Are you producing what you wish to sell or what the market demands?
Are you producing what you wish to sell or are you producing what the market demands?
Sure, you need to fill that production capacity but…here is what I've learned:
Often I see commercial decisions driven by filling distillery or brewery capacity rather than by a long term brand strategy.
I call that wishful demand planning.
My mum used to say it about salt on dishes: you can always add it later but you can't remove it from the dish.
I feel the very same with brands. Once you have spammed the market with your product, you can't really withdraw that distribution easily.
Right, there is no silver bullet and each case is different but some thoughts:
- analyse your portfolio: Which brand is the best candidate for it?
- think as a consumer: are you alienating them by making your brand available almost everywhere?
- recommended pricing: a bigger footprint automatically means modern trade which translates into more promos, more often.
- left and right pocket: are you sure that better cogs are translating into better margins on those incremental volume?
The pursuit of better cogs (cost of goods) might not bring happiness overall.
No matter which P&L line you improve, what counts is the bottom-line.
It's easy to mess up when you try to scale up.
