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Why

Product Marketing Strategy helps manufacturers with product marketing, product strategy, and marketing strategy to maximize profitability over the product life cycle.

The Market Basket Strategy

Market Basket StrategyThe Market Basket Strategy is an approach employed by large vendors with multiple product lines serving a single department. It is insidious in that it makes entry very difficult for small companies and new entries into the market. In my opinion it can also be a poor choice for the buyer as the various items in the multiple lines may not be as good as the competitive product from the single source.

The reason buyers tend to like this approach is that it reduces their workload. It means fewer vendors to see. It means fewer negotiations and time spent sourcing items. It can mean less time updating computer records. It can also mean bigger rebates from vendors and larger advertising allowances. These mega vendors tend to spend more time and effort promoting the corporate brand than they do the individual product lines that they carry. Consequently there have been a lot of great brand names that have fallen victim to the corporate identity. Stanley has purchased many great single line companies and included a portion of their offering as Stanley products relegating the recognized brand of an individual product to the scrap heap of history. The same can be said for Cooper Industries and Irwin. Plumb hammers and Crescent adjustable wrenches were great brands acquired by Cooper Industries that are all but invisible today. Vice Grip was an incredible brand that is slowly fading in the Irwin product offering.

Therein lies the hope for the single line supplier. To survive and prosper against the Market Basket or single source strategy, the best option is to build great brand awareness. If the product can be made so visible as to warrant name brand purchasing power, then the Market Basket strategy can be overcome.

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    head-and-sholders  Robert Cannon

       With over 30 years of expertise in marketing, and leadership, Bob creates innovative systems, 
       products and services for small to mid-size manufacturers. Contact Bob today for more information 
       on the Cannon Advantage services and solutions.