- November 27, 2017
In the last blog I discussed Amazon and the disruption they have created in the retail space. And to quote Yogi Berra, “It’s Déjà vu all over again”. 100 year ago Sears & Roebuck changed the retail landscape. Now we are getting smaller again with retailers like Dollar General, Trader Joes, Aldi and most recently Lidl.
What can we learn from all of this?
Whether you are new to the business or have been in business for many years, it’s important to understand your customer. It’s also important to have a plan. But more importantly is to have a plan that can be executed at retail. I have spent over 30 years studying the food customer and consumer. And much like 100 years ago, they continue to change and evolve.
Whether you are an on-premise or off-premise retailer, it’s important to understand these changes and others as they relate to your business. Planning helps answer the following questions:
- Who you are?
- What you do?
- How you are different?
- What problems do you solve for the customer? (Basically, why you are better than the competition.)
When we “sell” something, we tend to focus on the “who we are” and “what we do” when the consumer really cares about “how we are different” and “why we are better”. Regardless of the business you are in, successful companies solve their customer’s problems better than their competition. Sears is now the place where America “used to” shop because they were unable to answer these four basic questions as the world changed around them.
The plan begins with the external analysis. These are things that are outside of your control, but important to understand. Political, legal, social, technology, environmental and economic trends are important to all of us.
Competitive analysis comes next.
Who are your direct and indirect competitors? Don’t just look at the companies that “look” like yours. Consider a great local or regional brand. Most of the innovation at retail starts with a small retailer. Why? Because they are usually the closest to the customer and can see things changing faster than anyone else!
How do they compete and how do they respond to you?
Next, comes the internal analysis.
This is when you need to do an objective assessment of what is going on inside your business. Who are your customers? What are they buying? Where and when do the buy? How do they buy? Why do they buy?
It is important to view this from your customer’s viewpoint, not yours. This is where marketing research comes in. (You can do this on your own, or hire someone to do it for you)
We conduct a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) for each competitor. Remember that strengths and weaknesses are internal and opportunities and threats are external.
From this we develop a primary and secondary target market.
We then develop a marketing “position” for each target.
And then, we develop the marketing plan (Product, Price, Promotion and Place strategies).
We implement the plan, measure our success and adjust accordingly.
The bottom line is, you need to make sure that you understand YOUR consumers and build your products, merchandising and marketing programs around them. It will positively impact your bottom line!
And remember, Marketing is a race with no finish line.
George Latella teaches Food Marketing at Saint Joseph’s University in Philadelphia. Food Marketing which is the largest major at Saint Joseph’s University recently celebrated its 55th anniversary. George is also a partner in Beacon Marketing group which provides Marketing planning, research, and e-commerce/direct marketing communications for food and beverage companies. George can be reached at firstname.lastname@example.org or 610-660-2254.