Introduction No entrepreneur can succeed without five basic "must do" things, which are, to identify the right markets, identify the right customer profiles, employing the right marketing strategies, having cost control and always having unique selling propositions. This article is an attempt to explain each of the above "Must do" things in some details, with real world examples.
Identifying the Right Markets Identifying the Right Markets is very important, For, everyone cannot sell to every single customer. This is particular true of customers where the price of products or services cannot be increased or should sell very cheap only. There is a market for everyone in India.
An entrepreneur needs to identify the right markets. For examples, there is a particular brand of potato chips from the MNC company called Pepsico. This American multinational sources the best potatoes and has a production process where the human hands do not touch the potatoes at all. The result: high prices.
As opposed to this, hundreds of entrepreneurs, through thousands of bakery shops, do manufacture the potato chips fresh and sell them for far cheaper prices. So, one gets a little more quantity, for okay quality. There are Kerala entrepreneurs who fry the potato and banana chips in coconut oil, right in front of the customer. This is a perfect example of identifying the right markets. There is a market for Lays, the Pepsico brand, but there is a huge market for the Kerala and the local variety of potato chips too.
Similarly, there is a huge market for sachet packet items. There is also a huge market for bigger pack items. Customers decide to buy very small packs or bigger packs, based on need, and on the basis of money in hand.
Identifying the Right Customer Profiles As far as identifying the Right Customer Profiles are concerned, for a real world perfect case study, please do go to Chennai, and go to T. Nagar. Go further to a shopping paradise on a street called Renganathan Street and spot this shop called "Saravana Stores". It is a world by itself. You can see cheaper priced utensils made of ever silver, copper, brass and what have you. On the upper floors, you can buy whatever you want for your daily needs. Even textiles. The fellow does not even allow you to go out for food. He has a restaurant, right in the same complex, selling food items, at slightly cheaper prices.
Guess his turnover? Rs.3000 crores per annum, only from this one shop. Many estimate it at much higher levels. It opens at 8AM and goes on till 11 PM. The customer is one who never ears more than Rs.15,000 as family income in 2018 prices. For every branded item, our "Annachi" as he is affectionately called, has a substitute, that is okay in quality, but will last for only some time. Every single customer knows this. For instance, a Rs.500 suitcase, will last two seasons. The price is the main consideration. " I can only afford this much. I find everything here" is what hundreds of thousands of customers say. The rest is history.
This is exactly what is called 'customer profiling", which simply means accurately telling who will be your target customer. Even for branded detergents, there is a discount. It is always more for less, at Saravana Stores. He sells on volumes, with wafer thin margins.
Employing the Right Marketing Strategies If you want an example of Right Marketing Strategies, just follow the high decibel advertisements of the huge retail shops selling textiles in T.Nagar, Chennai, you will notice one thing: the advertisement is only on Tamil TV channels. They simply swamp the customer, making him or her, come calling in person. No Amazon will work here. It is the feel, the touch. It is the pleasure of shopping. It is the best marketing strategy. The periodical discounts matter too.
Likewise, as an entrepreneur, he or she needs to figure out the best marketing strategy, which will vary from product to product, or even places where the products get sold. Internal accruals will always help. Growing entrepreneurs should never borrow too much money.
Having a control on costs Cost control is a must. Entrepreneurs who always try to come out with cheaper detergents, toilet soaps, shampoos, washing powders, talcum powders or even pickles, laugh all the way to the bank. They have stricter cost control, and are very successful in keeping costs and overheads low, since they sell in local markets and transport cost is very low. This is the secret of thousands of local brands. It all depends on what the entrepreneur wants to do. If the product is good, and thousands of customers buy the product,
he can enlarge the reach, without borrowing much money.
For, no budding entrepreneur can afford the high interest cost. It is also not wise to borrow for any expansion plan, if the market is not clear, or the customer profiles are not clear. You may even buy saris from Surat and sell them in the villages. But cash flow is a must, and is as important as the credit that you can possibly get from the seller in Surat. Do whatever you can to keep costs and overheads low.
If an entrepreneur is trying to build a brand, some local advertising through the cable TV network may be a very cost effective way of reaching the end customer, and the local language is very important. Never attempt to communicate in English or Hindi.
Always Have Unique Selling Propositions An Unique Selling Proposition(USP) is always something that is very unique about the product or the service, that attracts thousands of customers. The Chennai-based Saravana Bhavan, even today, has the best sambar, possibly the best in South India. It is now an international brand. Many do not know that the extra sambar is now priced. But customers, including floating customers, simply lap it up.
Similarly,Hamam soap is firmly entrenched in the customer's mind, as a health soap. This is the USP of the product. Even small entrepreneurs who sell local brands of potato chips and other snack items, can build good local brands. The USP? Value for money, based on the simple logic that the customer does not get his stomach punctured and go to the doctor at all!!
Similar USPs can be built in every situation. The aforesaid five "Must do" steps are learning from the real world of business. These are some good examples. There are many other such examples too.
So, if you want to become an entrepreneur, go ahead and follow the five basic "Must do"things outlined above.