Are you a marketing generalist or a specialist?
Does your China business specialize, or are you a generalist?
The answer to that shouldn’t be a story or a long, vague discussion. If there is a difference between your target market and your actual buyers, then you have a problem on your hands. During boom markets the specialist-generalist dichotomy doesn’t matter a great deal. When markets are growing, many businesses find themselves with more clients than they can handle, so the idea of market segments and targeting seems academic and unimportant.
But now your situation has changed. Suddenly, you have lots of inventory (or in the case of service providers, idle staff) and few buyers. Making sales is no longer as simple as answering the phone when it rings. Now you need to actively convince clients and customers that A) they need some product or service, and B) you are the best choice.
This is a great time to figure out if you should be a specialist or a generalist.
Marketing in Times of Shortage vs. Surplus
If you have goods for sale during times of shortage, then you are in a very powerful position. You can do business with whomever you want to, and you have latitude to set prices (to some degree).
Marketing during times of surplus and oversupply, on the other hand, puts in a weaker position. Often called a Buyer’s Market, there are more sellers than the market needs to maintain a stable, ‘equilibrium’ price, and sellers have to drop prices or raise service in order to clear their inventory.
We can think of recessionary markets as one big surplus. The number of shops and businesses remains the same (or drops over time) — but the number of MOTIVATED buyers plummets. This is particularly true in China, where locals have a strong tradition of saving and are less disposed towards credit.
This is exactly the point where many expat business owners realize that they don’t have a clear picture of who their market really is. I know of one business that has been doing well selling expensive, sophisticated financial services in Shanghai. Who are their clients? They have no idea. I asked them once – the owners told me that they would sell to anyone who has money. Well, during a raging boom that is one really cute answer. But now they are scrambling around desperate to come up with a strategy that will keep their doors open through Chinese New Year. After that, they are simply flying blind.
If you are just now coming to grips with the idea that you have no idea who your clients are or what they want – and yes, this may mean you or someone you work for – then a good place to start your investigation is to determine if you are a specialist or a generalist.
Specialists are very good at a few things
You can specialize in a client type or a product/service type. Specialists have answers and solutions. You are expected to know more about one aspect of your client’s business or challenges than he does. You may sell a product – but specialists always offer value-added knowledge and information as well. If you change, expand or redefine your specialty each time a new prospect appears, then you are NOT really specializing.
In boom-times, specialist can charge more. In recessionary markets, specialists will attract more buyers – though they will still feel pressure to cut prices.
Generalists add value by being all things to all people.
Think of generalists as shopping centers or department stores. They offer a wide range of goods and/or services, and their main value-added is convenience and variety. If you tout yourself as a “one stop shop” or the place to solve a wide range of problems then you are a generalist. Generalists can be very successful, but only if they understand their real value to the customer. Convenience, low price, and high service. Generalists often use a loss-leader approach, where they attract customers with one high-value, low-price product, but then sell the client more goods or services.
What about Service?
Both specialists and generalists need to offer service, but they are different.
Specialists need to be expert in some aspect of their client’s business. They are the doctors of the business world. Specialists fix problems, offer alternatives, provide solutions and are a resource for the client’s business or life. Specialists who can actually solve problems have a great deal of leverage with prospective buyers, and their advice is an important competitive advantage. Beware of building a “specialty” business around one or two anonymous experts but staffed by low-paid clerks and salesmen who don’t have sufficient experience or knowledge to provide value.
Generalists have to be good at process-oriented service. Deep inventory, wide variety, new products, sufficient staff, convenience, ease of transaction and acceptable after-sales service. If you think of yourself as a generalist but hear your staff saying things like, “we don’t have that here, we don’t do that, you’ll have to talk to the manager and I don’t know when he’ll be back, etc”, then you are dropping the ball. Generalists are about convenience. Once a customer has to go somewhere else to solve a problem then you may never see them again.
Deciding if you are a specialist or a generalist is a great first step towards overhauling your business model and creating a more competitive business.