Depth v/s Breadth…..which is better?

At the outset, my apologies..I am using the marketing concept of depth and breadth in different context altogether….

I am going with the following definition of breadth and depth here..If we are looking at acquiring new customers to grow the business in B2B situation, it is breadth. If we are looking at maximising on the opportunities for growth by working more on our existing customers, it is depth. In B2C situation, If we are looking at achieving more sales per retail counter, it is depth. If we are looking at adding more retail counters, it is breadth.Though this definition has its own limitations, I wanted to relate this concept to two business situation that I came across recently. Let me narrate these two situations…..

I) A B2B company is having the large existing accounts and also large number of small prospective customers. Since they get low to medium share of business from the large customers, there is an opportunity to work on the large customers and strive for higher share of wallet from them. On the other hand , there are other opportunities for growing the business, one of them is large number of small players who have may likely to value the expertise this company brings on the table. Should they focus on the existing clients and try to get more share or look for new customers even though they are smaller in size?

II) The consumer product company wanting to launch it new brand across the country. In the first phase, they selectively launched in some states.There was initial euphoria among the channel members that resulted in good primary sales.After few days, there were no repeat buyers from the retail counters and hence no further primary sales.The reason they cited was that the customers are not aware about the brand and they were facing resistance in pushing the brand even though the margins were attractive compared to the established brands. The company was in a dilemma, should it invest its resources and continue to launch in the rest of the country as planned or work on creating awareness among the consumers in the geography where it had selectively launched? A depth strategy would have enabled them to invest resources in creating awareness among the consumers that would have helped them to create the necessary “pull”.

In many cases, we may come across a dilemma of whether we go deeper in the markets/accounts/segments that are being served by us currently or go for new markets/segments/accounts.I thought of sharing some pointers

1.The quantity and quality of Sales force  need to be audited when we are deciding between  depth and breadth. The competencies required might be different.We might need larger sales force when we go for breadth.The tendency of the sales force sticking to the known terrain need to be understood and addressed.

2.The cost of going for breadth need to evaluated. I am reminded of a popular situation in some of the medical devices. Products like cardiac stents, Heart valves, some of the implantable orthopaedic and spine products….etc are consigned in hospitals and the invoice would be raised only when they are implanted/used.Opening a new account means placing one full set on consignment. Sometimes, it is profitable for them to get more units used by the same operators or adding new operators in the existing centers.

3.If we are choosing breadth, we need to be aware of change in consumer buying behaviour across different segments and geographies. We may even encounter different competition that might force us to tweak our communication, product offering,pricing customer related promotional activities…etc 

4.Develop some quantitative dashboards.example, % penetration, market share, product-mix, customer-mix…etc. I was recently asking an area manager about the channel penetration.He was saying that their products are available in 90 retail outlets and I asked him about the total number of outlets that are available in his area, his answer was 300.That means we have a scope to add more outlets in the same area.But when we analysed further , we realised that there are many non performing (40% to be precise)  retail outlets out of the 90 outlets they are serving for want of support from the company.. A dashboard of capturing some of these parameters may help us in analysing the available opportunities in the existing market/segment/accounts and develop before we embark on a journey of breadth. 

5.When we are choosing breadth, We can also look at preparing a robust engagement plan so that our existing customers are stone walled.While we are busy achieving breadth, our existing accounts/markets would be under attack.

6.If we have multiple products in our basket, we may also look at ideal product mix that we would like to achieve in each existing account and compare it with the the achieved product mix in each of the existing accounts.If the delta is large, we may choose to go for depth.Doing justice to each product from our basket in the accounts/markets we are present would be advisable.

 To sum it up, whether is breadth or depth,  the answer needs to be scientifically deduced, trade offs clearly understood and the rewards and risks internally debated. By the way, a written down short term growth plan would help.

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