Question

Topic: Strategy

Limited Budget + Copy-cat Competitor = ?

Posted by Anonymous on 9/22/2005 at 5:02 AM ET 250 Points
Well I could certainly do with some professional advice on the situation I've found my business stuck in lately.

With a limited budget I'm attempting increase our customers loyalty and prevent them being stolen away to other shopping areas and by a copy-cat competitor who opened VERY close-by a couple of years ago and seems to exist just to copy everything our store does...

WHERE WE ARE
I run a medium-size pet store right by a gorgeous beach here in New Zealand in our biggest city, Auckland. We're surrounded by a neighbourhood of parents of primary and intermediate aged children (ages 5-12) as well as a growing number of early retired folk.

To look at our area visit [inactive link removed] and my very basic website at [inactive link removed]

HISTORY
3 years ago we were by far the best of about 4 pet stores within a half hour driving radius. Now we're one of 10, some of the stores have improved dramatcally, 1 store is about 30 seconds walk down the road from us in the same set of shops we're in and a growing number of supermarkets are now selling a big range of pet products. We have 3 big supermarkets within a 15 minutes driving radius of the shop.

WHERE and WHO OUR CUSTOMERS ARE
Our customer database shows most customers visit us fortnightly to monthly and live close, within 15 minutes drive of the shop. Most customers are female. have a young family and usually visit with their children. We have very few teenagers come to the store.

OUR APPEAL + OUR COPY-CAT COMPETITOR
As vibrant and appealing as our shopping area is, foot traffic is definitely decreasing and the head count in-store is down. We already know we attract a lot of customers by always having lots of animals in-store (many are shop pets who live here permanently) and by being the last remaining pet store to have the pups in open pens able to be patted. I also employ good-looking, female, hugely enthusiastic staff, train them to the eyeballs and customers frequently comment on how friendly and knowledgable they are, especially compared to the staff at the other pet store. Every promotion and special event has been copied by the other store within days of us doing something which is hugely frustrating.

WHAT WE DO NOW
Common things we do currently are 1) special events to attract kids and therefore their parents along with them 2) colour in competitions every 2 months for the kids 3) advertising the puppies in-store every week in the most widely read paper which gets a great phone response 4) stock the same brands and products as the other store and match but do not better their price (I don't want to get into a price war) but only promote the products which are exclusive to us (we stock a big range that our suppliers provide only to us) 5) work incredibly hard to impress customers and always go that extra step so we have a number of customers who cannot speak highly enough about us and our word-of-mouth is excellent 6) monthly specials on our exclusive products 7) lots of package deals for pets, such as complete fish-tank set-ups, bird cages ready to go to match the species etc.

HELP!!!
Advice or even just insights into out situation and the best ways to use our budget wisely would be appreciated. Attracting new customers would be great but I'm happy just to get ideas for turning BROWSERS INTO BUYERS, BUILDING LOYALTY from existing buyers and INCREASING REPEAT BUSINESS / return business .

So far I've thought of a basic LOYALTY CARD that rewards customers with REWARD DOLLARS earned after every 10th visit (10% of their spend from the total value of 10 visits could be used on anything in-store).

I've also thought of a PUPPY BIRTHDAY CARD sent out when every puppy we sell turns 1 which includes a card, catch-up letter with pet care advice and lots of vouchers for our exclusive products. We sell a bag of petfood with every puppy and most puppy owners are local yet our food sales have not been growing.

We have a database of about 800 customers that we rarely use and a website we do not promote, both due to time restraints.

SO ... your thoughts? your ideas? your opinion? your insight? All welcome!


[Moderator: Inactive link removed from post. 2/14/2011]
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RESPONSES

  • Posted by michael on 9/22/2005 at 10:35 AM Accepted
    Petgirl,
    You seem to be doing all you can to attract people who are currenly looking for pets/supplies. Keep doing that. However, it's really time to spend some energy on getting future customers. Consider 2 groups of people who buy pets:

    1) Young people moving away from home who HAD a pet
    2) Young couples who have just had children.

    These are not areas that you target with general ads. These are done via directmail...so they are not copied by your competitors

    Also, I think you're in a similar situation as a shop that sells musical instruments (stick with me). Many people consider pets but don't know the right pet for their family situation. Therefore your ad should focus on helping people decide on the right pet for them. You would offer either a pet-selection guide or seminar. They need to contact YOU for details and when they do..bammo...you have them. DON'T FORGET TO GET THEM IN THE DATABASE.

    If you want, e-mail me one of your ads and I'll show you how to this works.

    Michael
  • Posted by mgoodman on 9/22/2005 at 8:57 PM Accepted
    You did a really nice job of explaining the situation. One of the best briefs we've had here lately.

    As a result, you're getting some good input from the experts.

    My suggestion would be to do some market research. If you can afford a professional researcher, that would be a good first step. (Even focus groups would be a good start.)

    What you want to know is how people decide where to shop for their pet supplies. What are the most important considerations, and how do each of the competitors stack up on those criteria? What do they like about their favorite retailer? What do they dislike? What unmet needs do they have when it comes to buying pet supplies?

    If you could figure out why your customers are loyal to you, and why others are loyal to each competitor, and why the switchers switch, you'd be way ahead of the game.

    For example, you might learn that there's a large segment of the market that is stricty into price. They probably aren't your prime target. There are others who will always go to the closest store. That's going to be a little tougher, since you are so close to at least one competitor, and supermarkets are all over the place.

    It sounds like SERVICE is your real strength. If it turns out you can identify the segment that really values service, you can target your advertising to them, and stop trying to convert the price-shoppers. Etc.

    Good luck. You're asking the right questions. Try getting to know the people in your target audience. THEY have the answers. Don't try to sell them on anything. Just ask high-gain questions and listen carefully to their answers.
  • Posted by Carl Crawford on 9/22/2005 at 9:54 PM Accepted
    You may want to read this question and the articles a linked to:

    https://www.marketingprofs.com/ea/qst_question.asp?qstID=9920

    They answer question 1 and 2.

    I am only a marketing student from Otago so cant answer 3.
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