selling

The problem with unstructured entrepreneurship

Taura Khuluma Say it!!, , , , , , , , , , , , Leave a comment

This is probably more of a problem in Harare more than the other cities but the explosion of on-street vendors in the CBD is interesting and worrying at the same time. Surely there is some money to be made otherwise why would all these people congregate there every day but when we say there is money to be made. How much is enough?

The laws of economics dictate that ultra-competitive markets selling homogenous products have little to no profit for the players of the market. So, by all being in the same place the traders are pushing their own prices before the market even demands low prices. This is a perfect scenario for bargain hunters but not for the traders. What’s the solution?

Here is a radical idea! Instead of 25 vendors all sitting on the same street selling the same things how about we think smart and form cooperatives and use our collective resources to widen the product range, economies of scale to lower prices and sell more and ultimately make more money. By reducing competitiveness from the market the cooperatives will be able to claw back some power in terms of setting prices on the market. Tomatoes can gain 10-15% margin by simply selling from 1 sales point instead of 25 points. But what will the other 24 members of the cooperative do?

Well the cooperative will need to be structured. People will be allocated different roles to match their skill sets. The traders have already show they have skills in sourcing, pricing, market scanning, administration and a host of other skills needed to operate on the streets successfully enough to make a living from it. Some of these skills will not be obviously know to them but they are there they just need sign posting. People will earn consistent wages, partake in profit sharing and benefit from a collective pool of resources to expand the scope of their business.

Once the cooperative is fully functional it can then look into market expansion, taking on more members and developing a retail model that is sustainable and profitable. I foresee green grocers developing from this idea but can we convince the traders to formalize their operations?

What are some of the barriers to selling the cooperative idea?

Single mindedness of Zimbabweans in general
Lack of trust
Short term thinking
Lack of Resources to cover incomes in the short term
Lack of Organizational thinking

But most of these barriers can be easily overcome if there is desire and determination to break new ground.

What should companies use Facebook for?

Taura Khuluma Say it!!, , , , , , , , , , Leave a comment

 

 

 

 

 

 

 

 

 

 

Much of the hype behind the actual value of Facebook was to an extent based on the business potential of the site in terms of it being used as a market platform for companies. But, a big but, the transformation of facebook from being a free service for individual user to a site that companies use to target the free service users has many obstacles to over come, firstly how will customers react to deliberate commercialisation of their social capital? there are lessons to learn from the experiences at myspace and capitalisation of social interaction, it didn’t work too well. The next question is how can companies guarantee that their investment will receive coverage that justifies the expanditure on advertising on facebook? There are already several conspiracy theories regarding coverage, exposure and publicity limitations being imposed, randomly or otherwise, by facebook. So, investment on advertising might only produce a fraction of expected market outcomes afterall.

My reservations against the investment in advertsing on Facebook, as shared by www.larrykwirirai.com, are based on two observations, one of which is that marketers are being opportunistic in trying to convert social interaction into commercial capital. And, the other is that, without complete control if this process, since Facebook will manage all the analytics, there are serious strategic gaps that bring up red flags to observers.

I personally think any company looking to use Facebook as an out and out marketing platform to sell products need to fire their marketing team. Selling and overtly capitalist conduct goes against the whole ethos of social media!. Facebook should be a relationship building platform used to develop brand affinity and general communications while giving customers access into the organisation. It’s all about interaction and whether or not this leads to increased sales is dependent on the use of the data gathered via these interactions with customers and strategic capability of the marketing department to convert brand awareness into brand loyalty.

Just because Facebook has hundreds of millions of people to sell things to doesn’t mean marketers should be lazy, there is still the need to be creative be proactive in responding to customers needs if marketers are to successfuly sell their products while using Facebook as part of an effective marketing strategy!