identify two ways the business could react to falling sales of chocolate bars?
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Answer:
Explanation:
8 Low Cost Strategies you can use
Have you ever seen an air combat film where a stricken aircraft, trailing flames, spirals in ever increasing circles until it crashes into the ground and explodes? The end of the aircraft, and sometimes the pilot.
Sometimes small businesses reaction to falling sales is much the same, spiralling downwards with increasingly desperate measures, trailing red ink until they also end in a wreck.
How do you react to falling sales? Do you cut expenses and particularly marketing expenses? After all you can't afford them if the money is not coming in.
That is what one client did. And what do you think happened? It doesn't take much to guess that sales fell of course. The start of the spiral.
So what do you think his next step was? Why, to cut prices to stimulate sales. And what happened? Of course profitability fell. If you cut prices without reducing the Cost of Sales (and marketing expenses are not part of cost of sales) then unless you get a significant increase in sales (unlikely) then of course profits will fall.
Another approach is to cut some of the product or service being offered, the value package. That will reduce the Cost of Sales and retain the margin. But what if the customers no longer see value in the offering and go elsewhere, a distinct possibility?
It's all a downward spiral, one that needs to be corrected before all control is lost.
The real solution is not to keep cutting expenses, prices, or the value package. It is to stimulate sales through better, more effective and more targeted marketing, and preferably marketing that doesn't cost you a lot of money in the circumstances.
Which leads me to the question, what marketing steps can you take that needn't cost a lot of money?
The advantage small businesses have over larger ones is the ability to interface with customers on a more personal, one-on-one level. By being personable. A competitive advantage.
Turning your customers into word-of-mouth promoters of your business is one of the best ways to help spread the word about your small business. Create a WOW factor that makes you memorable, and worth talking about. Like the sunset harbour cruise that presented each lady with an orchid as they landed. What do you think they talk about afterwards? Small cost, big result.
Your customers become your PR machine. Give them a reason to promote your business and brag about their association with it.
You might not yet be into social media such as Facebook but it is one of the easiest ways a small business can market itself. Word of mouth is an inherently personal experience - online just makes it that much easier for a message to go that much further. Get your customers to comment on your products or services, and add photographs of your customers participating or using them. That will bring them looking and inviting their friends to look. Getting your name out there on a budget has never been easier.
Now here's a thought, not mine, I found it online from "Keith" on a forum: work with your local college/university that have multimedia courses and offer a prize for the best viral ad etc. Some universities are crying out for real-world examples for their students to cut their teeth on and you might discover a really talented individual.
If you have a website, and I strongly recommend you do, and your market is local, make sure your location is in your meta tags and keywords. So if they type, for example, "fitness in Yamba" into Google your name will come up on the first page.
Put out a Press Release to your local newspapers. Local newspapers need content, stories to tell. Build relationships with their journos, buy them a coffee, shout them a beer, ask for their advice. If they know you your press release has a much better chance of being used, and having a story added.
Create an alliance with other businesses who service the same market as you. For all sales over a certain value they get a discount voucher for that business for cross referrals. Do joint promotions, for example the local nursery, hardware store and a landscaper will have common customers with common needs and wants.
Loyalty cards - the coffee shop beneath my old office offered loyalty cards with a free coffee for every X coffees. Or you could offer a discount for all purchases over a certain value.
Develop a referral program, with a reward (free gift, discount?) for referring 3-5 customers. And I mean customers, not enquirers.
Run a competition with a valuable prize, making sure you promote it on your website and Facebook page, as well as local news media. Even better if it is a zany competition. That will create more buzz.