Crossfire
Challenges And Lessons Of Selling New Products
By Herman Githinji
In September 2016 , while on a short holiday in Kenya , a friend who was a senior manager at Keroche Breweries convinced me to join the company . At the time , Keroche had launched Summit , a beer they believed was of high enough quality to compete with Kenya Breweries ' brands . However , Summit ' s sales had stagnated at around thirty thousand cases per month , far below their target , which was almost four times higher . The company believed their main challenge was distribution , which was at about 10 %.
Upon joining , I conducted a quick diagnosis of the distribution issue by giving ten new bars a crate of Summit each for free . In each bar , I ensured Summit was prominently displayed and competitively priced . After a week , I returned to these bars and found that the beer had hardly sold . This indicated that the problem was not distribution . Even if we achieved 100 % distribution by giving every bar in Kenya a crate for free , it wouldn ' t necessarily lead to meeting our sales targets .
This experiment led us to question why consumers weren ' t buying Summit despite its presence and competitive pricing . We then turned our attention to the quality of Summit as a product and its positioning compared to Kenya Breweries ' brands . A lot of money was therefore invested into modernizing the plant and the general brewing process . Despite Keroche ’ s investment in a state-of-the-art brewing plant and the expertise of a head brewer from South America , the product still struggled in the market .
The core issue was a false belief that having a great product and delivering it to the consumer table was enough . All companies launching new products face the challenge of differentiation . Unlike East African Breweries Limited ( EABL ), which had a rich tradition of brewing quality beers , Keroche was largely known for third-grade local brews . Simply having a top-quality beer and displaying it next to Tusker , did not make Keroche comparable to EABL in the eyes of consumers .
Most new products are average offerings that meet basic consumer needs . And there is nothing wrong with that . The
When launching and supporting a new product , it ’ s crucial to honestly evaluate its unique features compared to market offerings . If it ’ s a " me too " product , extra resources must be dedicated to distribution , favourable trading terms , competitive pricing , and promotions to encourage trade stocking and consumer trials .
challenge lies in senior managers believing they have a unique product without clearly identifying its differentiating features . Consumers are already satisfied with existing products , and new " me too " products are seen as disruptive unless they offer clear advantages in distribution , pricing , trading terms , or after-sales support . In the entire route to market , Summit didn ’ t offer any substantial difference to encourage a switch .
Introducing a new product in a competitive market requires intense marketing campaigns . At Bidco Land O ’ Lakes ( BLOL ), we introduced new animal feeds products alongside a new company , necessitating double the effort to sell both the company and its products . We conducted aggressive campaigns using radio and farmer meetings to create awareness and demonstrate the products ' benefits by training farmer groups . Though the product was higher in quality , we still needed to get wind behind its sails .
Besides having a great product and creating awareness , distribution is another critical factor . Establishing a dependable routeto-market channel for products of a new company is daunting but surmountable challenge . At BLOL , we sought existing distributors willing to stock our products . In regions without interested distributors , we opened company-managed depots . This contrasts with EABL , where we shortlisted new distributors and charged a substantial non-refundable goodwill for those interested . Building a vigorous and a reliable distribution channel for products of a new company requires focused resources , dedicated effort , and patience .
Distributors often ask , " What ' s in it for me ?" They require favorable trading terms and significant discounts to invest in a new product . Most of them will be hesitant to
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