This is ostensibly a business blog, so let me make one business-related observation from the field. A couple days ago, my son and I visited the central market in Ayacucho, Peru. Great fun, markets, because you get a vivid snapshot of the town you’re in.
Most markets I’ve seen tend to group vendors of like things, so you have your meat section, your cheese section, vegetables, grains, witch-doctor supplies, touristy things, etc. This is convenient for buyers because one knows where to go for a given item. And with so many, say, pig-parts vendors in one place, there’s built-in competition, which keeps prices low. It’s not unlike the way car dealerships tend to cluster along high-traffic roads in the U.S.
Of course, this is both a blessing and a curse for the sellers. Imagine if you’re selling beans. Being clustered with a dozen other bean mongers is great because anyone shopping for beans is invariably going to come to your section of the market. But what’s the first thing they see? A dozen bean sellers, each with mostly similar beans. Your commodity status is now evident, so you have no chance of commanding a significantly higher price.
Now what if you sold organic beans? They are inherently more valuable, but only to the right customer. To the rest, your beans look just like everyone else’s. Only, you charge more. So, does it still make sense to sell your organic beans in a mass market alongside the commodity beans? If organic bean buyers frequent the market, perhaps. They probably do, but represent a small percentage of the shoppers who will pass by your stall. You will waste a lot of time talking to unqualified prospects, explaining the benefits of organic beans, only to make a smaller number of sales compared to your generic-bean neighbors.
Which gets me to my point, er, question: if you have a product or service that is inherently unique and more valuable but looks like a commodity to the uninitiated, what’s your best bet for finding customers? Do you locate yourself in the “central market” (yellow pages, trade shows, directories, etc.) and hope to convert commodity buyers? (Remember, your time is valuable, so spending 80% of your time trying to convince non-buyers is a tremendous cost. You could call it advocacy or market education, but can you afford to single-handedly educate the unwashed masses?) Or do you forsake the central market and try to make your sales only to those already inclined to buy your wares? To use the organic bean example, might you have more success trying to market through or directly to natural foods stores and vegetarian restaurants?
As a small token of thanks of reading, I’d like to share a few snapshots from the Ayacucho central market. You can find more pix at my Flickr site
Juice vendors.
Magical potions and herbal remedies.
Meat in its many forms (and why my son says he might turn vegetarian).
The market altar.
A couple blocks outside the market. Smart location: lots of traffic but no rent!
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