Sales David vs. Goliath

After the Monopolies and Expropriation post, I started thinking about my own experience against larger competitors. While working as a consultant for a medium-size local soda company in the Caribbean, I remember the sale's entry barriers we had against large soda corporations.

With their economic power, large soda companies were able to place cooler machines in small stores where, even without an exclusiveness contract, store owners were told that if they introduced other sodas like ours, the cooler machines and their well-known products would be taken away. They would also sign exclusiveness contracts with schools in exchange of painting their basketball courts or installations with the brand name. When a new product was introduced in larger retail stores, their older products would not reduce their shelving space for the new inclusion, but our assigned shelving space would be the one affected and products would be taken away and arranged by their own merchandisers. We were constantly talking to store’s employees in order to respect our space and had to make greater merchandising efforts.

When we hired some sales supervisors that worked earlier for one of the large soda corporations they admitted to us: “We used to break your returnable soda bottles.” Soda bottles are the company’s property, not the stores, and have to rotate at least 3 times in order to pay for its own materials. If you break them before that, you are affecting the company’s costs directly. Large-corporation’s sales workforces would have instructions to exchange their own brand bottles instead of ours to the small retail stores and then break the bottles. This meant having to create detailed inventory controls and having to constantly produce new bottles.

Here are some tips for small but rough-fighting in sales:

1. Do not fall for a dirty game, play tough but without illegal or unethical practices. If consumers find out you are playing dirty your brand will suffer more than a well-position brand. On the contrary, if you are small and being treated unfairly, your brand can have the “David vs. Goliath” effect where everyone roots for the weaker.

2. Show your product’s own advantages without talking bad about the competition. Our sales force would have to convince retail stores to introduce the products even though they were not well known and gave no additional bonuses such as coolers or POP material. You won't get sales just by saying you are better than international brands, client's won't buy the idea because perceptions are strong. Give store owners and even their costumers a taste of your products so they gain trust in your brand and let them build their own appreciations. At the end, some small stores even used the competition’s coolers and stands to place our products.

3. Always show why having variety is important. Tell store owners how they can’t always stick to the usual brands and how they will give a better service if they have a wide variety of products, especially in price or quantity variations in SKUs.

4. Customer attention and personalization is essential. Larger corporations may have better products, quality perception, advertisement, etc. but as a small company you have to offer a better personalized attention to your clients, even if it includes more frequent sales visits or longer taking sales.

5. Have at least one clearly differentiated product. For example, the medium-size company had a Coconut taste soda, which none of the large international corporations managed and became a flag product.

6. Have good relationships with Merchandisers and all store’s employees. Remember these are the people that are going to help you have a better shelving , product arrangement, presentation and even advertisement materials. It can be the difference between having your product infront of a brand or being in the back of another brand. They are sometimes even the ones that tell the owner what sells and what is stuck in inventory. Never underestimate their power and influence.

7. Act local. Work along with society and create close connections, sometimes large international corporations can’t detect and satisfy local needs.

The picture for this post was taken from a special event we held for “Chubby” an imported soda brand for kids, commercialized (but not produced) by the local soda company. This is what I mean with point 7.

1 comment:

  1. Mike IMT8.9.10

    Excelente post... diferenciación y packaging tambien son aspectos claves. Pero hay un factor emocional que al menos funciona muy pero que muy bien en los paises latinoamericanos: "Este producto esta hecho por manos "inserte nacionalidad aqui" y puede ser que alguna de esta gente sean amigos o parientes tuyos". Toma chantage emocional jajajaja. Funciona.