Marshall Place Associates Live More of Your Life

CLEARING A WAY TO THE ROAD AHEAD

In nearly every market there are two or three major operators who have carved out a dominant position and established brand dominance that leave only a small market space for the small and control over the road ahead for everyone who is trying to carve out new territory.

Small business owners can easily become unintended victims of the battle between the giants and even more easily become sources of market expansion as an intended result of the hunt for custom by the majority players. Developing both defensive and offensive strategies in this environment requires close attention to the basics of business performance that rely upon a combination of closeness to customers and commitment to superior quality.

Defensive strategies are those that rely upon capacity to build a strong market presence based upon control over relationships, resources, information and decision making power in order to move faster than competitors. Offensive strategies are those actions that force the giants to become ‘me-too’ followers and open their doors to small and medium business operators who have demonstrated the existence of new market spaces.

Defensive Strategies

A close study of the purchase cycle of the major market players helps identify both their strengths and their weaknesses, They have to commit larger sums of capital and business decisions of their buyers to be able to have sufficient of the right goods and services at the right time for their regular customers. By paying close attention to sales forecasts and reports of industry analysts
it is possible to study when, where and how competitors are going to advertise and promote opportunities for ambush marketing by smaller and more agile business units.

To ensure that there arte sufficient funds in hand and resources to cope with heavy discounting or promotion by competitors it is essential to give early attention to both accounts receivable, inventory levels and terms of trade credit. Building up a war chest and retaining earnings from successful sales drives ensures that spot-purchases and below competition costs can win tenders and the support of customers who are looking for a bargain or superior terms of trade.
Most markets offer advantages based on closeness to the customer, flexibility in arrangements that enable clients to get the benefit of just in time or on-the-spot operations and a greater appreciation of specific needs, wants, hopes and expectations of target markets. This enables the smaller operator to establish direct contact with the leaders in those segments and find out what would make their life easier but not necessarily any cheaper.

Preparing a month by month sales plan enables the smart company to modify their range of products and services to ride on the coat tails of the major’s selling and marketing promotions by modifying prices, credit policies, local and direct marketing to the core of competitors customer base, increased personal selling with special offers and gifts with purchase and superior after-sales service.

Offensive Strategies

Creating a superior level of comfort and credibility within sections of the market or segments of preferred customers enables the smaller operators to gain a clearer picture of the road ahead and carve out a niche market space. Niche marketing is the key offensive strategy because it enables greater focus upon the features and benefits that customers cannot readily obtain from the major players.

This is the reason that boutique manufacturers and retailers are able to charge a premium for setting the pace and being early market makers rather than price takers. It is also the reason that smaller discount operators can make offensive forays into segments of the market that are willing to defer their consumption to get a better deal at a sale or a time of intense market competition.

Raising the quality of the offer at a similar price or bundling a range of related purchase opportunities can save customers time and offer greater convenience that takes the business off the road for competitors and opens a path to business growth and new segment entry for the small and medium enterprise. The capacity to build in better design, more interesting packaging and more intriguing purchase experiences all combine to challenge the predictability and lack of market responsiveness of competitors who focus only on volume middle market sales.