Click to read the original text for details -01- What is a good product? This is determined by the cognitive perspective represented by one's position. Famous brand expert Miao Qingxian proposed that a good product typically has three perspectives (see "Recruitment is Dead, Recruitment Power Lives Forever (II)"): 1. Good product from the enterprise's perspective: Excellent quality, various leading technologies, outstanding technical parameters, etc. 2. Good product from the distributor's perspective: A good project with low risk, high profit, fast capital turnover, promising future, etc. 3. Good product from the user's perspective: Better satisfaction, better experience, stronger resonance, more positive associations. Perspective is determined by one's position; it's about where you stand. The expression of a good product based on position is a cognitive perspective. It can be roughly judged that enterprises have a technical perspective, distributors have an interest perspective, and users have an extension of cognitive perspective. So, here's the problem! Three perspectives, three ways of expressing needs, create conflicts of position and cognition. This is a structural conflict that is inevitable and unavoidable. There are three pairs of cognitive conflicts. 1. Cognitive conflict between manufacturers and users on good products. The outcome may be: products favored by manufacturers are not accepted by users. 2. Cognitive conflict between manufacturers and distributors on good products. The outcome may be: products favored by manufacturers are not taken seriously by distributors. 3. Cognitive conflict within the manufacturer on good products. The outcome may be: products favored by R&D and management are not sold well by the sales system. The core content of this article is: how to resolve the cognitive conflict between manufacturers and distributors regarding "good products." -02- Based on my channel experience, distributors' judgment of "good products" has three time nodes, made sequentially. The first node is "first sight of the product," the second node is "after trial sales of the new product," and the third node is "after the product sells well." The first node is "technical logic," looking at whether the product itself has advantages. The second node is "marketing logic," looking at the product's sell-through situation. The third node is "profit logic," looking at whether the product makes money. Products that don't make money are not good products. The judgment at the three time nodes determines three attitudes. The judgment at the first time node determines whether to place the initial order and its quantity; the judgment at the second time node determines the determination to invest in the market; the judgment at the third time node determines the product portfolio model. If users don't spend money, verbal praise is not genuine recognition; if distributors don't place orders or invest, it's not genuine recognition. The judgment of a good product must be backed by real money. The judgment at the first time node is expressed in the initial order quantity; the judgment at the second time node is expressed in resource investment. -03- In the article "Why Don't Users Buy Products Favored by Manufacturers?" I proposed the manufacturer's perspective on good products, excerpted as follows: The manufacturer's product perspective is deeply influenced by the R&D department's background, i.e., technical background. In the past, textbooks defined new products as "five new": new technology, new function, new material, new structure, new use. This is a typical technology-oriented cognition of new products. Even now, technology-oriented cognition of new products still influences R&D departments: without some impressive new features, how can it be called a new product? Of course, now it's user-oriented, and new product development must incorporate user surveys (or insights) and competitor research. The combination of technology, competitors, and user needs forms the three basic directions for new products: First, quality improvement based on homogeneity. This can be expressed with "more," such as "faster," "more comfortable," etc. In short, it's the expression of [more +]. Second, differentiation under the premise of homogeneity. The product direction aligns with users' existing cognition, but with some differences, called differentiation. Third, starting from scratch, creating entirely new products. For example, smartphones compared to feature phones, cars compared to horse-drawn carriages. -04- Comparing manufacturers and distributors, the first perspective is technical. Confidence in the product stems from the product itself. From this angle, distributors and manufacturers have the same perspective. The technical perspective is suitable for recruitment. Distributors' confidence is expressed as "worth a try," unless the manufacturer has already launched promotional activities before the new product launch, or based on convention, it is inferred that the manufacturer will definitely make significant investments. "Worth a try" means testing the market, and it implies testing conditions, i.e., testing without marketing support (except when the manufacturer has marketing activities). In most cases, this is an implicit rule. When distributors say "worth a try," it doesn't mean they are genuinely invested. China has many channels and levels, and each level has "veto power" during new product launches. Fifteen years ago, I proposed the "level veto" in new product launches, including vetoes at various levels of the sales department and the channel environment, such as distributor bosses, distributor sales department heads, distributor salespeople, and terminal stores. Without completing distribution to terminal stores, "worth a try" is empty talk. New products are often a contradiction. On one hand, quality is definitely improved; on the other hand, there are definitely shortcomings. For example, a series of "better" features come with higher costs and higher prices. Level-by-level vetoes are not afraid of overall rejection, but of individual rejection of the whole. Some individuals may overemphasize a single quality item, such as price-sensitive channel members, who may veto any new product without a price advantage. So, new product launches must "pass five levels and defeat six generals" internally and in the channel. Some good products are vetoed internally and in the channel before they even meet users. Level-by-level vetoes are not necessarily rejections; after all, channel members receive countless new products daily and must reject the vast majority, otherwise, promoting new products would exhaust them. Level-by-level vetoes are not necessarily formal veto power; they can be soft resistance or amplification of negative information. -05- "Worth a try" means subjectively thinking the product is okay, but objectively waiting for market verification. Market verification without marketing support must meet at least one of the following conditions; otherwise, even good products will not sell well as the norm. First, the product has static selling power. What is static selling power? It is the product's ability to "sell itself," i.e., the ability to naturally sell without new product promotion. Products with static selling power usually meet the following criteria: 1. The product's advantages are visually intuitive; 2. The product's sales scenario allows users to intuitively feel the product's advantages; 3. The product's perceived performance and price are balanced. Second, the new product can make terminal store owners "first recommend" it. To satisfy the store owner's first recommendation, two conditions are needed: one is that the product is truly recognized by the owner (dare to recommend); the other is that the product meets the owner's profit requirements for recommendation (willing to recommend). Third, the product has a strong word-of-mouth effect on first-time buyers. Very few new products meet the above three criteria. When I promote new products, static selling power is only a means to test the product. However, many small and medium-sized enterprises are indeed waiting for static selling power to create miracles. -06- After static selling power testing, distributors have three choices: First, give up completely. Stop ordering; second, give up investment. Let it sell naturally, whatever sells, it doesn't matter; third, invest resources to do the market. Manufacturers' and distributors' attitudes toward new products after testing also manifest in three ways: 1. Direct or indirect refusal, can't push; 2. Push a little, move a little; 3. Move without pushing, distributors actively promote. Who invests resources to do the market? There are roughly three situations: distributor independent investment; manufacturer independent investment; joint investment by both. Based on my observations, in central cities, distributors are already unable to bear market investment, so they gradually become financiers and distributors. In lower-tier markets, it's usually joint investment. For new products from small and medium-sized enterprises, manufacturers are unable to invest, especially small enterprises that launch at "bare prices," and in such cases, distributors may invest independently. Why do distributors dare to invest? The following situations can be distinguished: First, distributors genuinely see promising prospects for the product. Markets for small and medium-sized enterprises are often "island-like," with good markets scattered here and there, not connected. This is a typical case of independent distributor investment. Second, distributors see hope from operations in other markets and are willing to invest jointly with the manufacturer. Therefore, the operation of model markets is crucial for new product launches. Third, for strong brands, distributors must "obey" and invest even if they don't want to. -07- What is described above is basically the game between manufacturers and distributors during new product launches. In such cases, except for enterprises with strong brand power that rely on organizational strength to push forward, most new products are basically sentenced to death after internal "level vetoes," channel "level vetoes," and static selling power tests. The correct logic should be: let a few people make objective judgments, and let the majority make subjective judgments. Objective judgment is based on facts. If a local market has already succeeded, do you believe it or not? To verify a new product with minimal time and cost, two specially designed steps are needed: First, bypass the B-end and face the C-end directly. Let the product face users directly, rather than being "picky" internally. Second, rapid local cognition formation to verify group cognition. The story of 100 monkeys illustrates that once a certain point is reached, even those who originally opposed will change their attitude, forming group cognition. -08- There is a critical point for group cognition to be "irreversible," which is a 16% C-end reach rate. Before this point, even if sales are good, it cannot be simply considered a market success. It is particularly important to emphasize that reaching the 16% group cognition "irreversibility" requires concentrated resources to quickly reach the critical point, and new product testing requires even faster speed. Therefore, new product market testing requires a professional team, and I advocate that enterprises establish a professional team focused on promoting new products. Once group cognition enters the "irreversible" critical point, the cognition of the new product enters another logic: originally, sales were predicted based on product strength; now, product strength is inferred based on sales. Manufacturers using good products to persuade distributors is persuasion. The persuasion process is difficult and may even be counter-persuaded. Manufacturers using sales performance of new products to convince distributors is conquest. In the face of performance, those who originally opposed will default. -09- Distributors' cognition of new products has two stages: the first stage is "first sight of the product, worth a try"; the second stage is "static selling power is good, can invest." At these two stages, most new products are sentenced to death. Such a new product promotion process can only be described as the instinctive approach of ordinary manufacturers. So-called instinct means that without professional training, one would follow this logic. For new products to succeed, there should be a new product promotion logic: Step one: Under the premise of fully soliciting opinions from all sides (subjective judgment), the new product market testing team directly carries out market promotion activities and achieves 16% C-end reach. If the test fails, give up directly. Step two: Under the premise of successful testing, require distributors to directly invest resources to do the market, otherwise they lose distribution rights. If distributors have doubts, they can fully observe. If they still don't believe, give up directly. Persuasion and conquest are completely different causal logics; persuasion is causal, conquest is reverse causality. The logic of persuasion is: because the product is good, it will sell well; the logic of conquest is: because it sells well, the product must be good. The minority are persuaded, the majority are conquered. -10- When products sell well, distributors' attitudes toward the product may reverse. Products that sell well don't make money; products that make money don't sell well. This is a typical Chinese characteristic. Because products sell well, prices become transparent, and gross margins decrease. Thus, distributors form "product portfolios." That is, a combination of "best-selling products + non-best-selling products," possibly best-selling products + long-tail products, best-selling products + new products, etc., using best-selling products to drive sales and high-margin products to make profits. Product portfolio means: for best-selling products, sell moderately; for profitable products, push as much as possible. Thus, a special phenomenon in Chinese business emerges: users' "first choice" products and channel members' "first recommendation" products. First choice refers to the user's first choice, products ranked high on the brand ladder. The premise of first choice is widespread user recognition, often with established brand power. First recommendation refers to the first recommendation by distributors and terminal store owners, especially terminal stores. The premise of first recommendation is that channel members believe the product's profit is high enough. The product portfolios of Chinese channel members determine a characteristic of Chinese marketing: big brands may not live comfortably, and small brands also have a place. Big brands that can still make money for channel members are rare in the FMCG industry. -11- In product promotion, there is another phenomenon: products are about to sell well but suddenly stop growing. Products that sell well don't make money; products that make money don't sell well. These are two extreme states. There is also an intermediate state: the product hasn't reached a sufficient level of popularity (consumer brand insistence), but the price has already become transparent. As long as the price is transparent, distributors and terminals no longer push the product, and it falls into a state: sales volume is not large enough, and profit is not thick enough. Not qualified for first choice, not powerful enough for first recommendation. Good products may die midway. -12- The cognitive conflict between manufacturers and distributors on new products differs from the conflict between manufacturers and users. The conflict between manufacturers and users, under the premise that the product itself is good, begins with marketing education and ends with the formation of user group cognition. The conflict between manufacturers and distributors also resolves by forming good group cognition among users in local markets, seeing hope from sales, and thus resolving the conflict. The approach to resolving these two different cognitive conflicts is consistent: a good product is not just a technical issue but also a marketing cognition issue. From this perspective, products without a marketing cognition solution, no matter how impressive the technology, may not become good products in the market. Source: Teacher Liu's New Marketing (ID: liuchunxiong1964)