Business Strategy: Volume or Value

Revising prices, improving supply chain or P&L, launching new products or new media campaigns.. all these various activities are instruments to bring to life your business strategy. And eventually your business strategy ends up in focusing on either of these two objectives:

-?????????To drive Volume which means to create as many as possible purchase opportunities & consumption occasions.

-?????????To leverage Value – here you focus on obtaining us much profit as possible from the given amount of goods or customers.

How do you decide whether to go for Volume or for Value?

You need the Volume strategy in a Growth market, when you

-?????????Launch a new Product or Enter a new Market:

In this situation Volume strategy means to start building customers base.

Therefore you need to create awareness about your brand and trigger desire to try your product. Your best marketing tools here are: Massive media support, Small pack sizes and Trial offers.

-?????????Grow your Leadership positions and Fight Competition:

When the competition is fierce or when you want to increase you piece of pie, you need to convert competition customers into your fan base. Here you start with creating Trial opportunities: various promotions and effective communication are your key marketing tools. Next step of your Volume strategy will be do drive repeat purchase – through promotions, loyalty programs and, of course, through your great product.

Value strategy is required for products & markets with limited opportunities for the business growth, e.g. when the market is in decline or stable with no new customers coming in. If you have a solid base of loyal customers, then you need to maintain your customers base and to leverage earnings per customer. Your best marketing tools: Loyalty programs, Customized targeting (media, product offer etc). Brand positioning and Customer relationship are at the core of the Value strategy. Customers loyalty also enables Premiumisation & uppricing as a part of Value strategy.

If for some reasons you plan to delist your product from the market (for example, when the product is niche and its production is becoming more and more expensive, or when you need shelf space for other products), then you come to a situation when you just need to sell what you have at the best profitability possible. ?It’s a mix of Value & Volume strategy: You need to maximize your earnings per customer and at the same time to drive volume purchases. Your key marketing tool is Promotion: Deep discounts, Bundling, Volume offers etc.

So, What is Your Strategy?

At MarQt iQ we have been helping Businesses to find right marketing tools for successful business strategy. Talk to us!

www.marqtiq.com

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