When we think of probabilities, they are big. Even playing the what if... is great. When we think about the product that we are dealing / making, we think about wow! The market is so big. We think, wow, we can supply to them. Low cost, no problem. Then we look at the high margin product and think. Wow, this is good. It is very difficult to be high margin and low margin at a time. Both things have different mindset. For marketing, we have to look at HUL. It is a school where marketing is taught. They can do this. They have Wheel as well as they have Rin / Surf Excel. They have Lifebuoy as well as they have Dove, the extreme end of high margin.
HUL has a clear strategy. They don't sell this high margin and low margin product together. These brands are managed separately. The people (except for the senior management) behind the brands are different. They don't advertise the Dove and Lifebuoy at a time. They do it separately. HUL has the wherewithal to do this. Not SMEs. They do not have enough manpower. And mindset is the most important thing. If they get into the mindset of costing less, then it will be really difficult to come out of it.
We need to identify a section in the market whom we can serve. Once this section has been identified, then you can tailor offering accordingly. If you identify a volume based part, then you should be very low cost. In fact, so low cost that competitors will hardly come near you. Once the zone is identified, you can target them. Like whether your target is school going children, college going children, young woman, married woman, middle aged people, old people, etc. Once this is identified, then it becomes easier. If you make everything for everyone, then your resources will have to be divided. This increases the resources that can be put to work and hence, the cost increases in near term. Of course, if you consider this as cost. Actually it is an investment. Isn't it ?
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