Friday, November 16, 2018

Finding the Giant within Your Small Business

Post written by

Phuong Tran

Phương Uyên Trần is the Deputy CEO of Tan Hiep Phat (THP) group, a speaker, and the author of Competing with Giants

If you were to match up a multinational company that offered generic options with a successful regional brand that focused on localized offerings, who do you think would be more successful?

I’d argue the regional business would, and here’s why: authentic, local products are very hard to beat.  Local or regional companies are more likely to be closely aligned with their communities and consumers. As a result of this connection, these companies are able to adhere to the foundational marketing principle of the Four Ps – product, price, promotion, and place.

This isn’t to say that multinationals don’t try to tailor their offerings and messages to each region they serve, but it is more difficult due to the nature of what they represent as a global company. When it comes to understanding the “place” component of the Four Ps, no company is in a better position than a local one.

Here are five reasons why locally-focused businesses have an advantage against multinationals in the markets they compete:

  • They understand their customers. Due to the nature of where they exist and provide products/services, local businesses have advantages over multinationals in leveraging customer insight. They are far more likely to interpret the research correctly because they are closer to it themselves.
  • Consumers build a personal relationship. Local companies are often family businesses, and their founders are well-known local figures. From sponsorships for regional events or causes to the physical presences of stores, people are aware of these owners and those who represent the company. Even a multinational marketing budget cannot replicate these sincere relationships. These relationships must be earned.
  • R&D opportunities aren’t as risky. Local companies also benefit from a more favorable risk/reward ratio when they launch new products, the lifeblood of any company. Local companies can act quickly; they can easily remove products that are not working even if preliminary customer research had suggested they would. This minimizes losses and enables local companies to keep innovating while still delivering the products consumers want.
  • Delivery of product is more direct and straight from the source. Local companies can get products to market much faster than multinationals because they are less bureaucratic and far more entrepreneurial. Also, it is becoming increasingly popular among consumers to be more aware of where their products are created and sourced.
  • They are committed to a market. Local companies typically only target their home market and can fully serve its needs. Multinationals, on the other hand, rarely launch a product in one market alone; they make compromises to try to appeal across many.

Multinationals are powerful in many ways. However, when providing products that are authentic and tailored to locals, few multinationals can compete with the power of a local company. Learn more about how my family’s business has successfully provided authentic products on a national scale while competing with giants like Coca-Cola by visiting phuonguyentran.com.

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