Marketing Viewpoint by Ruth Winett
Five Ways To Anticipate Disruption in Your Market
Yogurt sales are falling, and air traffic has slowed down. Any product or service in any industry could experience similar changes. Businesses should prepare themselves for the impact of changes in technology and economics; new health and safety information; changes in taste and preferences; as well as changes in the competition. Following are five steps you can take to prepare for changes in your market.
What Happened to Yogurt and Airplane Sales?
Changes in tastes and preferences are behind the declines in yogurt sales. Market research firm Mintel estimates 2019 yogurt sales to be $8.2 billion or 3.6% lower than in 2018, and sales will continue to decrease. People are replacing yogurt with breakfast bars eaten on the run. ("Yogurt sales sour as U.S. breakfast culture changes," MetroWest Daily News, 11/19/19, p. B5).
Because they are no longer able to fill their wide-bodied planes, some airlines are selling their double-aisle planes. The main reason--reduced traffic in the Middle East. A second reason is a decrease in long-haul travel and air–cargo volume stemming from U.S.-Chinese trade tensions. ("Airlines Turn Away from the Biggest Jets," Wall Street Journal, 11/18/19, p. B1)
To prepare for changes in your customers, invest in market research focused on:
Knowing your customers. Read what they read; go where they go; watch and do what they do; and talk to your customers. What is in shopping carts instead of yogurt? Why are some software customers failing to renew service contracts?
Following the news. How will new political, technical, and competitive developments affect your business? Soybean farmers in South Dakota counted on crop subsidies to offset the decline in sales to the Chinese. Despite the trade war, the Administration cut these subsidies. Some farmers who followed the news might have planted smaller or different crops.
Evaluating the impact of economic trends. Low unemployment means difficulty in filling vacancies. IBM and other companies sponsor internship programs and recruit incoming college seniors, who have not yet begun their job searches.
Investing in R&D to remain strong. Chobani has opened an innovation center in Boise, Idaho, and is developing new products, including non-dairy coffee creamers made from a yogurt byproduct. However, while placing all of your company's "eggs in one basket" is risky, diversification for the sake of diversification is ill-advised. A small PC computer company began producing and selling instructional videos. They entered markets where they had no previous experience, and their new venture failed.
Watching your competitors. What new skills are they seeking when they recruit? What new locations are they opening? What advantages will the new hires and the new locations give them?
The only constant in the business world is change. While no one has a crystal ball, companies must gather information to help them prepare for the next disruption in their marketplace.
A Happy, Healthy, and Successful New Year!
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