Rethinking Business in Constantly Changing Environment
Posted in Marketing & Strategy Articles, Total Reads: 1391
, Published on 30 December 2012
Business is defined as “Any commercial, industrial or professional activity undertaken by an individual or a group”. Irrespective of the scale of business- small or large, the crowning aim of any business is to earn profits and keep growing. However, it is easier said than done as there are numerous obstacles which hinder the attainment of the goal.
Every business begins with a plan which elaborates upon the operations, day-to-day activities and future plans for the business. Various strategies need to be formulated so as to run the business, attract customers, retain them and increase them day by day. This entire process is a gradual one and takes time.
A very crucial part of running a business is taking into account your competitors, rivals and threats to your business. You are not alone in the market; many more businesses are vying for the same customer set, similar product and similar prices. Thus, in today’s world the most important thing is to maintain distinctness, to establish an identity, to become a brand for consumers.
Every business must start with a strategy, a plan- which business to enter into, how to obtain the raw material, capital, labour, machinery and other pre-requisite things to start up the business. The next step after setting up of the desired plant is to decide which type of customers to target- toddlers, teenagers, youth, middle aged or old or a mix of some categories. After choosing the target market, the firm needs to inculcate those characteristics in their product which will appeal to their chosen market segment. The final step would be to advertise market and establish the product as a premium brand.
Following the plan outline we have the competitor analysis. To gain an edge over your competitors your product should not only be distinct but better in every aspect than the competitors’ product. This might include quality of the product and services, the price of the product, its availability, the size of the market that it caters to, the positioning of the product in the minds of people and whether it is a necessity or a luxury item.
Customer satisfaction is the mantra for any business and making profits its aim. To satisfy a customer one needs to identify their demands and requirements. Firms should make products for market segments rather than segmenting the markets for their products. In today’s era consumers want to be empowered to choose their own products, to add or deduct characteristics themselves, to customize their purchase. Hence, the companies need to give them the authority to choose what suits them best.
Customers look for solutions and not products. Thus, firms should keep in mind that they’re providing solutions to the customers - solutions which will solve their problems, fulfil their wants and satisfy them. Customers judge brands based on their experiences of using them. This implies that firms should work towards delivering highest level of value and satisfaction to the customers in their first experience of using the brand. This can be done only by thoroughly understanding the needs of the consumers and by imbibing those requisite characteristics in their products.
The point that needs to be pondered upon is that there are various similar product offerings in the market that will satisfy the customers and provide value to them, then how to ensure that the customer chooses your brand? The answer is ‘innovation’. Only by innovating new, better and differentiated products can a firm ensure that it will be preferred by consumers over its competitors’ products. The invention and inclusion of distinct and quality characteristics will lure the customers into buying a product and reusing it again and again. Thus, one needs to rethink, innovate and produce better and different.
Here one can cite the example of the Tata Ace- a mini truck with which the company aims to convert three-wheeler users to 4-wheelers. Tata identified the gap in the market and introduced Ace which was priced slightly more than the competing mini trucks but had a permissible loading capacity of 750 kg along with a modern cabin which was not present in others. Thus, in spite of being slightly higher priced, Tata Ace sold 1 million
The above example demonstrates that innovation even if priced more, caters to a large market and ultimately leads to more profits. Thus, the key to successfully attract customers, retain them and simultaneously extracting higher profits out of sales is to innovate, generate and practice new idea.
Another example is the Bajaj’s 2-wheeler for women which targeted the female segment of the market. Bajaj realized the gap in the market as the 2-wheeler market existed exclusively for men and was an instant success. The 2-wheeler was designed to suit the females – it was relatively light as compared to the scooters for men, came in attractive colours which would appeal to girls and women and came with a promise to make movement for women easier, comfortable and quick. Honda soon introduced its scooty pep in the same segment and advertised heavily with Priyanka Chopra endorsing the brand and the evergreen tag-line of “Why should boys have all the fun”. This tag-line primary focussed on the young girls-college going and office going- who would enjoy the ride, feel independent, travel faster and at the same time look feminine as the scooty came in bright and attractive colours. This example proves that one should keep up with their competitors and should come up with a product on the similar lines as the competitor’s but with better quality and more features. Also, choosing a public figure as the endorser gives the product a brand image as people associate themselves with film stars and eminent personalities. Moreover, a catchy tag-line helps to connect with the target audience in a better and a more efficient way.
To conclude, the key to make a product successful is to keep the creativity high i.e. innovation, change, better and improved quality as the consumer’s tastes and preferences constantly change and they look for a variety for which the firms need to be proactive and produce according to the latent needs of the customers.
This article has been authored by Nishtha Verma from Birla Institute of Management Technology.
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