I intend to set up a business soon that will promote a hobby of mine. I plan to be different by using indigenous materials and will use online marketing to promote this. I know there is more to setting up a business than just pursing a hobby with passion. Is there something else I should look into before I go into this head-on? -- Janet, Cebu City
In the many occasions where I sat as a panelist in business plan competitions of different organizations, I observed that some groups actually “fall too much in love” with their value proposition that they lose their objectivity. In fact, when confronted with the question, “What gap in consumer needs are you satisfying with your product?” I would usually get a long pause. They then try to explain that they simply liked the product or knew how to produce the product as the reason or reasons for going into that particular business. Not to contradict that entrepreneurial businesses succeed because entrepreneurs do what they like to do, but in order to have a sustainable operation, the thinking process has to consider the strategic implication of a business venture. This means thinking about the consumer's needs and then matching them with the creator’s capabilities to find the right fit. It would be dangerous to simply look at the side of the creator’s capabilities without converting them into customer benefits!
Some examples of brands and companies that flourished more recently by understanding consumers and their needs gap in the marketplace are C2 and Shopwise Hypermarket. Universal Robina’s founder and chairman emeritus John Gokongwei saw the trend towards customers wanting to lead healthy lifestyles and the gap in the market for healthier drinks. He directed that bottled tea be launched first in the Philippines and then to other parts of his Asia wide conglomerate. The marketers at C2 communicated the offer and positioned the product against soda enabling them to gain market shares from diet soda. In less than two years, the sales of C2 in the Philippines became bigger than the market size of the entire bottled tea industry when they first entered the market. It is now being produced and exported to many countries. As to whether it will go the way of Zozro’s Teabottle, the leading bottled drink in Indonesia, is something we can only speculate.
Shopwise Hypermarkets, on the other hand, saw the unfilled need of volume consumers who purchased a lot of groceries but were made to fall in line in regular pay lanes, unlike shoppers who bought less but got preferential treatment with express lanes. Shopwise launched the Elite card, much like the business class of an airline, where special accommodations were given to those buying more. These privileges include shopping using a blue cart instead of an ordinary gray cart, having the special attention of Shopwise employees when looking for products that cannot be located, having exclusive check-out lanes without having to fall in line, having a bagger to help unload products from the shopping cart into the cashier’s area, being able to sit down while waiting to get your bill, and getting free drinks and snacks at the bakery section. All these, aside from the usual free parking, and the assistance of a staff to push your cart and unload your purchases inside your car. How many of these privileges do you enjoy with your current supermarket or hypermarket?
You must therefore ask basic questions, such as
Who are my target customers?
What are their needs and wants?
Which needs and wants are not being satisfied and why not?
What are opportunities available in the marketplace?
Can I change consumer’s preference in my favor in a sustainable manner?
What are my competitive advantages?
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About the author
Josiah Go is Chairman and Chief Innovation Strategist of Mansmith and Fielders, Inc., (www.mansmith.net), the leading marketing, sales, strategy and innovation training company in the Philippines. He can be contacted at firstname.lastname@example.org.