Hi ALL,
Could you please help me with these 2 questions:
1. What are the possible reasons for a low sales growth rate?
2. What framework should I use when answering the question?
Kind Regards
Low sales growth rate
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For the framework, I'll apply the three 3 C's of Marketing and look at them through the prism of economic and non-economic factors -
Customer - Economic : Low disposable incomes, high unemployment leading to a move to cheaper alternatives or maybe a reduction in the use of the product if its a discretionary item. Also Change in customer preferences leading to an industry-wide slump, the emergence of substitutes should be looked at.
Company - Focus on other areas of business, reduction int he marketing spend, increasing costs making the products expensive, quality of the products deteriorating
Competitor - competitors reducing their prices, spending more on marketing, making better products, using newer channels, promotions to take away our growth
Hope you find it somewhat useful.
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Hi!
It depends very much on the industry. In some cases (Growth strategy) I will use a broad structure, in others (e.g. “how to increase the excessive luggage revenues for an Airline”) I will use P, Q and the Process. Here is the broad structure that you can adapt to your industry:
Analyze the market:
- Size and growth rates
- Segments (geographical, customer, product)
- Distributors / Suppliers
- Regulation
- Key market trends
Analyze the competitors:
- Market shares, growth rates, profits
- Product / customer / geographical mix
- Products (Value proposition)
- Unit economics (Value proposition vs. price vs. costs)
- Key capabilities (Distribution, supply, assets, knowledge, etc)
Analyze our company:
- Market share, growth rates, profit
- Product / customer / geographical mix
- Products (Value proposition)
- Unit economics (Value proposition vs. price vs. costs)
- Key capabilities (Distribution, supply, assets, knowledge, etc)
How to increase revenues:
- How to increase the scope: Product / customer scope, geographical scope
- How to improve value proposition (How to fix your weaknesses and improve your strengths; Potential increase in price and volumes)
- How to answer the competitors (Unique or hard to build property and contracts; Customers / suppliers / complements with lock-in; Reputation and relationships; Organizational capabilities; Product features and know-how)
- Other benefits of scale (Spreading Fixed costs, Change in technology, Bragaining power)
Best!
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