A Current Product Range Is Falling Short Of Its Sales Targets

I knew an independent consultant who was looking to get into the swing of consulting and solving business problems that he enjoyed, but had no experience. He had a small website on which he had a platform to fish for work and a way to collect and gather data to build solutions to some of the business problems he may encounter. Although not his main job, he knew he had the skills and qualifications to do the job. One such job may be to consult and solve problems for a national business. A national business is defined as a business that operates across a single country, with its operations located throughout the nation but not crossing its borders into other countries. 

A national business may export goods to other countries, but it typically has a broader market access and a good understanding of the local culture, tastes and customs. The broader market may be an indication that a broad differentiation strategy can be implemented in a national business, depending on the interruption, where a business approach involves creating unique products or services that appeal to a large, diverse customer base across an entire industry. The advantages of a broad differentiation strategy are that it helps to set the business apart from its competitors. 

Advantages of a broad differentiation strategy 

A broad differentiation strategy helps to set the business apart from its competitors. The Independent consulting thought that if he could demonstrate to businesses the advantages of the potential solutions to the business problems, he would be in a unique position to capitalise on customer needs. 

The advantages of a broad differentiation strategy would increase customer loyalty. Although not guaranteed, customer loyalty can be difficult to earn, especially as customers have more choices and because of their changing consumer expectations. These factors suggest that customer satisfaction is not loyalty, whereby a customer may be satisfied with a product at a specific moment, but that does not guarantee they will remain loyal in the long term. 2. Another advantage of a broad differentiation strategy is higher profit margins. This can be achieved from the perceived uniqueness of the product or service, which enables the company to charge premium prices, which may lead to wider profit margins. When the company’s products or services are perceived as unique, the business is less vulnerable to direct price competition with rivals; therefore, the advantage is reducing price competition. 

Disadvantages of a broad differentiation strategy 

Managers of national businesses need to be aware of the risks and disadvantages of the broad differentiation strategy for their business. One such disadvantage is the high costs that could be involved for innovation, development and customisation. There is a risk of competitors imitating unique features and potential customer rejection of premium prices or perceived unimportant features. 

1. The strategy requires significant research and development to remain competitive and stay ahead of the curve. Research and development is a key component that creates unique value for consumers of the business's products or services.

R&D is what allows a company to develop distinctive features, superior quality or novel technology that competitors cannot easily copy. Apple is a classic example of a company that uses heavy R&D investment to drive a broad differentiation strategy. The company constantly releases new and updated products and features, compelling consumers to pay a premium. From this example, it may be safe to assume the broad differentiation strategy works well in international businesses as well as nationally. 

2. Another disadvantage of the broad differentiation

 The strategy is that consumer preferences can change rapidly, and if the company cannot adapt its differentiation efforts may become irrelevant.

It can be argued that changing consumer spending habits can be identified by researching markets to identify changing preferences. It would be safe to argue that R&D in the broad differentiation strategy, which the company is going to use to gain market share, reduces some of the risk of consumer preferences because the company is offering unique products. For example, Tesla, the electric vehicle manufacturer, entered the automotive market with a highly differentiated, high-tech product. It’s use of R&D for battery technology, software updates, and self-driving capabilities, which has created a perception of innovation that commands premium pricing. Another example where this risk can be reduced is from R&D investment

Possible root causes for falling sales

Falling sales can be a challenge for any business and can stem from internal inefficiencies or external factors in the market, such as shifts in consumer spending habits. Common root causes of a product range falling short of its sales targets could include internal factors, such as weak customer engagement and changes in the market. Other factors that contribute to falling sales include:

1. Business scaling up to soon borrowing more to scale causes bad debt and increases cost, reducing the amount available for R&D, as interests have to be paid on debt
2. Pricing: manufacturing cost or the cost of material increases, supplies have increased prices, causing the price of the product to increase, and the customer perceives the product as less valuable.
3. Restructuring a business increases cost as the business hires …

 1. Inefficient sales processes, a lack of a clear structure, and an approach that sales teams are failing, and missed opportunities to convert leads. An overcomplicated sales process can deter potential customers. 

2. Poor customer experience, negative experience with customer service can drive customers away. For example, Comcast is an American multinational media conglomerate that owns brands like NBC Universal and Sky. They also provide broadband internet, cable TV and mobile services. An incident with a customer saw him charged a premium fee for a service he didn't use, yet Comcast failed to provide a solution. 

The customer was passed around between representatives and departments with no one really taking ownership of the issue. The customer shared his poor experience on social media, which went viral, highlighting Comcast's poor customer service and negatively impacting the business, resulting in loss of business, contributing to poor sales.

External factors

External factors can contribute to a product falling short of its sales targets. Marketing changes, for instance, shifts in consumer spending behaviour, economic downturns or new competitors entering the market, can harm sales. Technological advancements can disrupt existing industries and markets, leaving companies that fail to adapt behind. Kodak is a classic example of a business that failed to adapt to technological advancements. Kodak dominated the film photography industry for most of the 20th century. Kodak was a household name in photography, holding a dominant market share in film and cameras. Kodak once held a 90% share of the U.S. photographic film market and 85% of the global market.

Kodak filed for bankruptcy in 2012 after years of declining sales and failed attempts to reinvent itself 

As well as global reach, Kodak had brand power; they were so synonymous that Kodak moment became a cultural phrase. The Kodak moment originally referred to a cherished sentimental event worthy of being captured in a photograph and was popularised by Kodak in their 1970s advertising campaign. Kodak invented the digital camera in 1975, but shelved the innovation, fearing it would cannibalise its lucrative film business. Kodak ignored the digital shift in the 1990s and early 2000s. While competitors like Sony and Canon were quick to embrace this change, Kodak clung to its film-based model.

Key lesson from Kodak's fall and why it matters

Innovation plays a key role in product development value and product sales. It is key to staying competitive and staying ahead of the curve. Adapting Innovation strategies in the workplace means businesses are adaptable to new ideas and trends before they become commonplace. Kodak should have been willing to embrace technological advancements and should have been willing to embrace new ideas as they failed to do in 1975, and disrupt themselves and the Industry further before others did.

Kodak failed to adapt to consumer behaviour before, which had a detrimental effect on product sales and the overall profitability of the business. As customers shifted to digital and later to smartphone technology, Kodak failed to meet customers where they were going.

Soultions

Listen to your customers and learn from their feedback, you can then tailor products and services which meet their specific needs and that they will value and importantly, provide the business with repeat business. 

1. Business scaling up to soon borrowing more to scale causes bad debt and increases cost, reducing the amount available for R&D, as interests have to be paid on debt
2. Pricing: manufacturing cost or the cost of material increases, supplies have increased prices, causing the price of the product to increase, and the customer perceives the product as Less valuable.
3. Restructuring a business increases cost as the business hires …

Falling sales, Net profit is down as it is the total profit generated from sales. A competitor is offering a better product at a better price with incentives to buy. For example, a bank switching service offers an incentive of a payment of money to switch plus a wider range of products13/11/25Problem solvingIf for example, a current product range is falling short of its sales targets, this is a fix-it problem where a short-term solution can be used over the long term. For example, if a manager of a business decided to increase marketing activity to tackle this problem, then this could be considered as a short-term fix-it solution that can be used time and time again over the long term.

Coca-Cola is a great example of a business that has used a short-term marketing strategy to increase sales. The objective of the campaign was to boost sales and engagement, particularly among younger demographics. Their strategy was to replace the Coca-Cola logo with popular names and phrases, encouraging customers to share a drink with family and friends. The strategy deployed personalised bottles and in-store promotions. The marketing strategy achieved its objectives, and sales increased 2% in the US, reversing a decade-long decline. (Can get evidence from research) The campaign generated massive social media engagement with millions sharing photos and stories. The campaign was rolled out in over 80 countries, becoming a global phenomenon.McDonald’s monopoly game is a good example of a short-term marketing strategy with promotions that drive sales and engagement. Customers collect game pieces and win prizes. The strategy creates a sense of urgency, the limited time offers drive action, and encourage sales. 

The McDonald’s strategy rewards loyalty with exclusive offers that drive customer retention and loyalty.

The problem has been defined because, in this case, sales have fallen short of their sales targets. The potential solutions are the way sales ought to be; therefore, sales ought to be increasing instead of decreasing. The potential solutions are going to be solutions that will have a positive impact on sales, effectively increasing them. For example, it may be that to increase sales, the business may need to increase marketing activities.