Use Exclusive Customized Products to Grab Bigger Market Share
Unique approach for getting bigger
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Use Exclusive Customized Products to Grab Bigger Market Share: Unique approach for getting bigger
By Andrei Kossyrine
© Xpress Software Inc. - All Rights reserved
http://www.xssoftware.com
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Making manufacturing more profitable is not a "one size fits all" solution. This change in thinking and operations is also not accomplished in a single step or procedure change. The following is one of a series of topics designed to enhance the profitability of manufacturing in general.
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Very few companies do it well, but those who tackle this unusual marketing strategy enjoy sharp increases in sales.
So, how do you get bigger? The unique answer is: Approach industry giants (like Wal-Mart, Staples, etc.) and offer them exclusive customized products.
It's easy. They alter your existing product, call it their own and market the new version to their vast clientele. Change a finish here, a package or a product shape there, and voila, a "unique" custom product.
What's in it for the industry giant (and you)? Here are three items to consider.
Advertise: "We will beat any price on this product." That now famous and familiar attractive slogan is a guaranteed winner for the company. Of course, they will beat the price. Nobody else has the exact same product because they have customized it. (All major retailers use this strategy - LaZBoy, The Brick, etc.)
Pair an established and reputable identity with a common product. Customers perceive the commercial brand connection as making the product better than the standard ones available. For example, Disney puts its names on telephones and radios made by Motorola.
Appeal to a completely new target market with a customized product. Your customer and you can exploit niche markets that you've never reached. For example, electronic products marketed to Generation Y (16-30 years) must look different from electronic products marketed to Baby Boomers. Yet, these products do not have to perform differently. In fact, they could be the same but with a few "cool looks" that make them seem different. Consider the minivan and SUV markets - two distinct segments with really only three models and 95 percent of the parts are the same.
(Note: Many companies, like Palm and Nike for example, do not even manufacture their products - somebody else does it for them.)
What do you need to actively go after new markets?
1) An effective way to produce customized products in mass as well as in fewer quantities. The cost to make customized products should not be much greater than the expense to create standard ones.
2) Lightning-fast prototyping crew. When a customer makes a request, you have to respond with a prototype within days if not hours.
3) Ability to listen to your clients. Customization means listening to what they want to buy, not what you want to sell. What matters is that "their" customized products mean faster selling, bigger quantities and more profit.
4) Short time to market. Face it - your clients want it yesterday! They will not wait years until you come up with new products for them. Develop a customized product within a month or two.
5) Experiment! Think, create, vary. Test all your ideas on different markets. Monitor trends and make your products accordingly. When your new variations get more and more popular, continue making them and pushing them to various relevant markets.
Let's take a look at the recent marketing champion: Haier America. Its parent company, Haier, is one of China's largest consumer brands, with 30,000 employees and annual sales of more than $8 billion.
Haier America went from $0 to $300 million with almost no consumer advertising and cracked several tough US markets in record time.
It grabbed an estimated 50 percent of the US market for wine cellars and compact fridges. In addition, it won 14 percent to 38 percent of the market for window air conditioners and compact chest freezers from such industry giants as Whirlpool and Maytag. Major US appliance makers do not bother with product customization - but for a smaller company, like Haier, that may be the only ticket to the big league.
Now, let's take a look at another company in the tough Chinese market. For several years, major telecommunications companies pushed their typical products in China but met only modest success. A few years ago US start-up UTStarcom tailored its telephone products and services to Chinese customers' needs. Its inexpensive and intelligent products have made UTStarcom $2 billion in China since 2000. And this is only the beginning. Now UTStarcom plans to expand with inexpensive phones into India, Indonesia and Vietnam and later - into Africa and Latin America.
Be provocative in your marketing efforts and use your customized products as your "unfair" competitive advantage to grab new market share!
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Since 1996 Xpress Software Inc. has provided
technical assistance in lean manufacturing methods,
computer systems and business process automation
to maximize manufacturing profits.
Visit its website www.xssoftware.com or contact
Andrei Kossyrine at andrei@xssoftware.com.
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