Economics is a science created since the beginning of human interaction. It describes production, distribution and consumption of products and services. The ease of learning the basics of economics is relative to the professional background you might have. Usually learning the science is only exclusive to those that have chosen to go down that path. But how can anyone of us not be concerned with learning the basics at least – after all we are effected in every moment of out lives?
The story goes:
Upon the request of my girlfriend (who is so much more into shopping than me) we chose to visit the local green market for some fresh groceries shopping. Here in Skopje, we have a variation of a green market, which is a semi-open place with a lot of different stands where mostly fresh produce are being sold. It is very dirty, crowded and loud, but the offer and prices are unparalleled. And yes, I am not a huge fan of such places.
Walking around with bags in my hands (being the gentlemen you are supposed to be), my mind started to wander. We were inside a market. How cool was that!? I have studied economics and business, have read books and posts, but could not identify that I had a real market close to my house. Imagine that!
Things get even better. Strolling the narrow alleyways I could really see the basics of market economics:
- Large number of suppliers
- Even larger number of consumers
- Same or very similar products on offer
- Each of the individual locations has a fairly same exposure to consumers
- Prices on similar/same products are almost identical
- Pricing strategies rely heavily on customer demand – on weekends, prices are significantly higher
Could I be witnessing an almost perfect market:
A market in which buyers and sellers have complete information about a particular product and it is easy to compare prices of products because they are the same as each other.
Now the fun part! What do the sellers on the green market do to make more sales? If we are talking about a perfect market, than all would have same results. But this was not the case – clearly there were winners. With the clear intention of seeing why they were winners, I went to buy stuff from them. At the first contact bell started to ring – these people had real competitive advantages.
An advantage that one has over its competitors, allowing the achievement of greater results, is a competitive advantage.
How green market sellers use competitive advantage to sell in an almost perfect market?
The green market is the perfect place to show how the competitive advantage is basically used. And that Sunday I learned quite a lot about the simplicity of succeeding inside such congested markets.
Quality – Selling Tomatoes
Lot of sellers sell tomatoes. You could see then on every second selling stand. Prices varied in a 50% price range. Is then any tomato a tomato? Apparently not! Buying the most expensive tomatoes from a woman with a very crowded stand gave me an insight. Those came from geographical position which was very suitable for growing a tomato sub-sort which makes large, sweet and crispy tomatoes. Bought 2 to compare to the ones that cost 30% less and the difference was apparent.
Now I am hooked to the best quality tomatoes and the woman that pushes high quality ones has one more loyal customer.
Specialisation – The “Garlic Boutique”
Have you ever heard of a “Garlic Boutique”? Well, there was a stand which only specialised in selling garlic related products. The line in front of it was long and the people selling were clearly busy. From the design of the stand, to the product packaging, I could conclude that they were doing a lot better than others selling garlic. Even better – they had made a brand from selling garlic. The owner was very proud to present the product portfolio and argue the unmatched offer.
Marketing/PR – Sign War
Communicating in such a crowded place is very hard. Innovation makes some creative solutions to this problem:
- Sign War – communicating the product attributes to the potential customers is a genuine “sign war”. Everyone competes with colours, creative texts, fonts and shapes.
- Loud is better – yelling louder than the competitor brings more customers to your stand. Or at least, it should. Calling out passing customers in a direct way sounds insulting to me personally, but the fact that the technique is used justifies it for other “target groups”.
- Referral – building relationships among the sellers can go a long way. Most merge together and offer each other’s products to customers. When I finished shopping for tomatoes, I was referred by the seller to a neighbouring stand to buy products which she did not have on offer, but she vouched for. Of course I followed her referral.
Selling techniques – Front of Stand Selling
As far as selling techniques go, the best one I saw was selling in front of the stand. This technique is far more personal. The seller makes a better relationship with you and looks at your needs. After looking at a few sellers doing this I could see that their conversion was very high.
Customer Service (or NO)
The situation: a highly specialised stand is selling a special variety of peppers that are in high demand now. There is a constant line in front of the stand. Business is good.
I look at the offer and wait patiently. Once it is our turn my girlfriend starts picking peppers from the large pile. She wants to choose what to buy. The seller rudely points out that you either stop choosing and pick up peppers from one side of the pack, or do not buy at all. We looked shocked but the seller did not care – the line was packed. Somehow I can see a resemblance to the Street Musician thinking short term.
Different Offer – The White Aubergine
Have you ever seen a white aubergine?
It was definitely a first time for me! In a market full of regular aubergines we saw a new kind. We did not care about any selling lines or small talk from the seller. We bought it immidiialtey just for the sheer “coolness” of it.
Bringing It All Together
This trip to the green market was really fun. Looking at simple things in life from a business/economics perspective can be very cool. I can say that no matter the scope and size of business, the environment dictates adaptation in order to succeed. Even the smallest chain in the economy (private sellers on the green market) are using the basic principles of business to fight for the market. What is even better is that they are doing this naturally. Using the techniques I listed above comes as a second nature to them because their existence fully depends on the volume of sales.
And here we are, spending years on learning fancy theories when you can visit the local green market and see them in action.