The case studies described below are businesses that contracted Joint Venture Marketing, not Madilach Investments. All names have been changed for client confidentiality.
retailer facing stiff competition.
Jack was facing serious competition from supermarkets taking his market share, through cheaper offerings and convenience (one of the previously key attributes of smaller retailers!) He has a superior product range and niche point of difference with a solid client base regularly purchasing from his shop. Up until our engagement, a fair amount of marketing spend was on mass advertising - yellow pages, local newspapers, etc - with no real success. Most of his growth had been achieved organically, through word of mouth.
What we did:
After a review of promotional spend, we reallocated budget to use as promotions for existing (and later new) clients. After conducting a qualitative survey of clients and establishing the client database (and based upon the analysis of the research) we thanked everyone for participating and created a "draw" rewarding one lucky client with a trip for two to the Gold Coast for a week. A loyalty program was launched with the opportunity to win another trip in a few months for every completed card. The rewarding loyalty strategy was instrumental in countering stiff competition from larger retailers with economies of scale (also indicated through the survey, as 67% of the respondents stated they also purchased elsewhere.)
With no increase in marketing spend, Jack now has increased the average sale value over 50% (through the loyalty program), leveraged the loyalty of existing customers and created huge word of mouth in the community through providing the trips to the Gold Coast every six months. Sales revenue is up 26% from last year and quarterly promotions to the database have also encouraged increased sales through new products and added value promotions.
manufacturer looking to penetrate new markets.
Hans and his family had had the business for two years and had been struggling to get a foot in any market. They were conducting all of the distribution themselves and delivering much of the raw materials themselves to their plant (to save on costs.) They had one key account that provided more than 85% of their sales revenue as a volume account, but with extremely low margins (and the third director of the business was also a director of the key account company). The products were of a premium standard, but weren't reflective of that through neither price nor packaging (and thus position in the marketplace.)
What we did:
Immediately a complete re-positioning program was initiated - changing the presentation of the packaging and marketing materials. Prices were adjusted to reflect the products quality level and to target specific market segments (some instantly increased the product profitability by over 40%). A business action plan was created to provide clear direction, actions, strategy and objectives. A new, targeted sales process and call cycle was developed for each market segment and alliances were formed with other similar businesses to assist in cross selling products.
Further branding was applied to vehicles and a company brochure developed to assist in increasing brand awareness. (With more to come)
After 12 months over 110 new commercial accounts were opened, monthly sales revenue increased over 260% (and growing), the key account (aforementioned) is now only 16% of total sales revenue (and the director's shares have been bought back and the director has resigned). The business has now moved, as it has out grown its' previous facilities (within 12 months) and has attracted significant media interest (through increased awareness in their industry) and new distribution channels have been developed. New packaging has been developed to take the products nationwide and exporting opportunities are in the plans within 18 months.
motel looking to sell and wanting the best price.
Joe and Jane had a small motel on a main traffic route and were looking to exit the business (to move onto bigger and better things) in a short time frame through a sale of the going concern and obviously wishing to maximise the vendor price. The business had limited capacity and was "doing reasonably well" (having grown 29% from the previous years sales), but at that time occupancy was declining (and not from a seasonal variation).
What we did:
Firstly, clarified exactly where the guests were coming from (marketing channel effectiveness), to establish a marketing budget and plan to drive awareness and enquiries. We established (surprisingly to Joe and Jane) that over 55% of new enquiries were from the spontaneous "drive by" traffic. A new promotional program on the external signage (with a view to upgrade the sign out of the increased sales from the promotions) was initiated.
Sales training and review of the sales process (and also clarification of purchasing motivations) was undertaken to identify areas to up and cross sell. A clear daily sales target was established and also a variable room sales price dependent upon capacity availability to maximise profitability per room. New features were added to the offering that were unique in their location to create a competitive advantage - and obviously they were promoted on external signage. A customer care program was also undertaken for the corporate accounts and loyal clients to maximise client retention and enhance referrals through positive word of mouth.
Occupancy averaged 90% + for the last quarter, a proprietary policies and procedures manual had been developed and all staff completely trained - the business could be "run under management (highly desirable for a prospect purchasing a business) and most importantly (particularly for the sale of the business) net profit had increased 19% within 10 months.
The business has now successfully been sold, and Joe and Jane are now onto bigger and better things.
food manufacturer losing money
Charles had a food manufacturing business supplying directly to retailers, and he had one retail store of his own. He was struggling to make it work - understaffed, lack of time to manage the business effectively, new accounts were few and far between, sales were growing slowly and profits small (after owning the business for 4 years).
What we did:
After reviewing the sales and profits of the retail store, we quickly established it was dragging the manufacturing business down significantly (the financial figures hadn't been reported separately for each revenue producing aspect of the business.) Another key factor to sell the retail store, was there was the lack of skilled management capability of this aspect of the company.
After selling the retail store and reducing sales revenue, profits increased, and a new role was created - business development manager (also with a view to being groomed for the General Manager's role later). After developing the tactical marketing plan and budget, we recreated the marketing materials, website developed, revised the sales strategy (and target markets) and latterly with an identity re-brand, new packaging for distribution through supermarkets.
Two years on, sales have increased to $700,000 + (with the majority of profits have been reinvested in plant and equipment.) The business has just signed a major distribution contract through out New Zealand. This will double the sales figure again, with the other major supermarket chain now also requesting samples.
Now we're managing the growth, and establishing diversification though other channels. Further diversification also through horizontal product development (a cross selling strategy where the business won't manufacture the product itself). This is through preliminary customer feedback from exhibiting at targeted trade expos. Finally, exporting within two years.