In the first part of this article we address the development of the modern channel in the architectural painting market, determined by the growing participation of specialist chains, buying groups and the traditional channel of stores where painting is their main business.
By Venmark*
We have and are collaborating with companies in the market looking for ways to optimize business results. One of the conclusions we see is that there is no formula, a strategy that adapts in the same way to different companies.
There are many factors that must be considered, but we can propose some of the ways that we see possible to analyze and evaluate for each situation:
- Own stores: it must be the first objective that many of the companies with which we talk transmit to us. Although aspiring to integrate the operation is undoubtedly a desirable objective, we must highlight some aspects to evaluate:
a.) Degree of current development of the company/brand. Launching your own stores can mean competing with current customers and putting current results at risk, how much am I willing to lose to launch my stores? How much do I really earn?
b.) knowledge of the commercial operation of the stores, the Know How of the retail. Having a good brand and store design is not a guarantee of good results, how much do we know about the commercial operation? Will we be able to handle the timing aspects so different from the usual operation?
Are we ready to manage an HR company? A retail is successful if it is efficient in the operation, in the immediacy of the times and in managing people.
c.) Do I have the right team to launch the project?
- Franchises / associated customers: this is an alternative for companies that aspire to have their own premises, but for some reasons do not carry it out and look for alternatives.
This alternative leaves the retail operation in the hands of specialists and the company provides the necessary commercial and marketing support for stores to differentiate themselves and become profitable and lasting businesses over time.
This development scheme has key aspects that can determine the success or failure of it; Among them the formal agreement to which the parties are committed, the profile of the franchisee (a current converted client, who knows the management of the store or an investor) and finally with the real degree of commitment of the company for this channel.
In many cases we saw the lack of budget or crosses of interests. What do we prioritize? This leads to problems in the development of this channel.
- Traditional scheme: in this scheme, companies seek to continue investing in the channel through traditional strategies such as exhibition elements, training, purchasing agreements, etc.
In this case, we understand that companies that do this job well manage to maintain their sale and image, but they must be aware that they are within a business that tends to reduce their market share and is the most subject to the offer of manufacturing companies that want to enter these stores in any way.
- Digital channel: although its growth is much more important than the rest of the other channels, the sales volume is still much lower. So far, the competing companies are mostly merchants or manufacturers that do not have a strong presence in the markets.
The first action, as a manufacturing company, is to take care of our brands and avoid actions that are carried out that may damage their image.
As a development strategy, we see the importance of having an official presence, but taking care not to compete with our own customers, providing them with as much information as possible to differentiate our products and services.
- Mix of strategies: as we mentioned, there is no single formula, and always the best strategy will be the one that obtains the best results. When we talk about strategy mix we talk about pragmatism, being flexible and realistic; to consider general objectives when launching the action plan that can be achieved through differential strategies as appropriate by area, brand, client, etc.
What do we think?
We believe it is necessary to understand, to know, how the development of the channel was taking place and to intuit where it is going.
The beginning and the strong growth of the digital age is not going to stop, but on the other hand we are not yet sure what percentage of the sale will end up meaning the online channel.
If there is no doubt about what communication, operations and marketing actions should be a priority, regarding sales we have to see how to have a presence, but still taking care of ourselves.
The atomization of the sale of paint through the network is causing difficulties for companies to take care of their brands; for merchants, because of the fall in profitability.
We understand that there is no ideal strategy to grow in the market; Everything depends on the starting situation of each one, the weight of their brand, the budget that is counted to develop a new business.
If we see that we cannot stop carrying out actions, we cannot stop growing, trying different things, constantly seeking the differentiation of our products. To stop doing so means to decrease.
*Venmark has more than 20 years advising companies in business development. Within the paint market they have developed strategic plans, repositioning and creation of brands, development of commercial channels, own stores, loyalty and repositioning programs, management, sales force productivity, franchises, among others. Among its clients in the paint market are among others: Sinteplast/Colorshop, Prestigio, Universo (Arg.), Industrias Vencedor/Red Color, Qroma/Color Centro (Peru)
