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| Subject: Part 6a - Be Sure Your Business Is On Target | |
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Author: Dennis S. Vogel |
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Date Posted: 17:00:34 09/26/05 Mon In reply to: Anonymous 's message, "Help" on 15:31:23 08/01/05 Mon During the gap between my posts, I’ve been working on absorbing & integrating “Seeing What’s Next” by Christensen & his co-authors. Some of it repeats what’s in his other books &/or refers readers to those books. I haven’t forgotten about you. This next part IS NOT meant to be insulting. By now, if there’s any demand for your remaining inventory, you should have sold some more of it. We could get into “Reason Why” sales copy to urge people to buy your inventory at bargain prices. That would liquidate it & get you some money, but maybe not enough to sustain your business. I’m hoping you can still get some profit, not just sales revenue.. There’s still something else to determine, if the situation makes it necessary to liquidate inventory you can still do it later. Plus, since I focus less on mass media advertising than others, we’d need to be sure you have the right target market. That’s why some of my focus was on that in previous posts. This will cover another issue of target markets. Mass media advertising is apt to reach some members of almost any target market. So, it might be somewhat effective, but I prefer more efficient methods. These methods use efficiency to increase effectiveness. Unlike mass media sales reps who need to get clients to buy more to get commissions, I get my profit from clients’ results. To retailers who don’t produce what they sell, Christensen‘s books may seem unimportant. The majority of the information is about manufacturing. Yes, some adaptation is necessary to make most of it fit retailing. That’s true about a lot of business advice & information. What do you think consultants are for? 8^} Something emphasized in “Seeing What’s Next” may apply to why retailers get stuck with inventory. If retailers realize a manufacturer is “cramming,” retailers can avoid the products. “The problem with cramming is that it changes the innovation in ways that obviate its inherent disruptive energy.” (From “Seeing What’s Next”) Instead of opening a new market for an innovation, manufacturers may try to make an innovation attractive to its current target market. To do it, they adapt the innovation to fit current product lines & major customer’s paradigms. They could do it by adding features (not necessarily benefits) to products. Features don’t always have benefits -- added value -- for a target market, but the extra features cost the manufacturer money so it all gets added to the price. Some may buy the products anyway because for them, the extra features aren’t nuisances & there seems to be enough value despite the higher prices. A way manufacturers cram innovation is convergence. Al & Laura Ries wrote about convergence in “The 11 Immutable Laws of Internet Branding,” “The Fall of Advertising and the Rise of PR,” “Focus: The Future of Your Company Depends on It,” & “The Origin of Brands: Discover the Natural Laws of Product Innovation and Business Survival.” Any 1 of those has enough to give you a basic idea about the bad side of convergence. A personal example- When I heard about new global positioning system enabled cellular phones, I figured it was time to give up my analog phone. The phone was mine (I didn’t have a 2-year contract tying me to a phone company). Digital phones are supposed to better anyway. I knew about camera phones & knew I didn’t need or want one. The only reason I could think for carrying a camera with me is in case of an accident. I could take pictures as evidence for a trial. But those would be digital photos & how could I prove I didn’t alter them? So, I figured I’d get a basic, GPS-enabled phone. But trying to find a simple phone is hard. Manufacturers installed games, email capability, ability to add different ring tones, yadda, yadda. So, I’m back to having a 2-year contract tying me to a phone company to spread the price over the 24 months of billing. The caller ID function is nice, but I could do without it. The questions is - Are there enough old-fashioned people like me who just want to use a phone that’s just a phone? Maybe not. So, I ended up paying for extra stuff -- features -- which give me no benefits because I don’t want to use them. There are some phones with built-in Personal Digital Assistants -- or are they PDAs with built-in phones? They might be adequate phones, but do they fulfill what people expect from PDAs? Probably not. To add extra features, some sacrifices have to be made. Does it make sense to sacrifice things, just to have more features?!? Some suppliers (those with enough clout to control supply chains) push products on retailers by supplying popular products only if retailers take unpopular products too. No slotting fees here. I don’t know if that happened to you. If so, you may be stuck with merchandise your target market won’t buy unless they perceive enough value. Like a big person & small person on a see-saw, if prices outweigh benefits, people won’t want to buy overpriced things. That little value will be too high for them to reach. You may be able to find a different target market, but that might cause more problems because people may think, “That store serves other kinds of people, not me.” It doesn’t have to be a bigoted thought, just an impression a store doesn’t have what a target market wants. If that’s the first impression people get from your business, even if it’s inaccurate, it can be hard to overcome. It may be best to sell or trade the merchandise to another retailer if the supplier won’t take it back. Or maybe the supplier would take the merchandise but would charge money to haul it away & re-shelve it. That’s besides not paying much (far below wholesale) for it. Ideally, a start-up is based on what prospects want/need but aren’t getting. Since your business is established, I’ve used a different approach for you. There are still similarities in established businesses, depending how much money & space is already tied up in inventory or products on order. You need to determine who is in your target market & who isn’t. Then determine if that’s the problem. You might be able to get guidance from a trade association for your kind of store. Otherwise, I suggest taking samples of your marketing messages & pictures of the exterior & interior of your store to other cities. Ask store owners with similar or the same product categories for input. You can give them signed & notarized affidavits stating you’ll never open a store within XX miles (whatever their trade zone is) of theirs. Assure them you won’t try to sell anything to the customers who enter their stores. Ask for permission to show the messages & pictures to customers & get their input. If they want to buy something you offer, but the host store doesn’t have, send it to the host to be sold. If necessary, just charge the host the wholesale price for the products. The host can get the profit as long as you get the answers you need. When you show the pictures of the store exterior, ask what people would expect to find inside of it. Show the interior pictures & ask if the store interior & inventory fit the exterior. Ask the successful store owners for the demographics of their customer base to find if you’re trying to sell to the wrong people. This post is already long & I haven’t covered the whole subject. So, this is/will be continued in Part 6 b. Now you should figure out which store owners have the answers you need. We can cover more of the questions later. Dennis S. Vogel thrivingbusiness@email.com Not getting the full benefits from your marketing budget means you’re wasting money. But you’re also wasting the opportunity of reaching the right target market with the right message. http://web1.lakefield.net/~thrivingbusiness/ http://www.voy.com/31049/ [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| Part 6b - What Is Your Business' Target? | Dennis S. Vogel | 23:39:47 09/27/05 Tue |
| Part 6c - Expand Your Knowledge Base & You’ll Expand Your Success With Less Risk | Dennis S. Vogel | 00:05:11 10/03/05 Mon |
| Part 6 d What Does Your Business Need So It Can Keep Serving Customers? | Dennis S. Vogel | 20:45:47 10/07/05 Fri |
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| Part 6 e- Creating A Good Master Mind Group | Dennis S. Vogel | 22:50:34 10/10/05 Mon |
| Part 6 f- Building A Knowledge Base for the Present & Future | Dennis S. Vogel | 22:29:52 10/12/05 Wed |
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