The discussion today is going to start with how the new entrants can gain ground in case they’re being edged out by the big brands on the ground of exclusive distributors. The solution is retail sales. It’s more expensive but its effective Retail sales are selling directly to those who are going to consume it. You can move a step backwards by selling to those who will sell to the consumers. With this approach, you would have cut off the distributors from the link. It is laborious but it has sustainability.
The use of distributors is a push strategy whereby they move your products down the sales channels. They may experience challenges along the way when the wholesalers or retailers reject the products but established brands can’t experience this except for new products.
On the other hand, retail sales will result in a pull strategy where the product is demanded by consumers as a result of the interest that has been created. This causes the products to be requested across the sales channels even from the distributors.
Recall that the first exercise is to bypass the distributors and sell the product to the consumers or retailers and/or the supermarkets. These are the ones that will now be requesting for the products once it is acceptable and desired by the consumers.
This approach will cost time, energy and money but it gives sustainable results provided the product is good and acceptable. This approach will require sampling as the new products will be taken to the consumers for trial. The supermarkets too will require samples.
Once the retail sales and the sampling process is successful, the demand for the product across the sales channels will force the distributors to stock up the new brands. The question now is: What happens to the exclusivity issues?
What these distributors do is to register a new name and use that for the competing brand. Recall that they already have their channels through which they sell the big brands. It is through those same channels that they will sell the new brands.
One other thing the new entrants must be ready to part with is a better incentive and margin structure for the distributors and channel partners. Recall it is a war and you must be offering something better to upstage the present champion.
The new entrants must also give an allowance of a better margin structure for the wholesalers and retailers. The salesmen who sell in traffic must make more money on your product than the big brands as that is the most important thing to them.
Therefore, new entrants reaction to exclusivity issues of the big brands includes retail sales, sampling, the better incentive structure for distributors, more margin for the wholesalers and retailers and more margin for the team that sell in traffic in Lagos, Nigeria.
Today, we have dealt with how the new entrants can react to exclusivity issues. Tomorrow, we will continue with the strategies that can enable any of the brands to win the
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