Why are the hottest new products at the Sugar and Wine Fair more likely to make companies and distributors lose money?

What are the tricks to ride the market trend without losing your wife and catching the rogue?

Planning a product line is like deploying troops; what is the correct posture? Every year starting in March, industry exhibitions are in full swing. What do you look at in industry exhibitions? Look at 'new products', 'trends', and dynamics; it is said that major exhibitions are industry bellwethers. But in general, industry exhibitions are like 'going to a big market' or 'joining the crowd', with products rushing in like a swarm. In the first few years of making beverages, when I saw that Six Walnuts was hot, the exhibition was full of walnut drinks, then coconut juice drinks, and recently lactic acid bacteria drinks; in cosmetics, it was various hydrating products in the early years, and in recent years, various masks. If companies launch new products based on this, and distributors select products based on this, they often lose a lot. A food distributor friend said, The Sugar and Wine Fair as a bellwether means that whatever product is hot at the fair, you should not choose it. Over the years, I couldn't help but follow the trend, and every time I followed, I lost. Originally wanted to ride the market, but ended up losing 'the wife' to 'the rogue' Why can't hot products be simply imitated and followed? What is the correct posture for following market hotspots? Let's first look at an example from Professor Ariely's book "Predictably Irrational". In a small town in Australia, there were two clothing stores selling shirts. The first store sold European-style shirts, and the second sold North American-style shirts. The prices were comparable, and so were the revenues. Later, a third clothing store opened, also selling European-style shirts, but at a much higher price than the first store. Naturally, the third store had few customers, but the first store's revenue increased significantly. After comparing the two stores, people chose the first store's products without hesitation. At the same time, the second store selling North American-style shirts was also affected, with less business than before. People thought the third store would eventually go bankrupt, but to everyone's confusion, it lasted for a long time. Until one day, when the first and third stores were both transferred, people discovered that the owners of the two stores were the same person. The existence of the third store was precisely to serve as a 'decoy' for the first store. This is the 'decoy effect' in marketing that Lao Miao has previously discussed. When there is a market hotspot, there are usually one or two brands that are on a roll. At this time, rushing in to follow easily makes you a 'decoy' for the hot brand. Not only when launching new products, but also when planning product lines, business owners and marketing managers are prone to falling into this trap: When a company finds that a competitor has a product selling very well, they often get itchy and develop a similar product at a relatively low price to harass the opponent. In the eyes of consumers, this is a knockoff, but of course the company gives it a nice name, such as a blocking product or a fighting product, or a flanking product or a cover product, and so on. Euphemistically called 'riding the market' or 'leaning on a big tree', but this approach often backfires, as analyzed below. Let's assume there are three major competitors in a certain segment: A, B, and C. A's main product is A, B's main product is B, and C's main product is C. Under the dual influence of market trends and promotion, suppose product A is growing well and begins to impact products B and C. At this time, company B launches a similar product A-1, and company C launches a similar product A-2, trying to grab market share from product A. The result may be that they inadvertently become a 'decoy' for product A, causing consumers to further concentrate their choices on product A, which in turn has a greater impact on products B and C. So we see in the market that most similar imitations do not achieve the expected results and quickly fade away. When Master Kong's old pickled cabbage noodles succeeded, Kangshifu spent a lot of effort promoting 'Chen Tan Suan Cai' (old pickled cabbage), which not only served as a wedding dress for Master Kong, but also caused the greatest damage to its own flagship 'Hong Shao Niu Rou Mian' (braised beef noodles).

If direct follow-up is not appropriate, how should blocking products be set up?

Still looking at the three companies A, B, and C above. Under normal circumstances, if company A's product A becomes popular, the correct approach for companies B and C is usually to ignore it, and then company B does B+ (upgraded product) and B- (similar product, low-price product), and company C does C+ and C-. This is the famous 'left-right mutual combat' technique in the industry: fighting yourself, making yourself a decoy, attracting more attention. The so-called blocking products or flanking products are set up based on your own product line, with 'home advantage'. If you go to someone else's territory and shoot wildly, you are likely to be beaten to a pulp. We see multinational companies like P&G, Wrigley, Mars, etc., rarely immediately chase after a competitor's hot product. They see others get hot, they strengthen one; others get hot again, they strengthen another. In the end, their own product line becomes extremely strong and almost flawless, while the originally hot competitor may be a flash in the pan, and they remain strong all the way. Not because these multinational companies are too high-class to imitate, but because this approach is the most effective. So after Master Kong's old pickled cabbage noodles became popular, the most appropriate response for Kangshifu would have been to launch 'Sha Guo Niu Rou Mian' (clay pot beef noodles) or 'Fan Qie Niu Nan Mian' (tomato brisket noodles); if they really thought the sour and spicy flavor had a future, they could have done 'Suan La Niu Rou Mian' (hot and sour beef noodles) or 'Suan Cai Niu Rou Mian' (pickled cabbage beef noodles). Following with 'Chen Tan Suan Cai' led them into a trap set by Master Kong.

If you must follow, how?

If you really covet the competitor's market performance, or if the competitor's product is the trend and you must follow, what should you do? Still using the three companies as an example, if company A's product A is hot and you must follow, what should companies B and C do? The first method is to launch 'a' (a segmented version of product A), competing with A through specialization. Of course, you need to study whether the chosen segment is profitable and whether you can capture it. The second method is to launch A+ or A++, as upgraded versions of A. 'The best defense is offense, and the best offense is defense' - this is the dialectic of marketing warfare. Attracting the enemy to your own turf, in most cases, defensive battles are more efficient and yield greater results than offensive battles; but if you see an opportunity to exploit the enemy, not taking it is foolish. However, distinguishing between 'pie' and 'trap' is not easy.

Anecdotes from the beverage world

Back then, when Master Kong's Xian Cheng Duo (fresh orange juice) became hot (A), diluted juice drinks were the trend, and you had to follow. The big players all rolled up their sleeves, with high-level moves, mediocre moves, clever moves, and foolish moves, making the market lively. Kangshifu launched Xian De Mei Ri C (a simple similar product, A-, negative points, get out), which struggled and nearly died. Coca-Cola launched Qoo (a), but the segment selection was problematic, and it quickly died. Coca-Cola gritted its teeth and launched Minute Maid Pulpy (A+), 'with pulp, more substance', which sold like hotcakes and overtook Xian Cheng Duo to become the leader in diluted juice. Nongfu Spring said, 'I'll also do an A+, with three kinds of fruits, and you have to 'shake it' before drinking', and it succeeded. Pepsi couldn't hold back: 'I'll also do one with pulp', and launched Tropicana Pulpy (a similar product to Minute Maid, an A+-), but it didn't work. 'It's not that we're incompetent, it's that the enemy is too cunning.' Coca-Cola was not to be messed with, so they targeted Nongfu Spring: 'I'll also do multiple fruits', and so Guo Bin Fen (another A+-) was launched, but it still didn't work (Lao Miao often says Pepsi's operations in the Chinese market are characterized by a series of foolish moves). Wahaha, relying on its channel advantages, often 'bullied' Nongfu Spring, launching a product with four kinds of fruits: 'You have three, I have four, I'll outdo you' (thinking it was an A++, but it was actually an imitation, an A+-), and it quickly died. Wahaha then thought, 'This is too chaotic, I'm out. Since juices can be mixed, why not mix something else into the juice - I'll mix milk.' And so Yingyang Kuaixian (using horizontal innovation, combining milk and juice to create a new product B, which Lao Miao considers the most brilliant marketing innovation in the beverage industry in the last decade) was born. Wow! It generated over 10 billion yuan in sales. Then they launched fermented milk Yingyang Kuaixian (B+), and for children, Shui Shui Wai and Ru Wa Wa (b, b+), a set of left-right mutual combat that was so powerful, they became the 'boss' of the beverage world. No matter how things change, it all comes back to consumer behavior patterns. Under the dual influence of the 'decoy effect' and the 'Matthew effect', 'knockoffs' cannot compete head-on with 'genuine products'. Even if your knockoff quality is higher than the original, the masses still vote for 'Li Kui' rather than 'Li Gui'. As information becomes more transparent, the cost of entering fourth-tier and below markets and remote rural areas to gain market share has also increased significantly, and this path is gradually becoming less viable. Is it 'left-right mutual combat'? Or go higher, making upgraded products? Or go finer, making specialized products? As the saying goes, 'The subtlety of application lies in the mind.' -END- The best learning platform for FMCG distributors in China Focuses on providing professional, practical, and applicable tutorials for companies and distributors Committed to helping Chinese FMCG distributors grow rapidly The most professional and practical knowledge base in the FMCG industry Reply with the red number below to get the corresponding content Reply with number 1 to view the complete knowledge base | 001 Excellent article selection | 002 Distributor market operations | 003 Terminal visit management | 004 Sales supervisor skills | 005 Sales improvement techniques | 006 Channel expansion | 007 Managing distributors | 008 Distributor development | 009 Distributor internal operations management | 010 Team management | 011 Efficient distribution techniques | 012 Sales manager's eighteen skills | 013 KA operation methods and strategies | 014 First lesson for new salespeople | 015 Internet, brands | 016 Distributor B2B transformation | [Long press QR code to follow]