Lord Sugar and the Telegraph corner shop

As a marketeer I’m always on the lookout for inspirational ideas and stories about how businesses and business people are successful in marketing their products and services.  Few business people will fail to recognise the face of Alan Sugar, even fewer will fail to acknowledge the value of reading his autobiography – What you see is what you get. I’m currently about half the way through it and thoroughly enjoying the read. Apart from it giving me an insight into the man, it is also challenging a key tenet of my belief about the value of low pricing as part of a marketing strategy. The Amstrad strategy was always built on “stack them high and sell them cheap” and without a doubt it was a successful ploy; the company made millions that way. In my marketing workshops I advise small and medium sized businesses to avoid this strategy and to focus on quality and customer care because only the big boys with massive buying power can win in a low price war; it’s a well documented marketing theory and one that’s easily understood. Once the undercutting begins, only the player with the biggest and deepest pockets can win out.

So how did Amstrad, far from the biggest player in the field at the time, manage to succeed by flying in the face of accepted marketing theory? Key to the phenomenal success was being able to source materials, production and manpower at a far lower rate than its competitors. That way it could control costs and maintain the low unit price that allowed it to sell at sometimes 1/5 the price of its competitors. Yet critically Amstrad cornered the market by doing something different, something very simple – it gave its customers exactly what they wanted. At a time when advances in consumer technology were ever increasing in speed, the now Lord Sugar and Amstrad stayed ahead of the game, giving “the lorry driver and his wife” precisely what they wanted, affordable technology that was of the time and did what they wanted it to do.

So where does this tie in with the Telegraph’s recent celebration of British small wonders; our corner shops? The newspaper’s recent Best Small Shops in Britain Awards uncovered an absolute cornucopia of commercial success, from the Best Interiors shop, Utility in Liverpool to the Best for Food, The Cheese Shop in Louth, to the Best Book Shop, The Book Hive in Norwich.

 

Amongst the winners and runners up were florists, village stores, vintners, cobblers and purveyors of all things scented and feminine. Their diversity could not be overlooked but then again neither could their commonality. Each and everyone one off them had a shared secret – they had identified their ideal customer, understood precisely what they wanted and gave it to them at the price they were happy to pay. That’s not to say they are the cheapest, far from it in some cases, but they had cornered (no pun intended) their own little section of the market place. Unlike Amstrad, none of them were piling it high at knock down prices but precisely like Amstrad, they all understood their customer needs, wants and desires. I’m learning a lot from Lord Sugar and agree with his assessment of him being a natural marketeer – he knows that marketing is far from being all about the packaging and logo. However, I might presume to take issue with his belief that his success was purely down to being able to got to market with the lowest price; it was a big element, but in the end he was giving customers exactly what they wanted; and if you don’t do that, you won’t be in business for very long, whether you have 1/3 of the European market or run a corner shop in Surrey.

Written by Graham Parker MA MCIPR

Graham Parker MA MCIPR

Thanks for reading Graham Parker’s blog, please do leave a comment. For more information about Parker PR contacts Graham here

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Graham Parker MA MCIPR Thanks for reading Graham Parker's blog, please do leave a comment. For more information about Parker PR contacts Graham here

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