There is a phenomenon that attracts hyenas in droves. This is the three-day "midnight madness" sales of the top shopping malls. It happens every quarter. One mall owner confessed that this started as a strategy to offset revenue shortfalls during the quarter. Of course, the other malls followed suit, timing theirs on the same three days. Over time, customers have gotten used to the midnight madness sales. They have, therefore, learned to shop less during the quarter and shop more during those three days. This has worsened the problem being addressed (i.e. poor sales during the quarter). And no one can get out of it. The hyenas have won.
There is a way to get out of the crests and troughs of sales due to midnight madness. This is to make every day a low-price bargain day. If a store can afford to slash prices during bargain days, why can’t it do so for every single day of the year? There is only one reason why there should be "sales days" and that is to get rid of non-moving inventory in order to make way for new ones.
But do hyenas like to shop everyday or is the feast and famine pattern of quarterly bargains more attractive to them? I suspect that hyenas can be trained to eat every day instead of every quarter. This is supported by the flea markets for second-hand imported goods, more popularly known as ukay-ukay. A surplus store in Megamall offering very low prices for such goods attracts a lot of customers every day. This is proof that "every day is a bargain day" can work.
Entrepreneurs who seek the hyena market will thrive best during hard times when everybody is trying to stretch the peso. Value meals in fast food outlets, fish balls peddled in street carts, and the rising consumption of instant noodles all attest to this.
However, entrepreneurs might also like to address the lion market. Before hyenas feast, the lion and his pride hunt for their food. The pride spots the weaker, slower, and smaller animals of the herd for easier kills. During hard times, they take on baby elephants, giraffes, and buffalos. They need the combined cunning of the team to surround and wear down the prey.
From this example, entrepreneurs should "sacrifice" to entice entire prides of lions to one’s store by offering irresistible "preys". Perchance, the lion might also buy the other items in the store during their killing sprees. When the lions are angling for larger prey, say during Christmas time, stores must offer a larger array of attractive but well-priced merchandise.
My favorite department store does this. Generally, the store carries pricey items but, during Christmas, it displays many gift items that look and feel expensive but are actually light on the wallet. The prices of goods in the store range from "giveaways" for office staff to medium-priced gifts for friends to pocket-burners for close relatives, bosses, and a special someone. Customers take the bait. They enter the store for the value-for-money items and end up buying the contents of their entire Christmas tree.
The key to attracting lion customers is to offer reasonably-priced items that are not found in all the other stores. They must look unique and classy and, yet, be kind on the budget. The customer must not feel cheapened like a lowly scavenging hyena. He must feel proud of the purchase like a lion should. If the purchased item was a gift for a special someone, then there would be an even greater desire to convey value and distinctiveness.
The entrepreneur on a safari hunt for lions and hyenas must heed the rules of the wild.
• All animals look for water. They risk their lives for that life-sustaining drink. The water holes are high-traffic malls, store clusters, and shopping strips. Locating there will attract all sorts of animals.
• Once there, carefully select all purchase items for sale that will be most aesthetically and functionally appealing, yet easy on the wallet. This will attract the prime customers, the lions.
• For the lion hunters, hold off on regular madness sales. This will only reduce your sales for the non-madness days. Hold these sales only when you are getting rid of old inventory to make way for new attractive items.
• For entrepreneurs catering to price-conscious hyena-customers, there are two choices. You can either have an everyday-is-a-bargain-day system or do the midnight madness thing. I prefer the former to the latter. I will only reserve the madness days for inventory clearances.
• Of course, there are other animals in the wild. There is the giraffe, who prefers leaves high up in the trees. Catering to the giraffe’s special diet requires a different strategy. Specialize. Customize. Segment. This is the way to get to the giraffe. There is the bear who will brave the sting of bees in order to get his honey. Top quality. Great service. But at high cost! This will get the bear. Then, there are the killer ants who annihilate all living creatures in their eating path. Entrepreneurs who cater to ants are the mass appealers to a broad range of customers. The mass market likes a little bit of everything. Accessible. Appealing. Available. Acceptable. Affordable. These are the five A’s of the killer ants. All these are the way to get them.
(Eduardo A. Morato, Jr. is on the faculty of the W. SyCip Graduate School of Business of the Asian Institute of Management. For comments and inquiries, you may contact him at: wsgsb@mail.aim.ed.ph. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at http//:www.aim.edu.ph).