Q:  My firm’s net contribution was –$600,000, how can I recover?  Can I recover?
A:  Yes, you can recover.  You are operating in a dynamic, high-tech industry where future performance is not necessarily indicated by past performance.  A firm’s success depends on how well it is able to meet the current needs of its customers and how well it is able to anticipate and react to competitors.  Each period brings new opportunities, new customers and new challenges—so, focus on where you want to be, not where you are.  Figure out why your market plan resulted in a poor net contribution, and then fix the problem and “press on”!

Q:  Our product is better than our competitor’s, but they are selling more.  Why
A:  There can be many reasons for this.  First, your product is only one aspect of your total marketing mix—how do you compare on the other aspects such as personal selling, advertising, etc?  Also, it’s useful to think about the basis on which you have concluded that your product is “better”?  Better from whose perspective, and based on what research evidence?  For example, is a higher Error Protection Index always better than a lower  one?

 Q:  My firm got off to a good start and so there was not much reason to make big changes in the strategy, but now things are not going very well. 
A:  There are a variety of factors that may cause this. First, some competitors may have improved their strategies and made the competition tougher for you.   A competitor who was not “on  target” before may be doing a better job now meeting the needs of your target market—and shaving off customers.  Even a “me-too” competitor who follows your lead and tries to copy elements of your strategy can cut into your profits.    In addition, a strategy that worked in the past may no longer be the best for the current situation.  For example, in an earlier period your spending on customer service or advertising may have been high relative to other firms, but if they have now increased their spending your firm may be at a disadvantage on a relative basis.  Or, your product may no longer match your target customers’ preferences.  Finally, if growth is slowing and the  product-market is moving into the maturity stage, the competition is likely to become tougher and profits lower as you and your competitors battle for market share. 
     As a final note, keep in mind that the VRD market was probably more “forgiving” of some strategy mistakes in the early periods because initially there is quite a bit of growth in demand.  However, if the rate of growth slows down—and it usually does as markets become more mature--a well tuned strategy is more and more important.

Q:  Our product is identical to one of our competitor’s, yet they are selling considerably more than we are?  Why?
A:  When products are virtually identical, other elements of the marketing mix become even more influential in the customer’s decision process.  For example, when two products are basically the same from the customer’s perspective and the customer is more familiar with one (through advertising), the more familiar brand is more likely to be purchased.  As another example, dealers can also play a major role.  If two  products are very similar, but one has more support from the dealer, which one are customers likely to buy more frequently?