Hong Kong Trade Development Council Presentation Final Version
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The document discusses strategies for small and medium enterprises (SMEs) to market to North American corporate buyers and retailers. It emphasizes that SMEs need to focus on innovation, building their own brand, and meeting retailers' needs in order to succeed. Specifically, the document recommends that SMEs (1) innovate through new product features and functionality to drive higher sales, (2) develop their own brand identity rather than relying on captive manufacturing, and (3) understand retailers' true needs which may differ from what they say. This will allow SMEs to transition from being product suppliers to becoming innovative brand builders.
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Hong Kong Trade Development Council Presentation Final Version
- 1. Marketing to North American Corporate Buyers & Retail Executives Understanding the Role Innovation Plays in SME’s Success
- 3. Understand the North American Retail Environment
- 8. But Wal-Mart Is Having to Change
- 9. “ ... ‘We want to encourage Wal-Mart customers who don’t usually come to us for apparel to cross the aisle and see what we have to offer … Fashionable, trend- conscious women represent an important segment of our customer base’ …” DSNRetailing Today , October 24, 2005, “Wal-Mart Launches Metro 7 to Add to Fashion Flair” Quote from Claire Watts, Wal-Mart Executive Vice President of Apparel and Home
- 13. What This Feels Like for a SME
- 15. Marketing to the NA Retailer Exposure Time to the North American Market Introductory Stage Retail Partnership Stage Autonomy Stage Parity Stage Sales Growth Opening Price Point (OPP)) Products Emphasized Mid-Price Point (MPP)) Products Emphasized Premium Price Point (PPP) Products Emphasized
- 16. Many SMEs Today Exposure Time to the North American Market Introductory Stage Retail Partnership Stage Autonomy Stage Parity Stage Sales Growth TRANSITIONING The Copy-to-Create Paradigm
- 18. Internalize How Industry (Both Manufacturers and Retailers) are Responding
- 23. Building Block #1 INNOVATION
- 26. Marketing to the NA Retailer Exposure Time to the North American Market Introductory Stage Retail Partnership Stage Autonomy Stage Parity Stage Sales Growth Opening Price Point (OPP)) Products Emphasized Mid-Price Point (MPP)) Products Emphasized Premium Price Point (PPP) Products Emphasized Captive Manufacturing, No Brand Equity Brand Matters – Initial Differentiation Lifestyle Branding
Editor's Notes
- My contribution to today’s discussion is somewhat different than the other presenters in the sense that I want to talk about the typical transitions SMEs go through as they decide to come into North America with something other than a business plan wholly emphasizing export. When your business does get far enough into its growth cycle to recognize a need for a presence in North America, it will have meant you have challenged some paradigms that commonly present limitations to an SMEs growth – one of which is a paradigm we call the “COPY TO CREATE PARADIGM”. But more on that later.
- Briefly characterize the NA retail environment. Discuss how SMEs need to respond. Casually frame that response around the corporate buyer’s expectations – what they are looking for. INNOVATION A MEANINGFUL BRAND MEET THE RETAILER ON THEIR GROUND
- Marketing slogan “EVERDAY LOW PRICES”. Purchasing model from Lopez @ GM. Emphasize logistical advantages. Consolidates rural retail markets. Dominates market segments (segment sales many times equal to all of #2-5 of segment players’ sales). But diminishing returns are being experienced with their business model.
- Wal-Mart, once and no doubt still known for its unique and unrelenting focus on price, is having to develop a more nuanced strategy which is going to reverberate around the world, and impact SMEs who do business with them, or who do business in NA retail in general.
- Political problems are interesting, but not the point at this moment. Point is the maturity of its cost-advantage as the primary success of its business model. OEMs who have strong brands are not encouraged. TTI/Ridgid/Ryobi Low-cost emphasis has stripped OEMs of the ability to do real R&D. B&D/Dewalt/Miter-Box Saw
- What Does All This Mean for the SME? Proprietary branding will wear off. Market stratification b/w commodity products & products w/ brand value or innovation. Retailers are hungry for innovation. Product line extensions are not going to move a debt-ridden US consumer. New products have the best chance at this. Additional market consolidation. The consumer trifecta: Record household debt levels. Changing job market for blue-collar workers (i.e. the vanguard of the US economy – its middle class). Apathy about “new” products. Over-inflated home sales.
- As manufacturers, you have felt this differently, in what many characterize as deflationary pressure. Retailers have gained downward price advantages. The premise of the retailers is that always lower prices will continue to extend the US business cycle indefinitely … but that is not true … At some point, the consumer matures, markets flat-line. Consumers will want something new to begin buying again.
- This may all seem somewhat pedestrian, but for many Asian OEMs, perhaps many SMEs in this room, the last 10 years have been characterized by growth which owes much to ….