Wednesday, July 18, 2012

Small Town Pricing Part Two

My last post hit home for a few people who are in situations where they're dealing with exactly the issues I mentioned...One person gave me permission to use her story in the hopes that someone would have some suggestions for her. If you have any ideas please feel free to add them in the comments section!

This reader (we'll call her Sue) lives in a very small town in an isolated area, and unless you've lived there forever you're considered to be a newcomer. She's lived there for twelve years, but is still looked at as a newbie to the area. (I won't identify her on the off-chance that someone sees any of this and it makes the situation worse. It's unlikely, but wouldn't it just be my luck to be the one to stir the pot!)

For a long time Sue was the only licensed baker in town, but with the recent cupcake craze other businesses have been popping up. One in particular is owned by someone who's a long-time resident, so she's considered to be higher on the small-town totem pole than Sue is. This has drained a lot of business away from Sue, since people are going to the other woman's shop instead of hers, even though the reviews for Sue's products are really good.

People who have worked with Sue in the past have started working with the other shop owner, and she even had one person tell her that she wasn't going to carry cupcakes in her shop, then later announce that she was going to be selling the other woman's products. Due to various other things that have happened, it's pretty obvious that all of this isn't a reflection on Sue's product or her pricing, it's because the other woman is a "real" resident of the town, while she's considered to be a newcomer.

Case in point, the new shop owner does very basic marketing, but everyone knows her so they go to her shop. Sue has a very thorough marketing plan and uses a lot of different advertising venues, but her business has still dropped off since the other shop has opened up.

My advice to Sue was that she might be hitting her head against a brick wall with the cupcakes, and since she had mentioned that she had thought about focusing on cakes instead, maybe she should do that. After she spoke to another friend who's also in the business she has since decided to go that route, because the fact of the matter is that as long as cupcakes "belong" to the long-time resident, it won't be possible to get back into that.

If you have any concrete suggestions for Sue, or anyone else who's in a similar situation, please leave them in the comments section below. This is a strange problem because it defies the laws of rational behavior, and the standard advice of "make a business plan" etc just aren't going to help.


 Kara Buntin owns A Cake To Remember LLC in Richmond VA, and cake supplies online at www.acaketoremember.com and www.acaketoremember.etsy.com

2 comments:

Jenniffer said...

First of all, I think diversifying is a good thing. I think the "cupcake craze" will blow over. In my area we are already seeing them start to close (and Fro-Yos pop up in their place). Everyone has birthdays and weddings, so she should see steady business with cake. I used to sell cupcakes, and when all the cupcake places popped up, my business dropped a lot. If I sold nothing but cupcakes I would have been out of business too.

I touched on this the other day, but has Sue considered looking outside of "Mayberry" for sales/marketing? Maybe the people in "Mount Pilot" appreciate a good cupcake?!

Kara Buntin said...

That's what I was thinking too, Jenniffer. Concentrating on jsut the cakes would probably be good in this situation. Going outside her general area is probably the best bet!