches should neither be blind investments nor overly cautious; both are misconceptions in new product operations. Investment in new product launches must be planned, prepared, and step-by-step with clear thinking. Mr. Shi Yuzhu's model of city test marketing for new products has always been successful and is a valuable experience worth learning. Rolling development might be a method worth learning for many enterprises' new product launches! -------------------------------------- Like this article? Feel free to click the top-right corner to share to your Moments; About us: WeChat Name: FMCG Distributor Professional Consulting Management Account Introduction: 20 years of FMCG distributor operation and management experience, professionally targeting distributor internal: Learning and Exchange QQ Group: 344257092 -----------------------------------------