invest in stocks of a new product that may tie up their scarce business capital . To encourage new product stocking , the company must consider offering favorable trading terms . One company I consulted for had a rigid discount structure that hindered the stocking and sales of their new product . Flexible trading terms and carrying manageable accounts receivables are essential investments for the success of a new product . Attractive cash discounts must also be considered to encourage initial purchases and decent trade stock levels .
After securing distributors , retailers also needed incentives to stock , display , and recommend our products . A loyal distributor may go the extra mile of recommending your products to their consumers , but most of them won ’ t . Promotions aimed at both incentivizing trade and encouraging consumer trials are crucial . Brand ambassadors , especially in big wholesalers or supermarkets , help guide and recommend products at the point of sale . Volume discounts , offers , and bundling are other sales promotions that help point-of-sale uptake .
Competitive pricing is vital but doesn ’ t necessarily mean being the cheapest . A product must offer value for money . Most " me too " products compete mainly on price . If consumers don ’ t perceive unique features or benefits , they won ’ t pay a premium . At BLOL , we used evidence-based cases to show how our products provided better value for the price . Most " me too " products that want to charge a premium without building a commensurate brand equity will fail .
The most popular products are not always the best in quality but excel in one key sales element that meets trade and consumer needs . In Australia , Monin is the leading coffee syrup brand , not because of its quality , but due to its nationwide distribution capacity , offering convenience , especially to franchises needing uniform brands . EABL products were not necessarily of superior quality compared to Summit , but they enjoyed a rich heritage , a robust distribution channel , and unparalleled sales turnover at the point of sale .
Introducing new products in the market requires an integrated and sustained investment . Undifferentiated products may compete and win the middle tier , but it requires a well-thought-out and integrated strategy . The mistake many companies make is allocating all resources expected to support new products solely to marketing . At BLOL , the extra cost of money invested in trade receivables and the ensuing bad debts expenses were all regarded as part of the monies set out to support the new product .
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 . Keroche ' s failure to promote Summit for sales turnover at the bar level suboptimized the distribution effort .
That , and the rigid trading terms of the company I consulted for are lessons in the importance of having a multifaceted and integrated support for new products .
Congratulations On The 20th Anniversary Milestone !
Life is all about seasons . We experience both good and challenging times in our personal and business lives . However , success is not defined by the outcomes of a single season but by the sum of our experiences over time . True success comes to those who endure all seasons , gaining wisdom through perseverance and hope . This wisdom helps us see the bigger picture and understand that a better season lies ahead . It also reminds us that we live in an interconnected society where overall success is not just about us .
For the past 20 years , Marketing Africa , under the leadership of William Kalombo , has shown remarkable dedication and passion . Marketing Africa has become a vibrant community where sales and marketing professionals come together to exchange ideas , learn , and grow . William and his team have gained the wisdom to realize that life is enriched through edification , sharing , and serving others .
I extend my gratitude to the Marketing Africa family for their warmth , support , and commitment to the spirit of collaboration . Thank you for fostering an environment where sales , marketing , and management knowledge is shared for the greater good .
Herman Githinji is a seasoned Management Consultant . You can commune with him on this and related issues via email on : hermangithinji @ gmail . com