Optimising the 4Cs as a competitive advantage…
The 4C combination of consumers, customers, communities and competitors can represent a route to corporate growth when others are fighting for survival.
Essentially, real understanding of the brand’s consumer requires that the supplier forget the propaganda and step into the consumer’s shoes, explore the brand’s potential ability to satisfy consumption needs, more effectively than alternative brands and own-label. This means systematically auditing brand deliverables in terms of performance, price, presentation and place from the point of view of the consumer and their consumption needs, versus the competition. Next the supplier needs to make a similar assessment using the consumer’s shopping needs (choice, availability, price, convenience, opening hours, atmosphere, display and opportunities for impulse purchase) within a real-world store environment (‘fair-share’ co-existence with competitor brands and ‘over-faced’ own label, out-of-stocks, confused signage, varying shelf-lives, etc) again versus the competing brands and own label.
This realistic assessment of the combined consumption insights and shopping insights and the resultant synergies will enable the supplier to optimise brand positioning in the eyes of target consumer-shoppers, effectively tailoring to consumer need and attempting to be unique in the process.
Seeking and finding the target consumer-shopper in the traffic flow of the customer-base will help to qualify some customers as high-invest. Key measures include Potential, Partnership, Profit and Performance (for details see selection of a good trade partner)
Having chosen the high-invest trade partner, it is necessary to analyse brand/own-label balance on average and within the category, the generation-mix of own-label reached by the retailer (4 generations from generic, to me-too, to brand-substitute to brand-exceed), and factor this into the retailer’s ability to achieve and demonstrate compliance in the aisle.
The next step is to conduct a separate Buying Mix Analysis from the point of view of key functions within the retailer’s decision-making-process, compared with the competition. Depending upon the complexity of retailer-supplier relationship and scale of potential business, these functions could include buyer, logistics manager, supply-chain manager, stock-controller, marketing/merchandising manager, operations manager, finance manager and owners of the business. Each will have an individual perspective on brand and supplier, effectively comparing the offer and the supplier’s ability to meet their functional or job needs, versus available competition.
The skilled supplier then has to fuse their combined needs into an achievable blend or compromise that can be delivered profitably. This tailor-made approach, with its attendant costs, can obviously only be applied to the true high-invest customer. All others will have to be offered the standard package and serviced appropriately.
Having optimised consumer insight and shopper insight, within high-invest trade partners, it is crucial that the supplier manage the Threats posed by communities with unsatisfied needs. Essentially, these include regulatory/legal/political developments, unanticipated cultural/social and technological change, and perceived abuses arising from trade concentration/power/internationalisation. All have to be assessed in terms of their ability to present obstacles in implementing marketing and trade strategies. It is important for the supplier to judge their ‘manageability’ by labelling them as things which cannot be influenced but affect the supplier, things which supplier and customer can influence, things supplier and customer can do together, and things the supplier can do without the help of the customer.
Finally, real competitive edge can be achieved via the completion of a risk-analysis to help in identifying contingency plans in the event of things going wrong. This involves listing seven things that could go wrong and then assessing each in terms of impact upon the business (high, medium or low), and chance of occurrence (high, medium or low) and then agreeing contingency plans in the case of high impact and high chance of occurrence.
By the same token, the upside can be explored and the corporate appetite for change increased by analysing opportunities using the same process. This means identifying seven things that could ‘go right’ and labelling them high, medium or low in terms of impact and likelihood of occurrence.
All else is detail…..
