This may be a tough time for you in business today. Let me open this edition with the same quotation that was used to open the last edition. “Tough times don’t last, tough people do”. It is the title of the book authored by Robert Schuller, a popular American preacher.
The most obvious thing that happens and which shows that tough times are around in any business is rapidly falling sales. When sales are dropping and, it is also accompanied by rising cost of doing business, nobody needs to tell you that the situation is no longer the same and something must be done fast or else the business will soon be history. It is like the business has hit the decline path of a product life cycle curve.
Some of us know what the product life cycle graph is all about. Let me try and explain it in a few words. Investopedia puts it as “the length of time from when a product is introduced to consumers into the market until it’s removed from the shelves”.
It is usually broken down into five stages, Introduction, growth, maturity, decline and death. It means that a product has a natural life cycle like living beings that are born one day and they go through life and one day comes when that person dies. Just like the time a person will spend on earth is due to a number of factors, part of which is how a person takes care of himself or herself, the same way the time a product or business will spend in the market is based on how one takes care of that business.
However, unlike human beings, whose time they spend on the earth cannot be made infinitely long, products and businesses can be made to live and last long for long stretches of time depending on how that business is taken care of.
Which position along the product life cycle represents the period of tough times. It is the decline stage. This is when buyers have turned their backs to that product or business. It may be also when the business is losing money based on high cost of doing business occasioned by spiralling inflation.
At the end of the day, it becomes a big fight to stay in business. It was said in the first post that, when tough times come along, one should revisit the foundation of the business, which means you should go back to the drawing board. That is also, do a fresh business plan for your business or for that product to guide you through the tough time and regain relevance in the market.
Coca cola, started facing tough times, particularly with Pepsi cola giving it hot pursuit in virtually every market it was operating in. It was revealed in several researches that people loved the sweeter taste of Pepsi cola. Coca-Cola, emboldened by the research results making the rounds (had even conducted one herself which proved the same assertion) went ahead to overhaul the taste of Coca cola to make it as sweet as that of Pepsi. It was a huge shake up of the Coca cola drink.
It was the most dramatic change that happened to the drink since it was invented about a hundred years ago, apart from the time the cocaine ingredient in the drink was removed. Although the taste change effort failed because the market rejected it, especially loyal Coca cola customers who never wanted Coca cola never to copy Pepsi cola, the campaign came along with a lot of publicity and noise and created huge attention that refreshed the demand for Coca-Cola again and the rapidly falling sales position was arrested.
The story of the taste change campaign of Coca cola taught us that there may not be anything wrong with a product, but with its business model, which is how a business is managed to generate income, or boost sales. The case of Coca cola taste change at that time brought up the need to make noise on a regular and sustained basis around a product and service. Coca cola has made sure that it has a promotion in the market at every given time, a practice that has helped the drink maintain its lead and market dominance.
Tough times are times you should revisit your business model and once you have an idea of what happened that made the tough times have a negative effect on your business, you need to move to quickly do something about it.
Kola Owolabi is a Fellow of the Institute of Management Consultants;
Source: Enterprisethrob.com