business ont doing well

Discussion in 'Growing and Managing a Business' started by dipakRgandhi, Aug 10, 2010.

  1. dipakRgandhi

    dipakRgandhi
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    I own a tyre retreading business in small town in India. Customers here have a tendency to give their tyre retreading orders to my compititiors placed at bigger towns. In my town i do not have any compitior.I provide the same quality as my compititors or little better i would say.I charge lessr rates also.some of the compititiors are established much before me.Some have started about the same time I started my business.My business place is so small that I need most of the customers those exis here to do the reasonable business.My take is that the customers are irrational and think that they will get better quality work in bigger town,which is not correct. But, I am loosing my time in all this.I have waited for 5 years but I am not breaking even. If i think of shifting my setup to some bigger place I do not have monay to purchase land there.If I think of selling off this setup it will hardly fetch more than scrap value,even though machinery is in best condition.customers at other bigger places have tendency to give their orders locally.And that is reasonable also.Because there is not great difference in price at two places.
    What do I do in this situation ? shall I wait further ?Can tyre retreading machinery be used for some other business ? To my best of knowledge it can not be.Please advise.
     
  2. BizDoc

    BizDoc
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    Reeducation: one of the most difficult marketing tasks

    You write that your customers are irrational. Buying behavior is based on emotions. Your only hope to alter behavior is to find or manufacture an emotional hook that your customers want more than their habits - in this case, going to the other town.

    You need to differentiate: find out or ferret out exactly what your customers want and find a better way to deliver it. Unfortunately as my title above indicates, reeducation sales are the longest and most difficult cycles. So you have to ascertain whether it's worth it. You can succeed but it may not be worth it.

    You can read more about this at Easy Marketing. Hope this helps!
     
  3. dipakRgandhi

    dipakRgandhi
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    yes, reeducation difficult

     
  4. Fergal

    Fergal
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    Welcome to Business Advice Forum dipakRgandhi, thanks for joining and sorry I didn't see your question until now. You could try asking some local people why they travel outside of your town to get their tyres done? They may well give you interesting feedback and alert you to issues you were not aware of.

    Have you been to some of these premises in other towns? If not, have a look at them and try to pin point anything they might be offering that you're not. Perception is reality, perhaps your customers perceive your operation as being unprofessional. If they do you need to address that. Does your premises appear clean, modern and professional? If not, what can you do, to make it so?

    Are there any other businesses in your town, that your potential customers use? Perhaps you could partner with some of them, say on some joint promotion or advertising, to the benefit of both your businesses.

    Please post back with your thoughts and we will give you further suggestions.
     
  5. nbeam

    nbeam
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    BizDoc has the right idea. Our company has a saying, "You CANNOT compete with Walmart - So Don't try"

    You most likely can't compete with some of the places in the bigger cities on price. However, your customers aren't just buying a product, they are buying a service and they are buying a solution to a problem. I will echo other posters and say that you need to find out what it is they WANT and give them that.

    We work with a small tire shop here in the US. One of their BIG differentiations is that they provide free pick-up and delivery of your vehicle from anywhere within like a 40 mile radius. Talk about convenience. This sets them apart from all of the bigger chains in the area and their customers don't mind paying a bit of a higher price.

    check out this article here: Creating Your Uniqueness in the Marketplace

    You might also want to consider offering a product guarantee of some sort. You may already offer a guarantee but your customers don't have a clue. Make a big poster and put it on your front window or behind our service desk. If they really think they are getting a better job done at another place, let them know that you stand by your work.

    Just my 2 Cents, I hope this helps :)
     
  6. Kay

    Kay
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    I think that's a great suggestion!

    I apologize too for missing this, dipakRgandhi. Welcome. :) You didn't mention in your post about what you've tried to do to attract business.

    Do you advertise locally much or have a website online? Do you have your business listed in local business directories? Could you for example put an ad in the local paper offering a discount or some incentive for customers to come in?

    Do people know your rates are lower? You may think they do but they may not. It's something you should be making very clear in any advertising you do.

    Do you have a large sign outside your business or on an exterior road-facing wall so you can be easily found? Would customers drive past and not know you're there? I once worked for a company where new customers always had trouble finding us because we didn't have an obvious sign outside the building, just an engraving on the door of the main entrance. Look at your premises with fresh eyes and ask yourself if there's anything that would stop a customer from locating your business easily.

    What about companies in your area that have fleets of vehicles, like delivery companies for example? Have you been in touch with them? I'm sure their costs for replacing tires will be high and retreading could well be a more cost effective option, especially if they can have it done locally and get their vans back on the road faster.

    That's about all I can think of right now. Keep us posted on how it's all going please. :)
     
  7. WebWizard

    WebWizard
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    Welcome to the board!

    Advertising local and sponsorships is a big help. Also when you enter the web market make sure your SEO are atleast completed to the basic/standards so you'll get at the minimumn some elementary responses from your target audience.
     
  8. dipakRgandhi

    dipakRgandhi
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    I tried to apply kotler

    Thanks Fergal,nbeam,kay

    As for cleanlyness in my factory is concerned it is generally clean.Cleaner than compititiors.I have a big open land of 15000 sq.feet attached to my factory.No compititior has this much land.And all this is road attached.This is road is high traffic road in my town.It is also a state highway.Customers from villages nearby also have to use this road to go to bigger town.And they pass off from right in front of my factoty.

    Internal setup in factory is also well compartmentalised .On this score most of my compititors have messy and congested setup as they do not have as much as half of the land I have.And my factory area is not a industrial area.Adjoining me are all green fields.One imu farm has started beside my factory.People come to see that farm also.What I mean to say is my factory is very nice location.Big open space for customers to sit and chat while their order is being executed.There are lot of trees.Picnic like environment,I would say. Compare this with my compititors site.They are in industrial area.No greenary around.It takes around 12 hours to execute the order.Customers would hardly like to sit there for that much time and go else where till their tyres are done with.Now this has nothing to do with quality of product offering.I do agree.But i have read something like Experience Marketing in Kotlers book.Apart from the product Customers also get hooked to the overall experience they get.Now ,am I not offering better experience than my compititiors ?

    And as for quality I have mentioned earlier that if at all compared ,they are little supirior than others in durability.I use only 'national brand' rubber.While others use both the cheap brand and national brand.And sometimes they charge more for cheap brand than what I charge for quality rubber.I have my two brothers at two bigger towns nearby.And so I know how business is run there.My both brothers are doing excellent there.Of course,we brothers do not compit with each other,but there are others.I am already working on lower profit margins.
    And for compititors being of walmart size:No they are not. They are equal to me.Only thing is that they are placed at better places and doing better business without any innovative marketing of theirs.They do not offer any value added services.They do not offer van delivery service also.Now some would say I can differentiate here.I can offer van service to customers in nearby areas.I have already mentioned that this is a small town.There are no corporate type customers here.Most are generally illiterate and irrational.If we give delivery at their places,they will take the delivery .But it is not sure they will make full payment.They will point out some non existing complaints.That may be the reason nobody offers van service.
    As for marketing campaign:Many times it has been my experience with such customers that you campaign to them and they become suspicious of you ,and go to your customers.Only customers words of mouth can work.But having very small number of customers that option alone is not wothwhile.And for ad.in local news papers:that channel does not work in our business here.customers generally decide on words of mouth or they will go habutually to their usual place.That is why no body does advertise in newspapers.

    As for partnership for mutual products,I have not come across any idea yet.i do not have a negative attitude.But I am not sure how it will work at this small place when there are bigger markets just 15 kms. away.

    Yes,one important thing.At these bigger market places all the associated metamarkets are existing for tyre line .For example, there are servicing garages for tractors and trucks,spare parts suppliers for complete range.And big aggricultural produce market.So farmers take their produce to these markets in hired tractor trolleys,trucks etc. And these transporters get commissions from brokers in market for bringing these farmers.Also,there is big industries at these places.And this gives them transportation business.

    And these factors also attract customers there

    As for me, I find only one thing that i should do.My building needs urgent painting.It has lost all its colour.And lot of weed grows in my open land.And it does not look impressive.I need to control it.

    Rest , i do not have a clue.
     
  9. Kay

    Kay
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    Wow, you really are up against it there, dipakRgandhi. So many things that we'd do in the West are different from your culture. That makes it hard for us to apply our knowledge to your situation. I'm not giving up though! I just think we need more input from more Indian members on this. :)

    Where you are sounds lovely. I'm wondering if you'd thought about leasing some of the space to vendors. As you say, 12 hours is a long time to wait around when you have nothing to do. If you had your own mini farmers market on the property or something that could help occupy their time, that might help. Even just a small food stall where they could get something to eat and drink. If you kept the vendors rates low enough, you could attract a decent little group and you'd also have the additional income from that.

    That's all that strikes me right away. I'll be back. :D And I think tidying up the property is a very good idea. People go by first impressions. If your land and premises don't look tended to on the outside, they won't bother stepping inside because they'll wonder if you'll treat the job in the same way.
     
  10. Mountain Man

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    I agree wit Kay. It is hard for us to understand that customers do not always buy for the same reasons as we may think. I have heard that people don't buy products they buy an experience, perhaps that is a bit harsh but not always untrue. I like the idea of a food market (not sure of your culture, do you have Hot dog stands?)
    Also a good clean up outside may help since people see a relationship where none exists. Like the saying "because the stewardess forgot to put sugar in my tea means the mechanic may have forgot to check the engine on the plane."
     
  11. Fergal

    Fergal
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    dipakRgandhi I'd agree with the previous comments regarding the condition of your premises. You say that it needs painting and that there are a lot of weeds growing. A coat of paint and removing those weeds will make your premises look much more appealing and inviting to potential customers. If your business looks shoddy and unkempt people will be less inclined to use your services.

    You could try offering free vouchers to people in your local area, in an effort to get them to try your service. For example, give them a voucher that entitles them to a certain discount. this will help to get you some new customers and if you provide them with a good service they will tell their friends about you.
     

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