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Tuesday, September 26, 2006

Don't get stuck in the Shrinking Middle

1) Be the low cost producer or 2) differentiate with product leadership or 3) focus on customer intimacy or die.

This article succinctly illustrates the dilemma facing today's marketers. Just replace the name "SYSCO" for Wal*Mart when reading.

CHICAGO--(BUSINESS WIRE)--Sept. 12, 2006--Despite significant investment, innovation among foodservice manufacturers has been increasingly ineffective. "Foodservice manufacturers have relied too heavily on 'copycat' items, line extensions and package modifications and have not focused on real innovation," states Bob Goldin, Technomic Executive Vice President and Co-Director of Pacesetters. "There is a clear need for fresh thinking and new approaches."

So, if you are not differentiating on product innovation and are not the low cost producer (playing the distributor private label game) the only option is to focus on customer intimacy:

1) Identify your best street customers. 2) Communicate regularly and cost-effecitvely. 3) Reward their new purchasing behavior with something other than discounts. Sound familiar?

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