Platt Perspective on Business and Technology

Productivity and abundance, and the paradox of choice – 3

Posted in startups, strategy and planning by Timothy Platt on April 28, 2012

This is my third posting to a short series on the meaning of, and the sometimes seeming-paradoxes of choice (see Part 1 for a discussion of these issues as they arise when considering inventory selection in a bricks and mortar storefront and Part 2 for a discussion as to how this applies to the online setting of a web-based storefront.) I turn in this installment to an aspect of choice and how it is offered, that arises with equal force and importance for bricks and mortar, and for online stores: marketing.

In a larger sense, marketing is a business’ way to tell its story, as to who it is and what it does and offers. And effective marketing conveys a clear message as to what makes that business unique as it stands out from its competition. Marketing conveys a message that at least seeks to show how that business offers unique value to its customers and from their perspective and according to their sense of value.

When marketing is offered in the sense and context that I am focusing on here, marketing is also a very selective filtering process. And I turn to a business type that has been important to me for many years now in my own work: supermarkets.

A large supermarket can carry over 100,000 distinct stock keeping units (SKU’s) in its inventory at any one time, that collectively address a tremendously wide range of customer needs, desires and preferences. A supermarket circular mailed out and offered in the store itself might include marketing information that touches upon and identifies a fraction and even just a small fraction of one percent of its complete inventory-encompassing range of products.

Some of the criteria that would go into selecting what to highlight in the circular, representing the business as marketing message are obvious.

• Seasonal items that consumers would look for and want now, would obviously be included while out of season items would not be.
Loss leader items and sale items offered specifically to bring traffic into the store would also likely be included, where offered at the store at all. Or at least representative selections of such items would be, perhaps with the accompanying message that more was also going to be available at special, discounted prices.

But effective marketing also conveys a message as to what the store stands for and of its values – and particularly where they connect with and are supportive of addressing marketplace and consumer values and needs. And a big part of this, and certainly when these fliers are sent out the store’s doors is in drawing in new and first time customers, and in bringing back the occasional customer who usually takes their shopping business elsewhere. And this brings in a different set of marketing material inclusion criteria that almost by definition would be less obvious and less known.

• What can you offer to the new customer, or the infrequent customer who has not seen reason to consistently come back to shop, that would prompt them to come through your doors?
• For online stores, what could you offer through distributed online marketing (banner ads and all of the rest) that would prompt that customer to visit your web site storefront?
• This is all about marketing more widely to the available marketplace with its larger potential customer base and in that you may very well be marketing with a focus on products that are new and nontraditional to your more regular and traditional customer base.

Taking that out of the abstract, consider the supermarket that is reaching out to a new ethnic community that has begun moving into your store’s catchment area and that would seek out seasonings and spices, produce and other items that are commonly included in their home cooking and in their comfort foods. So this second short list of bullet points is all about adding in and marketing your offering of the new and novel too.

And for any dynamic community, your marketing is in most cases going to be both selective in what it includes, and with that selection seeking to find an effective balance between the familiar and standard, and the new and novel – directed toward meeting the needs of both steady and new customers and types of customer. And that flier has to achieve this complex of goals, or at least attempt to do so while highlighting less than one tenth of a percent of what your store actually has to offer, at most.

• As a basic principle, selection in what to stock and what to market, and in how you manage your product placement – these are all about the numbers and about offering the customer the right amount of choice in the right way so as convey a message of choice and abundance – but without overwhelming them with needless complexity of choice that they would not see as offering them return value.
• And finding and staying at the right balance point in this is all about understanding and accommodating change. This is a dynamic process.

I am going to post a next installment in this series, turning to consider the issues of inventory flow, turnover rate and choice selection. In Part 1 when I cited the case study example of determining how many types of ketchup to offer on a store’s shelves I focused on how many. Think of this next installment as turning to the issues of determining which ones. Meanwhile, you can find this and related postings at Business Strategy and Operations – 2 (and also see Business Strategy and Operations.) I have also included this series in Startups and Early Stage Businesses.

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