Once Mr. Sam Walton – Founder of Walmart was asked by someone that “sir what do you want to say about the current recession…??? He said yaaa…. I had looked at it and I decided not to participate in it.”
But usually during recession people get scared and start cutting expenses. Manufacturers feels an unsecured time. Because, recession means a period with very less demands and very less sales turnover.
In India, after a 50 days’ tough period of Demonetization, all Indian Stainless Steel Utensils manufacturers are still facing strong effects of recession. Their storages are full of finished stock and traders and retailers are not able to release any new orders. They hope for the improvement in coming season and they have started manufacturing new stock.
But experts from the SS utensils industry says that the current market situation is too bad.
In such situation, people follow some commonly used traditional techniques to face the recession. They are….
Do’s and Don’ts in recession – Traditional Techniques.
1) Cut down in Advertising and promotion cost.
2) Don’t launch new products.
3) Cut down sales staff
4) Reduce salary and wages.
5) Don’t expand the geographical territory.
But we dis-agree with this traditional technique of facing Recession. This may reduce your cost but it can’t help you to recover your business from the effects of recession. These methods can’t regain business. Instead of using traditional techniques, manufacturers should go with the Morden techniques which can open new doors of business.
What are those Morden techniques….???
1) To make more noise of Marketing. Because others have cut down their budgets on advertising and promotion. By this you may get chance to heard.
2) Launch a new product with considerable difference in design or with improved quality (the customer is waiting for something new and a break from monotony). And even this is the best time to make new experiments on innovation, design & quality. It has been observed that the manufacturers have stopped production in recession but still paying salary to their employees. So why don’t you try to utilise your time, resourses and manpower for making innovations or designs or quality.
[Note: People have money,they are just holding it. How do you make them spent money?]
3) Ask your sales staff to refocus the market. Because all the markets can’t be equally bad. Few markets or territories may be performing good.
4) Pay for performance, Link income with quantity of sales and quality of sales. Like a salesman will get more incentive who collect money faster, who gets advance payment, who sells with less credit period or who sell higher realization product which creates better brand value.
5) Expand into those geographical segments which can gives you better business or which is giving better business.
6) Bring operational efficiency – optimise the cost. Because profit begins at plant.
7) Cut all capital expenditure like set-up a new plant, buying new machineries, expansion of factory shed. If it is not so urgent then postpone it.
8) Reduce wastage through constant revision. Every small drop of wastage can collectively become a big loss.
9) If possible, buy raw material from closer sources. This can reduce freight and transportation cost. Buy material from the source who can deliver in Just-in-time, why to carry unwanted stock….???
10) Bring down per unit cost by using best quality consumable products. This can reduce your work time per unit, power or energy consumption and wastage of consumable itself.
11) Activate internal R&D, QC and QA departments, because a small element of changes can give a lot of cost saving for the entire future. Also, concentrate to improve the quality standards because a new and improved quality can allow you to cover more market share against competition.
12) Ask consultants or experts to judge your business because they come with lot of new ideas to save each single unit of wastage, to increase productivity and many things more.
“All these are indirect techniques to help Marketing” to get a better product, or a slightly inexpensive product, or a product that delivered better quality which can enhance Brand reputation.
Few Marketing solutions: –
1) Develop those markets which are closer to your manufacturing units if possible. It can reduce transportation cost.
2) Offer product at attractive price in those markets which are closer to the plant. Customer feel little comfortable and more interested.
3) Don’t stop traveling. Spend more time in the field.
4) Promote your products which are newly designed or which are of improved quality.
5) Communicating with market is the most important activity to be followed in the period of recession. Communicate with the distributers, suppliers, retailers about new idea, new techniques, sharing of good news, etc. Because being in touch with your customers is extremely important.
6) Organise some consumer interactive exercise like in a Mall, Amusement Park, Trade Fair, etc. Here you got a chance to get in touch with your end-users. You get an opportunity to take reviews and feedbacks from them. Even more, you get an opportunity to introduce your new products with improved quality directly to the end-users.
7) Expand you retail presence. Increase the number of retailers under your business tree.
8) Organise a child contest at Mall or amusement parks. Make them play wonderful games. In this, with the winner child you will get his Mom free…..means a home maker, the actual user of utensils. Offer some exiting prize of utensils sets to the winner child, ultimately the mom is going to use it. Here if you have come up with the improved quality or with the new designs, you can offer such products for the prize to the winner child. This can spread your products’ visibility.
9) Offer perquisites to the performing distributors & dealers, like Holiday Packages during recession. This will enhance your brand image in front of your trade channel and it will also influence other dealers to work more and sale more.
Two Major Lessons to be learned
1) India – A land of Festivals offers so many occasions for purchase perhaps more than anywhere else. A product with a difference in quality and design will obviously catch the eyes of consumers.
2) India – A land of cultures and rituals. Here in weddings, SS utensils are being highly purchased and being gifted. So, on the land of opportunities if you come-up with a product of best quality, different designs and at smart price, you can build a future.
So, would you like to think twice before reacting on recession…??
Would you like to know more about how to extract an opportunity even out of the recession…??
Would you like to avoid from participating in the recession…??
Than Please contact Mr. Femin Patel +91 7211117283, [email protected]