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Strategy     
 
This question has been closed, and points have been awarded.
Ways To Protect Our Interests In The Market
Posted By: kreozio* on 3/16/2005 9:54 AM (CST) 250 Points
We are a food manufacturing company. Recently we develop our business and start working with supermarkets. I was very surprised that all of them don’t care about the quality of our products – all they want is bottom prices products. But our policy is to produce always high quality products. Because of that our trademark is not cheap and we can’t reduce our prices. And yet our goal is to work with most of the supermarkets. If somebody has any idea what must be our strategy in relations between us and ways to protect our interests. Please help.

Posted by: blanalytics Member Response
3/16/2005 10:29 AM (CST)
Supermarkets do care about what drives sales in their category (e.g. category management). If your products or brands do that, and you can prove that, then you have a lot of leverage. I have done this before and would be glad to discuss.
 
Posted by: kreozio* Author Response
3/16/2005 12:03 PM (CST)
Ok. In my opinion our products are good enough to take place in supermarkets.Why? We have 10 years experience manufacturing food products; our products are well known on the market and I can say that most of them present at the stores; our trademark has good name on the market and is associated with high quality food; we have more sales than our rivals (not for sure but we believe so); our company have won 3 gold medals for high quality and innovation from our national fair for foods and drinks;
Nevertheless I was told that regardless of what my product is and what the trade mark is we have to sell our products at a enormous(for our company)discount.
Yes I believe we are good enough.
What do you think must I do , blanalytics?
 
Posted by: querciwa Accepted Answer
3/16/2005 12:08 PM (CST)
In my opinion you should first position and segment supermarkets for the given food category...for sure some market chains are driven by "lowest price every day" but other are driven by level of service and others by merchandise quality.

You should be able to find easily in the specialized press some kind of positioning analysis of supermarket brands for the the given food category you are in the business of. Based on that analysis, you may decide that you don't want to serve each of them but only those whom your food product features (incl. price) fit with.

Generally speaking, a Customer must be analyzed thru two dimensions: how profitable it is, how much does it cost to serve it. This is a common 2x2 table analysis that you can either find in the specialized press or you can create by yourself. Would you need any further advise or help, I'll be more than happy to voluntarily support you.

For your reference, I enclose a link to a powerpoint pitch about Kellog's cereals marketing...you will find some interesting pictures on supermarket positioning and other strategies to push on sales, that you may find useful for your needs.

http://sbaweb.wayne.edu/~ssasser/pp29.ppt

Hope this helps
 
Posted by: Peter (henna gaijin) Member Response
3/16/2005 1:54 PM (CST)
I agree with querciwa. In my area (Silicon Valley of CA), there are a variety of grocery stores aiming at different markets. Safeway and Albertsons are the general ones, Grocery Outlet is a low price, often closeout products. Whole Foods is high price, healthy/organic products. And Lunardis and Draegers are high price, high service stores. You should choose which stores in the areas you want best fit your product strategy, and target them.
 
Posted by: koen.h.pauwels Member Response
3/16/2005 6:10 PM (CST)
While targeting the right supermarket (i.e. sharing your focus on high-quality for a price) is important, you will anyway want to put together a very convincing presentation, including:
1) how other distributors have adopted your product with great success (some manufacturers advertise their early success in supermarket-oriented magazines),
2) exactly how you generate consumer pull for your product and which funds you are committing to it in the future
3) how your brand is going to contribute to the retailer's bottom line, in terms of category margin and store traffic (see above answers), but also in attracting the right kind of profitable shoppers: people who buy your quality product typically buy other high-margin products while in the store (I am currently working on developing software that allows manufacturers to do just that)

In other words, you want to convince your target supermarket that adopting your product will benefit them, and that not adopting your product will harm them (eg because their competitors will: point 1)
 
Posted by: mgoodman Member Response
3/16/2005 10:38 PM (CST)
I think you may be surprised to learn that the supermarkets have an enormous amount of power in deciding which products succeed and which don't. If they're telling you your prices are too high, or their margins are too low, they're probably right -- even if it seems unfair or unreasonable to you.

Without their cooperation and acceptance, your product quality and your brand name are not likely to be worth much at all. You need to have a plan for working with them, not against them. It's frustrating, I know, but it's the way you have to play the game if you want the big volume they represent.

You may be well advised to seek some professional help in the form of a consultant with retail grocery distribution/sales experience. This is an important decision for you and your company. Get the advice, guidance, and direction required to make the right decisions.
 
Posted by: kreozio* Author Response
3/24/2005 12:24 PM (CST)
Thank you all.I really appreciate your help!
 


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