Blue Ocean Strategy Translated To Actual Tactics For Small Retailers To Succeed

Database To Track Strategic Buyer Groups
An advanced marketing strategy for small retailers is to focus on key strategic buyer groups within their industry. This can be done readily by leveraging a small retailer’s localness to stay close to key buyer groups. Concretely, a data base of buyer preferences must be maintained and updated regularly. In this database, a retailer should record the following information about each customer:
1. All Merchandise Purchased
2. Any Special Treatment Given or Requested
3. Family and Friends Mentioned or Who Are Current or Potential Buyers
4. Relevant Changes In Living Situation
These pieces of information will help retailers identify and target groups of buyers willing to trade up, or more importantly for this economy, maintain the price for performance balance. For most small retailers, it is important for them to stay away from trying to entice Wal-Mart preferring buyer groups. They usually can not compete on price – and should not waste resources targeting buyers who trade down on price for lower quality, service, or performance.

How To Effectively Lower Prices For Maximum Profitability
There is a case where lowering prices for small retailers is effective and desirable – but without trading down price for performance. A retailer can maintain the price performance proportionality by offering small samplings of items or services for proportionately lowered price points. This accomplishes several objectives:
1. Increases Opportunistic and Incremental Sales
2. Allows Sampling of Higher-Priced Product Offerings
3. Obtains Price-Conscious Buyers W/O Competing Directly With “Big Box” Retailers

Small Retailer Example Of Lowering Price Points
Surfin’ Seafood, a Seattle-based seller of freshly caught seafood, is a great example of a small retailer offering a sampler type package to price-conscious customers. They expect to lose about 50% of their sales this holiday season as a direct result of corporations in the area cutting back on their discretionary expenditures of packaged seafood as holiday gifts for employees and customers. To regain some of this projected loss, they introduced a $50 gift package with fewer pieces versus their typical packages which sell for between $85 and $195. Surfin’ Seafood’s offering is a classic example of moving down price points to capture substantial incremental sales without disproportionately sacrificing performance, perceived quality, and the reputation that a small retailer has achieved. This kind of move can be highly beneficial and profitable – but it is tricky and must be done strategically and with care!

Three Characteristics Of Good Blue Ocean Strategy For Small Retailers
In the final analysis, for a small retailer there are three Blue Ocean characteristics of a good strategy. First, diverge from targeting price-elastic buyer groups, and understand the key dimensions of high utility for your customers – record key information about them and all customers. Second, focus on buyers willing to maintain and continue buying in a given price range even in this economic downturn – leverage your localization advantages such as closeness to key customer groups and understanding many aspects of the local market. Lastly, develop a tagline or brand motto which concisely differentiates your offerings in the market – and more importantly, among your key buyer groups. Small retailers can do better than just survive using these strategies – their businesses can prosper as their nimble boats sail the Blue Ocean Seas unfettered.

Nikon’s Perfect Picture: Returning to Profitable Growth

Nikon’s Current Profitability Drop
Nikon faces challenging times these days: its net profits fell in its fiscal first quarter to 17.95 billion yen from 23.45 billion yen in the previous year.  According to the Wall Street Journal’s August 7th edition, Nikon had a 23% drop in net profit.  Interestingly, revenue in Nikon’s camera division rose 14% to 165.2 billion yen, boosted by strong sales of single-lens-reflex (SLR) digital cameras.  Unfortunately for Nikon, however, costs wiped out robust sales of its high-end digital cameras.  This growth in costs are due partly to initial expenses involved in the launch of new products such as its D700 SLR digital camera and advertising costs in the U.S.  Additional challenges include rival Canon, who is expanding sales to newly retired, deep-pocketed hobbyists, and people who switch to digital camera from traditional film.  This is a key marketspace because many of these customers buy expensive inter-changeable lenses which lock in future profits for their cameras’ manufacturer.

Focus On Customers’ Lifestyle and Usage
What can Nikon do to stem this profitability slide?  Focus products, advertising, and marketing resources around lifestyle and usage dimensions.  From a lifestyle perspective, Nikon can focus on people who are newly retired, young parents, avid vacationers, special event recorders, party throwers or goers, etc.  From a usage perspective, they can also focus on professional photographers, beginners, outdoor events, indoor events, portrait pictures, action or sporting events, night shots, kids, etc.  The importance of this orientation is to gear and develop models and features based upon strategic and key lifestyle and usage dimensions, and then target given marketspaces.  Equally as important, targeted marketspace selection will minimize ad costs and optimize market coverage.  Similar to its first fiscal quarter this year, Nikon can absorb a substantial ad cost hit initially to develop brand equity among strategic buyer groups, but these costs can and will be lower once the market has been developed.

I am willing to talk with blog participants live via phone for free consultations.  I am also available to companies, businesses and organizations for consulting engagements and speaking opportunities.  For any of these request, E-mail me .  I will help my readers in any way possible – I want to share my knowledge and expertise.

Mike Bolden marketing expert and blue ocean strategist – writing to inform, enlighten, and inspire.  Author of forth coming book, “Owning Marketspace”.  Available for consulting and speaking engagements.

NIkon Nikon’s Profitability Drop High-End Digital Cameras Canon Lifestyle and Usage Dimensions Marketspaces Turbo Tagger