With the economic downturn persisting and companies continuing to tighten their belts, it seems that now would be the worst time to put effort and money into exploring new markets and niches. Quite the contrary, says Joe Calloway, a partner with Engage Consulting Group in Nashville and author of Becoming a Category of One: How Extraordinary Companies Transcend Commodity and Defy Comparison (Wiley; $29.95).
â€śNow is the best time to go after new markets and expand your firmâ€™s market share,â€ť says Calloway. â€śYour competition has hunkered down into survival mode, and is just riding out the economic downturn. That leaves a lot of new customers out there who are open to doing business with new vendors.â€ť
Robert A. Bowser, president at African American hair care products marketer Firstline Manufacturing Corp. in Houston is one entrepreneur who isnâ€™t sitting on the sidelines. This year, for example, Bowserâ€™s 15-employee firm invested both time and money into developing the Dri Sweat line of active wear mesh caps. He says research and development started in 2008, and the products were introduced in early-2009, when many other manufacturers were cutting budgets and laying off employees.
â€śWe saw a need in the African American community that hadnâ€™t been addressed, so we went after it,â€ť said Bowser, who has been in the ethnic hair care industry since 1979. The productâ€™s target audience comprises active men and women who want to maintain their hairstyles. To ensure that the product would appeal to the â€śnewâ€ť price-conscious consumer, Bowser set the product price at an affordable $4 and conducted market research and testing before introducing it to the marketplace.
Bowser says the new product line has exceeded sales expectations. â€śJust because the market is difficult,â€ť he says, â€śdoesnâ€™t mean the opportunities arenâ€™t available.â€ť To companies looking to replicate Bowserâ€™s success in todayâ€™s challenging market, Calloway offers these five tips:
Start laying the groundwork now. Plan today for tomorrowâ€™s economic rebound, says Calloway. By getting in front of new customers now, he adds, youâ€™ll be well positioned as a frontrunner during the economic recovery. Whether youâ€™re introducing a novel product or going after a new market, he adds, now is the time to start planning, testing and acting on your ideas. â€śSome companies Iâ€™m working with right now are dedicating 75 percent of their time to cultivating new customers,â€ť Calloway says.