Replying to LO30451 --
At said:
> ..B began to sell inferior imitations of
> products in the same sector. B prides itself in having gained the biggest
> share of the market. There are also competitors C, D, .... in the field.
> But B tries to get A out of the way so to have a monopoly by taking over
> C, D, ....
My comment:
Depending on the market, it is normal that the priceleader has the largest
marketshare, even with an inferior product. Trying to fight this MAY be a
futile exercise.
At said:
> What can A do? My advice was to make closer contact (more fruitfulness)
> with customers so that they can decide for themselves whether they want to
> buy from A or B. Unfortunately, the products of A are complex since
> providing for the different requirements of individuals (sureness and
> otherness). Thus they have to take into account the functional illiteracy
> of many potential customers in the complex information supplied with their
> products. (First as teacher and then as lecturer i found functional
> illiteracy to be the greatest obstacle for learners.) B just attract any
> unwary customer with its dreamy visual graphics. B also pays its
> distributors in advance to push its products. My advice to A was to alter
> the information on their products such that it also connect to the
> functional illiterate.
My comment:
This is helpful, but my own experience in marketing is that the buying
process appears more techno-rational than it really is. It is more a
cocktail of fear, pride, pleasure, pain, gambling etc. Future benefits
usually have a very steep discount curve. There is a fair amount of
manipulation involved in the normal salescycle, and often the most
effective salespeople are simply the most clever manipulators. They
know how to play on emotions. Moreover, lower price is a very powerful
weapon. A dollar left in the pocket is a bird in the hand ;-) The other
day on TV program a rich man was in a gameshow and he had the choice
between taking USD 500 or take what was hidden behind a door (whcih
could be nothing or something substantial) He chose to take the 500
that you'd think he didn't really need. Behind the door was a luxurious
car... I also believe that in a country like SA, the discount curve for
future benefits is much steeper than in more stable countries; there is
more of a one day at a time mentality due to the higher risks
associated with the future.
With regards to multiple functions, you may want to analyze how
important they really are to most customers buying decisions. Also,
keep in mind that the product you are selling is probably a small brick
in a lot of bricks in the customers daily puzzle, so don't overestimate
the amount of mental and other resources the customer is willing to put
into the buying process. Most likely the buying decision is based on
one or two heuristic "trigger points" What are they? Keep it simple and
hit them over the head with the message is usually good marketing
advice. Despite all the hype about consultative selling etc., the best
salesmen are probably still the best closers.
At said:
> However, i cautioned A that B will keep on causing conflict since A is the
> standard at which C, D, ... as well as some of their customers compare
> themselves. B knows it and that is why B is bent on denigrating A. The
> only way to resolve the conflict is to wait until B gets into big trouble
> because of its almost unethical practices. Some or other of its products
> will sooner or later do serious harm to its customers. Only then it is
> time for A to step in and let the law do its work. There is no
> prescriptive law at present. B will not survive this catastrophy of its
> own making.
My comment:
If this is a very likely scenario, then this sounds like a viable
strategy. Think about how you should position yourself before this
happens.
At said:
> I also advised A that some Team Learning is required here. I had in mind
> A's director of this special line of products, a strategic planner, a
> marketing guru and yours truely, a jack of al trades. The focus should not
> be on curtailing B's actions, but on making better effective contact with
> potential customers. More well informed customers ought to see through B's
> marketing tricks and avoid its products.
My comment:
This may be a viable strategy, depending on the product and market at
hand, but don't overestimate the amount of technorationality involved
in the customers buying process.
Hope that helps,
Terje
--"Terje A. Tonsberg" <tatonsberg@hotmail.com>
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