Introducing products to a commercial network is associated with difficulties related both to the conditions imposed by a given network and the dynamically changing needs of consumers. Therefore, success is determined not only by the negotiation skills of a company that wants to enter this market. The ability of the product to meet the needs of the mass customer is also important. In the following post, we suggest how to introduce the product to retail chains and what strategies to use.
The process of introducing a product to the commercial network is a multifaceted series of closely related activities and phenomena aimed at convincing consumers to a new product and overcoming their resistance to changes.
How to introduce a product to commercial networks? Types of strategies
In order to successfully introduce a product to the commercial network, it is necessary to take care of every detail that builds its competitive advantage. In the conditions of dynamic changes in tastes and technologies used, innovation and development of new products become the basis for the company's survival. The commercial network is a new, dynamically functioning sales market.
Whether a new product will be accepted by buyers, be successful or omitted, is determined by conducting thorough research and product marketing concepts. Nowadays, simply collecting customer data is not enough. Awareness of who yours is target group of course it is extremely important. However, the ability to properly compile customers and their in-depth analysis is equally important. Drawing appropriate conclusions allows us to understand and adapt to human needs, and this, in consequence, is the basis for sales growth in organizations.
The successful sale of products in the commercial network is ensured by the implementation of an appropriate strategy. Companies with a strong brand find it easier to introduce their products and buyers more easily accept their presence in the store. A well-known brand is already associated with specific benefits, and a completely new brand has to earn its position and gain the trust of potential customers. The most frequently used strategies used when introducing a product to the commercial network include:
- price strategy based on building a competitive advantage based on an attractive price. Its opposite is non-price competition,
- a mass marketing strategy aimed at satisfying the average consumer with the use of such tools as promotions, bonuses, gifts, samples or tasting campaigns.
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How to introduce a product to retail chains step by step
Taking into account the most commonly used strategies for introducing a product to a commercial network, the first stage of this process is a strategic analysis of opportunities and threats resulting from the appearance at a new distribution point. It is equally important to analyze your competitors' prices in order to be able to provide the most attractive alternative. Equally crucial is to consider specific and multidimensional marketing activities encouraging to choose a specific product from among others, equally available.
Due to the variety of entities offering their products in retail chains, there are many ways to classify new products:
1. An innovative product, which was created as a result of improving production, adding new functionalities and important features that cannot be found in the competition.
2. A remerchanded product that was introduced to the market to increase sales by changing the marketing-mix composition.
3. An improved product, which is an improved variant of a commercially available product.
4. Complementary product, i.e. a product that complements existing product lines.
5. Product or product variants tailored to the needs of new, selected market segments.
6. Imitation product - transformed (secondary) product.
An important role in the process of expanding the range of a new product on the market is the possibility of testing it by customers and the possibility of quick reaction in order to take appropriate corrective actions.
How to introduce a product to retail chains and whether to limit sales to them only?
When deciding to cooperate with a specific producer or distributor, retail chains primarily take into account the product. They assess its quality and whether it meets the market needs. There is no denying that the networks are primarily looking for well-known products that already rule the market and arouse the interest of consumers. Companies that represent less known brands need to come up with interesting and original ideas sales support in a specific network.
Retail chains are happy to cooperate with local companies that are able to deliver goods to individual customers on their own.
The cost of cooperation with the network is not only the cost of transport and marketing activities (newsletters, promotions, appropriate shelves, tasting), but also the risk of returning the goods. Food items that have a short use-by date can be thrown away if they do not sell in a particular store. Therefore, we speak of full success when the chain resells the goods to the end customer, and not when we sell the goods to the network. If this does not happen, the company has to pick up the unsold goods itself or agree to a clear discount.
Placing the product on the market involves many considerations. Cooperation with the commercial network involves, inter alia, with an additional margin that usually ranges from 25% to 40%. We should also remember that the chain sells our goods at a price it deems appropriate. Unfortunately, long-term contracts signed with networks do not fully protect the interests of the supplier. Often, during the course of a commercial relationship, the network introduces new discounts or rules for granting them, so the terms of delivery are subject to very frequent changes. Another disadvantage for suppliers is the simultaneous application of multiple discounts (e.g. monthly, quarterly and annual), i.e. in practice multiple reduction of the price of the delivered goods.
Is it worth basing your strategy solely on selling to a commercial network? Absolutely not! It is wise to trade with several chains in different parts of the country. In addition, it is much better to spread your sales over many different types of places and closely monitor customer behavior. Then we can try to sell the goods returned by the network elsewhere.