Marketing
| What is Marketing? | |||||||||
| Marketing Philosophy | |||||||||
| Competitive Strategies | |||||||||
| Marketing Objectives | |||||||||
| Unique Selling Proposition | |||||||||
 
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| Business vs Consumer Markets | |||||||||
| Case Studies | |||||||||
| Take Quiz | |||||||||
| A marketing orientation can be defined as focusing the organisation on identifying and understanding the customers' preferences in terms of needs and wants and delivering them more effectively and efficiently than competitors. | |||||||||
| Prior to the adoption of a marketing orientation, many organisations followed what was referred to as the "production philosophy". This approach focused on improving the efficiency of production and distribution to reduce costs and deliver more affordable products as the source of competitive advantage. | |||||||||
| Another philosophy that has been followed historically is the "selling concept". This approach required organisations to aggressively focus on selling and promotion efforts as a way to stimulate demand and drive sales. | |||||||||
| A marketing driven approach or marketing orientation has consistently delivered superior results over these other philosophies. Adopting a marketing orientation is now widely accepted as delivering greater levels of customer satisfaction, profitability and sustainability. | |||||||||
| Worldwide, Toyota, with its strategy to manufacture cars for different segments of the population maintains a balance between customer value and profitability. With the marketing philosophy in mind, it has replaced its original goal of 10% of the world's market share with 'No 1 in customer satisfaction' as it believes its market share will follow the satisfaction it delivers to its customers. | |||||||||
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| Most successful organisations develop strategies to deal with their particular environment that offers the company the strongest possible competitive advantage. In developing these strategies, questions that are commonly addressed include the following; | |||||||||
| Should we compete? | |||||||||
| If so, which markets should we compete in? | |||||||||
| How should we compete? | |||||||||
| As all business situations are different, there is no one strategy that is a best fit for all companies. However there are three types of competitive strategies that you could adopt depending on your position in the market and particular objectives: | |||||||||
| Overall cost leadership | |||||||||
| Organisations that follow this strategy aim to win a large market share by achieving the lowest cost of production and distribution to offer lower prices than competitors. "Aldi" supermarkets are viewed as an organisation that follows a cost leadership strategy with its approach to offer a limited number of quality products at low prices. Its emphasis is on minimising costs at all levels in the value chain, and is proven through its business philosophy, "top quality at incredibly low prices". | |||||||||
| Differentiation | |||||||||
| This strategy leads the organisation to concentrate on creating a highly differentiated product line and marketing program in order to become the class leader in the industry. Woolworths' supermarket business, with its theme 'the fresh food people' has been particularly successful with its differentiation strategy, by positioning the business around the primary value of 'fresh', which is highly regarded by a large proportion of supermarket buyers. | |||||||||
| Focus/Niche | |||||||||
| Organisations that follow this strategy are usually smaller firms that focus efforts on serving a few market segments effectively | |||||||||
| rather than dealing with the whole market. A company could either use a cost focus which aims at becoming a low cost producer for a niche segment or a differentiation focus which aims at differentiated products in the niche segment. Small deli's that focus on a smaller market proportion can be identified as organisations that follow this strategy. | |||||||||
| In summary, it is important to pursue a clear strategy in order to succeed. Firms that do not pursue a clear strategy also known as the 'middle-of-the-roaders', often find it difficult to compete and establish a clear position and competitive advantage in the market | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Case Studies | |||||||||
| Take Quiz | |||||||||
| Marketing objectives define what is to be accomplished through your marketing activities. There are several important factors to consider when establishing marketing objectives. | |||||||||
| Specific, measurable, achievable, realistic and time specific (SMART) | |||||||||
| When setting objectives it is very important to ensure that your objectives are; specific, measurable, achievable, realistic and time specific, or SMART for short. The "SMART" approach allows you to effectively manage your marketing activities and importantly be able to determine how successful they have been and whether they have delivered the particular benefits sought. | |||||||||
| The "SMART" approach is explained to illustrate how you address each area; | |||||||||
| Specific - are your objectives stated in a way that is precise about what you are hoping to achieve? | |||||||||
| Measurable - Can you quantify each objective, i.e. can you use a unit of measure such as market share in percentage or dollars or other to provide a way to check your level of success? | |||||||||
| Achievable - Are your objectives reasonable in terms of what you can actually achieve or are you setting your sights too high? | |||||||||
| Realistic - Do you have sufficient employees and resources to achieve the objectives you have set, if you don't then they are likely to be unrealistic? | |||||||||
| Time Specific - When are you hoping to achieve these objectives, you need to define a timing plan with target timing for each specific objective? | |||||||||
| As an example, ABC stationary supplier sells its goods to newsagents across the country and they want to boost revenue for their product range. To detail this objective more clearly, we could define it using the "SMART" approach as follows: | |||||||||
| To gain 30% market share for stationary by 2010. | |||||||||
| Specific - need to understand the latest preferences of customers in the identified segments and appropriately target each stationary item such as pens, exercise books, rulers, and calculators to maximise sales volumes | |||||||||
| Measurable - current market share is 20%, will set a target of 30% market share, meaning we need an extra 10%, market share amounts can be established based by monitoring the overall value of sales in terms of dollars | |||||||||
| Achievable - ensuring technical competency and commitment of all personnel involved in the development and implementation of strategy. This can range from having an experienced and knowledgeable marketing team to capable sales staff. Access to funding is also necessary for the acquisition of extra stock to fulfil increased demand. | |||||||||
| Realistic - the objective is realistic as the marketing resources are in place to conduct the segmenting and targeting exercise and access to the extra stock required | |||||||||
| Time Specific - the increase in market share is to be achieved within 12 months, a regular progress update will be taken every month to track level of success | |||||||||
| Linking marketing objectives to strategy | |||||||||
| Your marketing objectives should also be consistent with and indicate the priorities of the organisation. This means that objectives should flow from the mission statement of your business, towards the financial objectives and to the rest of the marketing plan. | |||||||||
| For Example, ABC Garden Centre has as part of its strategic plan a goal to grow the business by diversifying its product range, with the specific financial objective of achieving a 10% growth in overall sales which means an extra $75,000 in revenue. | |||||||||
| A linked marketing objective could be to add pre-packaged garden soil as a new complementary product line to be offered with plant sales. To grow the business as per the strategic goal and meet the financial objective of $75,000 in extra sales, it has been calculated that a total of 7,500 bags will need to be sold at their selling price of $10 each. | |||||||||
| Provide direction to employees | |||||||||
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| Case Studies | |||||||||
| Take Quiz | |||||||||
| The starting point in developing your marketing strategy is to come up with your unique selling proposition (USP). A USP is what makes your product or service stand out from your competitors and is generally the reason why customers will purchase your product or service over those of your competitors. | |||||||||
| Some of the common USP's are 'best service', 'lowest price', ‘best value', and ‘most advanced technology'. The aim is to identify these factors and convey them in the marketplace. To convey your USP to customers, you can consider developing it as a tagline to go with your logo if you have one and printing it on all your marketing communications such as business cards, letter heads, brochures, web site etc. | |||||||||
| Consider Intel's USP; in order to be in line with Cyrix's fast computer chips, Intel launched its 'Intel Inside' campaign which aimed at awarding all manufacturers and dealers of computers an advertising allowance to include the 'Intel inside' symbol. Through the co-branded advertising with its business customers, the 'Intel Inside' logo became very popular among the final consumers. This well created unique selling proposition has increased sales and rewarded Intel with large profits. | |||||||||
| Some other examples of famous taglines are following; | |||||||||
| Canon - Advanced Simplicity | |||||||||
| Nike - Just Do It! | |||||||||
| MasterCard - There are some things money cant buy | |||||||||
| Honda- The Power of Dreams | |||||||||
| Microsoft - Where Do You Want to Go Today ; Your Potential Our Passion | |||||||||
| HSBC - The World's Local Bank | |||||||||
| BMW - The Ultimate Driving Machine | |||||||||
| In order to maximise the overall benefit from your USP, ensure that you also communicate it to your staff so that they can understand what it is and why it exists so they can feel a sense of ownership and commitment to it. | |||||||||
| Adding Value to your products | |||||||||
| Adding value to your product or service is an important point to consider when developing a USP. Value adding is when organisations provide their customers a product or service that is over and above the core product / service. The value added component is therefore not necessarily expected by the customer, but when supplied with the purchase provides additional benefit and a potential source of differentiation from competitors. | |||||||||
| An example of value adding can be things like extended product warranties, free delivery, or bonus product features. | |||||||||
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| Q1.What is your product's unique selling proposition? i.e. what makes your product different from your competitors? Give answer | |||||||||
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| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| The success of your marketing strategy involves gaining a comprehensive understanding of the particular markets that you serve. These markets can either be consumer markets or business markets. A simple method of identifying the difference between these two markets is to address the following questions: | |||||||||
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| Business markets involve sales and purchases of goods and services to various businesses, governments and market intermediaries to facilitate the finished product which is generally then re-sold to an end user. In contrast, consumer markets involve the purchase and sale of goods and services to consumers for their own use rather than for resale. | |||||||||
| As there is a significant difference between these two markets, the marketing strategies adopted to serve them also differ. These strategies need to be developed based on the needs, wants and buying processes of the particular market. | |||||||||
| Buying decisions for consumer markets can be complex for large purchases such as cars, houses and holidays, where multiple family members such as husbands and wives, even children will be involved to make a collective decision. However for smaller day to day products and services there is usually a much more simple buying process where one person will be the decision maker and there will be generally a low level relationship between the buyer and the seller, as in the case of a supermarket purchase. | |||||||||
| In business markets however, the buying process may involve a high amount of decision making and will often | |||||||||
| have more than one individual involved in the buying process. For example, there may be an engineer or technical person involved in the specification of the product or service and a purchasing manager in charge of price negotiations. Sometimes in large buying decisions there can even be a team of people from different departments making the purchase decision collectively. | |||||||||
| Q1.Will you be targeting a business market, consumer market, or both? Give answer | |||||||||
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| Listen to Audio | |||||||||
| Case Study Videos | |||||||||
| Take Quiz | |||||||||
| This chapter assists you in understanding your market by focusing on identifying your consumers, competitors and the external factors that influence your business. It also guides you in conducting market research, identifying trends and conducting a SWOT analysis in order to identify your points of difference and points of parity. | |||||||||
| Identifying Customers | |||||||||
| Identifying Competitors | |||||||||
| PEST Analysis | |||||||||
| Marketing Research | |||||||||
| Understanding Trends in the Market | |||||||||
| SWOT Analysis | |||||||||
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| Your market may consist of different customers with different buying behaviours. Some may prefer impulse purchasing while others may prefer taking their time and getting assistance from others. Getting a good understanding of how consumers think, what their buying habits are and what factors influence these habits is essential for you to make the most of your marketing opportunities. | |||||||||
| There are six questions that are commonly asked in regard to consumer buying behaviour: | |||||||||
| Why do consumers buy? Why will they buy the products or services on offer? | |||||||||
| Who buys? What are the characteristics of consumers that are likely to buy from you? | |||||||||
| What do they buy? Which products or services do they typically choose? What brands do they prefer? | |||||||||
| How do they buy? What are their buying habits? Do they buy because it is convenient or do they buy because it is easily accessible? Do they pay cash, or do they use credit cards? | |||||||||
| Where do they buy? Do customers prefer to buy from mail order, retail stores, the internet or from door-to-door? How far are they prepared to travel to buy? | |||||||||
| When do they buy? How much is the behaviour of customers affected by seasonal influences? What about the holiday season? How does that affect their shopping patterns? What about inflation or recession, or higher interest rates?[1] | |||||||||
| Influences on consumer behaviour | |||||||||
| There are many factors that can influence consumer buying behaviour. These can include personal factors; such as age and gender, | |||||||||
| social factors; such as social groups and culture, and psychological factors; such as personality and attitudes. | |||||||||
| Social groups may be made up of family, friends, social clubs or sporting teams. Each group develops its own set of normal behaviour and attitudes which can dictate their buying habits. For example, surfers tend to wear certain types and brands of clothing, while younger children are interested in toys or the latest craze such as skateboards or scooters. | |||||||||
| Roles in the buying process | |||||||||
| Identifying the roles in the buying process can help your organisation in developing the most effective marketing strategy for your business. Different people have different roles in the purchasing process of a particular product. For instance, if you consider a family, there can be different roles occupied by various family members as follows; | |||||||||
| The person who suggests the idea of buying a particular product or service | |||||||||
| The person who advises or carries some weight in making the final buying decision | |||||||||
| The actual decision maker who would ultimately make the buying decision | |||||||||
| The person who would make the purchase | |||||||||
| The user of the product. Therefore a company needs to identify who occupies which role or roles and thereby tailor the marketing strategy to suit. | |||||||||
| Knowing the main participants and their roles in the buying process can help you to fine-tune the marketing strategy. | |||||||||
| Q1.Describe the types of people you want to reach. Give answer | |||||||||
| Q2.What role do they play in the decision making process? Give answer | |||||||||
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| In simple terms, your competitors can be identified as those companies that offer similar products or services to the same customers at similar prices. These can be either direct or indirect competitors. As an example, Kodak identifies Fuji as a major or direct competitor for camera products. However, they also face competition from companies that offer different products, but ones that supply the same service or capability, i.e. indirect competitors which are companies like Nokia who offer mobile phones with digital cameras as an integrated feature. | |||||||||
| Identifying who your competitors are and understanding the approach they take in the market can help you to develop and sustain a competitive advantage. | |||||||||
| The following questions can assist you in identifying and understanding your competitors: | |||||||||
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| Are you competing on price, product, quality or another point of difference? | |||||||||
| When analysing competitors it is important to identify their mix of objectives and the importance of each. For example, some competitors may be focused purely on profits while others may be focused on customer service. Understanding the relative importance the competitor places on profitability, growth, market share, technology etc can assist you in understanding how your competitors may react in different competitive situations. | |||||||||
| Q1.Identify three of your major competitors. Give answer | |||||||||
| Q2.Identify the products/services that they offer. Give answer | |||||||||
| Q3.Describe the products/services that they offer. Give answer | |||||||||
| Q4.What factors contribute to their success? Give answer | |||||||||
| Q5.Assess their weaknesses. Give answer | |||||||||
| Q6.How will you address their strengths and capitalise on their weaknesses? Give answer | |||||||||
| Q7.What are their current market shares? Give answer | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| It is very important to consider the external environment that your business operates in before beginning the marketing process and to continue monitoring for any changes that may influence your marketing activities. To do this you can develop a PEST (Political, Economic, Social & Technological) model to help you identify and understand the various environmental factors that can impact your business and its marketing activities. | |||||||||
| Political and Legal Factors | |||||||||
| You are required to comply with laws and regulations designed to ensure markets operate with appropriate levels of competitive pressure to protect consumer rights and maintain market efficiencies. In Australia, the Trade Practices Act aims to enhance the welfare of Australians through the promotion of competition and fair trading and provision | |||||||||
| for consumer protection. | |||||||||
| It is important when developing marketing initiatives to be aware of any relevant restrictions under the Trade Practices Act to avoid potential fines, negative publicity and expensive civil damage suits. There are also many laws and regulations in place with respect to advertising on the internet and dealing with disadvantaged or vulnerable consumers. For more information visit Australian Competition and Consumer Commission (ACCC). | |||||||||
| The Office of Fair Trading also provides guidelines regarding legal aspects of advertising. | |||||||||
| Economic Factors | |||||||||
| Economic conditions can greatly affect levels of disposable income for consumers and influence the prices they are willing to pay, and the types of purchases they will make. For example, an economic recession or slowdown may reduce the consumers' disposable income, thereby reducing the consumer spending to the lowest level. At this stage, markets often lower prices and increase promotions to stimulate demand as much as possible. Other factors that can affect the economic environment are inflation levels, unemployment, income and resource availability. | |||||||||
| Social and Cultural Factors | |||||||||
| A successful marketing strategy should reflect the needs and wants of consumers. For example, a greater emphasis has now been placed on environmentally friendly products and services. As a result, Virgin Blue Airlines now offers customers the opportunity to offset their carbon emissions for each flight by paying a slightly higher fare during the booking process. | |||||||||
| Technological Environment | |||||||||
| It is important to monitor advances in technology and consider adopting new technologies that can increase your marketing capabilities. The internet is a technology that continuously improves and often provides to introduce new ways of doing things that often result in greater efficiency and effectiveness. The internet offers excellent opportunities to cost effectively research markets, analyse competitors and identify other ways to improve your business. | |||||||||
| Build your marketing plan | |||||||||
| Market Analysis | |||||||||
| Q1.What are some of the political and legal factors that may affect your business? Give answer | |||||||||
| Q2.What are some of the economic factors that may affect your business? Give answer | |||||||||
| Q3.What are some of the social and cultural factors that may affect your business? Give answer | |||||||||
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| Marketing research is the process of planning, collecting and analysing information that is related to a marketing decision that you have to make. Marketing research is vital as it provides you with the specific information you need to breakup or segment markets, decide on which areas to target, and to help identify the best way to position your business relative to your competitors. | |||||||||
| As a fundamental part of business planning, market research can assist you by: | |||||||||
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| While good research can assist you greatly, poor or inaccurate research can lead to bad marketing decisions so it is critically important to plan and undertake your research as effectively as possible. | |||||||||
| Steps involved in marketing research include; | |||||||||
| Step 1: Identifying and defining your problem: | |||||||||
| Prior to carrying out your research it is best to gain an understanding of what your objectives are. | |||||||||
| For instance, your problem may be whether to introduce a new product or not so your marketing research would then be based on assessing the market to identify whether the market would accept this product. | |||||||||
| Step 2: Designing and planning your research: | |||||||||
| Designing and planning your research carefully helps to get you the best results and can save you time and money. | |||||||||
| The two main sources of research include primary research, i.e. gathering information that does not already exist and is for your specific purposes and secondary research, that is gathering information that has been previously collected for any purpose other than your specific needs. | |||||||||
| Primary research is usually conducted through interviews or surveys and while offering the best chance of obtaining highly relevant information for your specific purposes it can be expensive as it is time consuming and often requires outsourcing to a specialist provider. | |||||||||
| Secondary research is often more cost effective as it can be undertaken using any source of existing published information. Popular sources of secondary data include government websites such as the Australian Bureau of Statistics (ABS), government department sites and industry associations. | |||||||||
| It is best to start planning your research by evaluating what data and information is in existence and then determine the specific areas where you may need to conduct primary research. | |||||||||
| Collecting Data and Information: Some common techniques used to collect data and information include; | |||||||||
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| It is important to consider the type of data and information you require to match the best possible collection techniques for each requirement. | |||||||||
| Step 3: Analysing data and information | |||||||||
| Once data and information have been collected, the next step is to organise the information and interpret it in accordance with your research objectives to draw a conclusion and define what choices you have available as the next steps. | |||||||||
| The key to market research success is a systematic approach and the completion of each step before the next starts. | |||||||||
| Using market research | |||||||||
| Once the outcomes of your research are available, you can feed the information into the formulation of your marketing strategy. However it is important to remember that if the outcomes of the research activities are not sufficient to make a decision, you may need to conduct further research as required. | |||||||||
| Step 4: Preparing a report | |||||||||
| It is good practice to always compile your research outcomes into a report with recommendations for further actions. Even if it is purely for your own use in the case of a micro business, preparing the information into a structured report helps to ensure your information is credible and justifiable. If you are working in a larger organisation it will be important to be able to effectively communicate the research outcomes to your colleagues. |
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| Build your marketing plan | |||||||||
| Market Analysis | |||||||||
| Q1.What types of market research have you undertaken? Give answer | |||||||||
| Q2.How far back will your research go? Give answer | |||||||||
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| Identifying and understanding trends in the market assists you to forecast future sales and anticipate events and changes that can impact your business. Trends in the market can be identified by understanding the pattern of growth or decline in sales resulting from changes in environmental factors such as; seasonality, population, social, technology, economic cycles and political climate. | |||||||||
| Trend analysis can look at short, medium and long term trends and can provide information on growth and decline rates for overall markets and individual segments. | |||||||||
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| Build your marketing plan | |||||||||
| Market Analysis | |||||||||
| Q1.What trends have previously affected this industry? Give answer | |||||||||
| Q2.What current trends are affecting the industry? Give answer | |||||||||
| Q3.What trends may affect this industry in the future and how? Give answer | |||||||||
| Q4.Is this industry governed by legislation? Give answer | |||||||||
| Q5.What impact does it have on the industry and the success of your business? Give answer | |||||||||
| SWOT Analysis | |||||||||
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| Take Quiz | |||||||||
| Once you have identified your customers, competitors and the trends in the market, the next step would be to have an understanding of where your product has been recently, where it is now, where it is headed in terms of your plans and the external factors and trends affecting it. | |||||||||
| You can develop this understanding by carrying out a SWOT analysis. A SWOT analysis is based on identifying your business' internal strengths and weaknesses and the external opportunities and threats. | |||||||||
| It is important to remember that the goal is not simply to develop the SWOT analysis, but to transfer the result of the analysis into action in order to help your strategy grow and succeed. | |||||||||
| The final goal of the SWOT would be to identify the critical factors affecting your organisation and then build on your strengths to reduce your weaknesses, exploit opportunities and avoid the potential threats. | |||||||||
| As illustrated through this example, carrying out a SWOT may enable you to identify various factors influencing your business: | |||||||||
| Strengths | |||||||||
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| Weaknesses | |||||||||
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| Opportunities | |||||||||
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| Threats | |||||||||
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| Build your marketing plan | |||||||||
| Business Profile | |||||||||
| Q1.List some of the strengths of your business. Give answer | |||||||||
| Q2.List some of the weaknesses of your business. Give answer | |||||||||
| Q3.List some of the opportunities that exist for your business. Give answer | |||||||||
| Q4.List some of the threats that exist for your business. Give answer | |||||||||
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| Points of Difference | |||||||||
| The positive ways in which your product differs from your competitors is referred to as differentiation. Points of difference are the individual characteristics of a product or service that establish differentiation. | |||||||||
| Points of difference are usually in line with the unique selling proposition and are critical in defining the competitive advantage of your products. In order to gain a competitive advantage from points of difference, they must be benefits that your consumers strongly, uniquely and positively associate with your product, rather than any competing product. Once you have clearly communicated the points of difference to your customers and your customers accept them, your brand will be set apart from your competitors. | |||||||||
| Points of Parity | |||||||||
| It is also important to make sure that your customers understand the specific product category to which your product belongs to. Points of Parity can be viewed as certain features that are shared by members within a certain product category. | |||||||||
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| Build your marketing plan | |||||||||
| Product/Service Overview | |||||||||
| Q1.Identify and describe the points of difference between your product / service and those of your competitors? Give answer | |||||||||
| Marketing Planning | |||||||||
| Watch Videos | |||||||||
| Listen to Audio | |||||||||
| Case Study Videos | |||||||||
| Case Studies | |||||||||
| Take Quiz | |||||||||
| This Chapter assists you in understanding important concepts in marketing planning such as market segmentation, targeting and positioning. It also views the marketing mix as a tactical strategy in marketing planning and thereby discusses the four main variables that are used to achieve your marketing objectives. | |||||||||
| Business Description | |||||||||
| Market Segmentation | |||||||||
| Targeting | |||||||||
| Positioning | |||||||||
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| Business Description | |||||||||
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| A business description allows you to get your ideas, plans and visions down on paper before you go any further. It is important to have a thorough understanding of what your business is, and the direction that you intend it to follow. | |||||||||
| To help you develop your business description, you can brainstorm all of your ideas about what your business will be and the products and services you will provide to consumers. Some questions to consider when brainstorming include: | |||||||||
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| The business description does not need to be overly extensive or detailed. It is mainly to provide an outline of what will be further explored in the business plan. | |||||||||
| Build your marketing plan | |||||||||
| Business Profile | |||||||||
| Q1.What is your business' trading name? Give answer | |||||||||
| Q2.Are you starting a new business, buying an established business, starting a franchise, or are you an independent contractor? Give answer | |||||||||
| Q3.Describe the ownership of the business. Give answer | |||||||||
| Q4.Describe the products/services that your business will offer. Give answer | |||||||||
| Q5.Where will your business be located? Give answer | |||||||||
| Q6.Why is this location ideal? Give answer | |||||||||
| Market Segmentation | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| Market segmentation involves grouping your various customers into segments that have common needs or will respond similarly to a marketing action. Understanding the concept of segmentation is central to marketing because each customer group will require a different marketing mix strategy. Furthermore, each segment will offer differing growth and profit opportunities so the trick is to deliver the best offer to the best segment. | |||||||||
| Some different ways you can segment your market include the following; | |||||||||
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| Build your marketing plan | |||||||||
| Market Analysis | |||||||||
| Q1.Identify and describe the various market segments. Give answer | |||||||||
| Targeting | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| Once you have segmented your market based on different characteristics, the next task is to choose one or more target market segments. Developing different marketing strategies for different customer groups is very important as no one particular strategy would satisfy all customer groups with different characteristics, lifestyles, backgrounds and income levels. | |||||||||
| There are three general strategies for selecting your target markets: | |||||||||
| Undifferentiated targeting | |||||||||
| This approach views the market as one big market with no individual segments and therefore uses one single marketing strategy. This strategy may be useful for a business with little competition where you may not need to tailor strategies for different preferences. | |||||||||
| An example of when undifferentiated targeting can succeed is if your business is the only one of its kind in a small isolated town where you would consider all people living in the town as your target market. However this strategy may not be effective if there are three or four competitors also in town. | |||||||||
| Concentrated targeting | |||||||||
| This approach focuses on selecting a particular market niche for targeting the marketing efforts. Because your firm is focusing on a single segment you can concentrate on understanding the needs and wants of that particular market intimately. Small firms often benefit from this strategy as focusing on one segment enables them to compete effectively against larger firms. Porsche for example, targets an upscale automobile market through "Class appeal, rather than mass appeal". | |||||||||
| Multi- segment targeting | |||||||||
| This approach could be selected if you wish to focus on two or more, well defined market segments and want to develop different strategies for them. Multi segment targeting offers many benefits to firms including greater sales volume, higher profits and large market share. However this method can be costly as it involves greater input from management, increased market research, and increased promotional strategies etc. | |||||||||
| Prior to selecting a particular targeting strategy, you should perform a cost benefit analysis between all available strategies. | |||||||||
| Build your marketing plan | |||||||||
| Market Analysis | |||||||||
| Q1.Will the target market be local, national, international, or a mix? Give answer | |||||||||
| Q2.Will your product/service meet the needs of the target market? If so, how? Give answer | |||||||||
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| Positioning | |||||||||
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| Listen to Audio | |||||||||
| Case Studies | |||||||||
| Take Quiz | |||||||||
| Positioning is developing a product and brand image in the minds of customers or developing a perception in the customers' mind of the experience they will have from purchasing your product or service. The business can positively influence the perceptions of its chosen customer base through strategic promotional activities and by carefully defining your business' marketing mix | |||||||||
| Effective positioning involves a good understanding of the positions occupied by competing products and the benefits sought by the target market. It also requires identifying the differential advantage with which it will deliver the required benefits to the market against the competition. | |||||||||
| Businesses which fail to implement effective positioning strategies can fail to establish a clear perception of their business in customer's minds and hence lose ground in the market to competitors that have a clear position. | |||||||||
| For example, Ferrari is positioned in the prestige segment of the car market with a differential advantage based on high performance and exclusivity. | |||||||||
| Some other car industry examples of strong positioning are following: | |||||||||
| Volvo - safety, quality medium to high price | |||||||||
| Mercedes - luxury and high price | |||||||||
| Holden - quality family cars medium price | |||||||||
| Hyundai - low price | |||||||||
| Build your marketing plan | |||||||||
| Market Analysis | |||||||||
| Q1.What is the positioning strategy for your product/service? Give answer | |||||||||
| Marketing Mix | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| Once you have decided on your overall competitive marketing strategy, you can then focus on planning the details of your marketing mix. A marketing mix is a set of controlled variables that formulate the strategic position of a product or service in the marketplace. | |||||||||
| The primary goal of marketing is to optimise the marketing mix, offering the best possible combination of the four P's to maximise the effectiveness of marketing efforts. The variables known as the four P's of the marketing mix are as follows; | |||||||||
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| Product | |||||||||
| Product is the mix of all the features, advantages, and benefits that you offer to your target market. It may include certain characteristics such as quality, packaging, after sales support, customer services etc. In order to ensure that your customers are gaining the full benefits of your product, you can consider the following questions. | |||||||||
| What is the core benefit your product offers? For instance, customers who purchase mobile phones buy more than just a phone; they purchase the ability to keep in touch. | |||||||||
| What does the actual product include? This includes branding, additional features and benefits that provide differentiation and ensures that customers will purchase your product over the competitors. | |||||||||
| What non tangible benefits can you offer? Factors to consider at this point may include after sales service, warranties, delivery etc. | |||||||||
| Price | |||||||||
| Price relates to the pricing strategy of your products or services. It may include discounts, trade in allowances and credit terms to adjust for the competitive situation in order to bring the price into line with the buyer's perception of the value of the product. Businesses may use different pricing strategies based on different situations. These are listed following: | |||||||||
| Premium Pricing | |||||||||
| This pricing strategy is used where a business may feel that there is a substantial competitive advantage for its products. Such high prices may be charged for luxurious products such as rare automobiles, first class airline services etc. | |||||||||
| Penetration pricing | |||||||||
| This pricing strategy may be used where a business would set a price lower than the general market price in order to increase sales and market share. Once this is achieved, the prices would be increased. Penetration pricing would normally be most suitable for products with high price sensitivity whereby a small change in price would result in a large change in demand. | |||||||||
| Skimming Pricing | |||||||||
| Skimming pricing involves setting a high initial price relative to the prices of competing products. Price Skimming works best for prestigious products since buyers tend to be more prestige conscious rather than price conscious. Due to the initial high prices, the skimming strategy may also enable the organisation to recover its product development costs at an early stage. Once the product has been in the market for a short period, most businesses tend to lower prices over time making the product available to a wider market. | |||||||||
| Competition Pricing | |||||||||
| Competition Pricing involves setting prices in comparison with your competitors. This pricing strategy is one of the most common strategies used by small retail businesses as an attempt to avoid price wars and still maintain a stable level of profit. | |||||||||
| Place | |||||||||
| Place refers to where the sales are to be made and how the products will be distributed. It includes: channels of distribution, the extent of market coverage, managing inventories, transportation and logistics. Put simply, Place involves all activities that deliver the product to your target customers. | |||||||||
| Organisations that facilitate the movement of products from the manufacturer to the final user of the product are known as intermediaries. The common types of intermediaries include: | |||||||||
| Retailers: Those companies that sell mainly to consumers and determine the final selling price of the product. | |||||||||
| Wholesalers: Those companies that purchase merchandise in bulk from producers and resell mainly to businesses, the government and other retailers. | |||||||||
| Agents and brokers: Those firms do not take the title or ownership of goods and services but facilitate the sale of products from the manufacturer to the end user and take a commission upon the sale of goods. | |||||||||
| With the rapid advancement of internet technology and increasing broadband uptake there is currently a move towards selling goods online particularly with the increased use of e-commerce technology. As the internet facilitates a geographically | |||||||||
| dispersed market, firms are now able to reach a wider audience with a low setup cost. | |||||||||
| Promotion | |||||||||
| Promotion refers to the promotional activities that communicate the merits of your product to your target market in an attempt to persuade them to purchase it. It may include various methods of promotions such as direct marketing, advertising, personal selling, sales promotions etc. | |||||||||
| Build your marketing plan | |||||||||
| Product/Service Overview | |||||||||
| Q1.Describe your products/services. Give answer | |||||||||
| Strategy | |||||||||
| Q2.Describe your products/services. Give answer | |||||||||
| Q3.What makes your product/service unique? Give answer | |||||||||
| Q4.Describe the demand for your product. Give answer | |||||||||
| Q5.Describe your pricing strategy and how it lines up with your market. Give answer | |||||||||
| Q6.Why do you think this strategy will be effective? Give answer | |||||||||
| Q7.How competitive is your product/service price compared with your direct competitors? Give answer | |||||||||
| Q8.How will you get the product/service to the end-user and what channel of distribution will you use? Give answer | |||||||||
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| Watch Videos | |||||||||
| Listen to Audio | |||||||||
| Case Study Videos | |||||||||
| Take Quiz | |||||||||
| This Chapter assists you in understanding the advertising and promotional tools that are used in marketing products and services. These tools include Advertising, direct mail, personal selling, sales promotions, public relations/publicity, and online marketing. It also discusses the long term benefits of integrated online and offline offerings. | |||||||||
| Advertising | |||||||||
| Direct Mail | |||||||||
| Personal Selling | |||||||||
| Sales Promotions | |||||||||
| Public Relations | |||||||||
| Internet Marketing | |||||||||
| Integrated Online and Offline Offerings | |||||||||
| Advertising | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| Advertising is an important consideration for your business. It lets your customers know what your business is and the products/services offered, as well as encouraging them to buy from you, rather than your competitors. | |||||||||
| As most small businesses cannot afford expensive advertising campaigns, it is very important to assess the different methods of advertising and select which methods will be most effective in reaching your customers. | |||||||||
| Prior to advertising, ask yourself the following questions: | |||||||||
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| Following are some low cost advertising options that are often a good solution for small business: | |||||||||
| Yellow pages: print copy and online. | |||||||||
| Pink pages or other local and online directories. | |||||||||
| Use signage on your vehicles, stationary and any shop fronts. | |||||||||
| Exchange fliers with other non-competitive businesses who could display them at their location. Also find locations such as shopping centres where you could post a flier on a bulletin board. | |||||||||
| Consider advertising on the reverse side of receipts with major supermarkets such as Woolworths or Coles. To do this you will need contact an advertising firm such as shop-a-docket or hot dockets. This will help you get noticed by potential customers as people tend to go grocery shopping regularly. | |||||||||
| Hand out your business card to as many people as possible and network regularly to make new contacts. | |||||||||
| Advertising on the radio and sending out catalogues may be useful when you are having large-scale sales. | |||||||||
| Traffic pulling displays (trailers with billboards towed behind cars or trucks) during holiday seasons may also be an effective promotion tool. | |||||||||
| Provide free t-shirts and other giveaway items with your logo to your staff and customers to wear. | |||||||||
| Advertising on the sides of buses. | |||||||||
| One of the main benefits of advertising for your business is the ability to communicate to a large number of people at one time. | |||||||||
| Build your marketing plan | |||||||||
| Strategy | |||||||||
| Q1.What is your advertising strategy, how does it support the desired positioning of your business? Give answer | |||||||||
| Q2.How does your advertising and promotion strategy reinforce the customer benefits available through your unique selling proposition (USP)? Give answer | |||||||||
| Q3.How does your advertising and promotion strategy focus your promotion efforts and spend on your identified target market? Give answer | |||||||||
| Q4.List and describe the forms of advertising you will use to promote your product/service and the frequency of the advert? Give answer | |||||||||
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| Direct Mail | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| Direct mail advertising is one of the most common promotional methods in direct marketing. Direct mail advertising involves various printed material that can be sent to consumers in order to inform them about different offers or promotions. Common forms of direct mail advertising includes letters, newsletters, brochures, fliers, inserts into newspapers or magazines and emails. | |||||||||
| Timing is an important consideration in direct mail advertising. For example, direct mail advertising carried out in December may not be as effective as customers are likely to disregard it due to the heavy mail flow during the Christmas period. However direct | |||||||||
| mail advertising would be more preferable during less competitive periods where you would have a better chance of standing out. | |||||||||
| Apart from the timing of advertising, direct mail advertising often requires a strong follow up to be successful. | |||||||||
| It is important to note that promoting your business through direct mailing may have implications under the Privacy Act 1998 (Cwlth) and Spam Act 2003 (Cwlth). | |||||||||
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| Build your marketing plan | |||||||||
| Strategy | |||||||||
| Q1.List and describe the forms of direct mail you will use to promote your product/service. Will this be seasonal? Give answer | |||||||||
| Q2.Why are these forms of direct mail the most effective and how will they benefit your business? Give answer | |||||||||
| Personal Selling | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| Unlike advertising, personal selling is a face-to-face sales activity that occurs between the buyer and the seller. The main objective of this type of activity is to focus on developing a relationship with the potential buyer, with the aim of converting customer interest into a sale. This may be a short term relationship involving only a single or few transactions as could be the case in a retail setting, or a long term relationship involving multiple interactions and repeat business as may be the case in a business to business scenario. | |||||||||
| Personal selling provides the valuable opportunity to directly communicate with new and existing customers allowing you to gain a personal insight into customer preferences and their feelings about your offering, allowing you to feed this information into your marketing mix. | |||||||||
| In the situation where you have multiple sales people it is essential that they are all ‘on the same page' in terms of understanding the product/service thoroughly and present the correct image and information to your customers. | |||||||||
| Build your marketing plan | |||||||||
| Strategy | |||||||||
| Q1.What sales method will you use (brokers, commissioned salespersons, etc)? Give answer | |||||||||
| Q2.Why is this the most effective selling process, how will it benefit your business? Give answer | |||||||||
| Q3.What tools will be provided to salespersons to assist in achieving sales? Give answer | |||||||||
| Q4.Will you be offering incentives to salespersons for achieving set goals? If so, describe. Give answer | |||||||||
| Q5.What training will be provided to assist staff in achieving sales objectives? Give answer | |||||||||
| Q6.What is the total cost of training your sales staff? Give answer | |||||||||
| Sales Promotions | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| Sales promotions are activities that are usually short term, designed to quickly stimulate demand by encouraging customers to purchase your products or services. These may include coupons, free samples, contests with attractive prizes, organising demonstrations and exhibitions, interest free periods and temporary price reductions. | |||||||||
| For retailers, sales promotions can be seen as an effective way for you to increase store traffic as various incentives may motivate consumers who are not store-loyal to visit your store. However sales promotions generally should not be the sole basis for your promotional campaigns as it is only a short term promotional technique, and sales will often decline sharply once a special deal ends. | |||||||||
| Advertising support is often needed in order to convert the customers who tried the product during the sales promotions into a long-term buyer. You should also remember that sales promotions should not be a continuous process. If sales promotions are conducted regularly they may lose effectiveness and customers may delay purchasing a product until another special deal is offered. | |||||||||
| The following factors should be considered to increase the success of your sales promotions: | |||||||||
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| Build your marketing plan | |||||||||
| Strategy | |||||||||
| Q1.List and describe the forms of sales promotions you will use to help sell your product/service. Will this be seasonal? Give answer | |||||||||
| Q2.Why are these forms of sales promotions the most effective and how will they benefit your business? Give answer | |||||||||
| Q3.What is the total cost of all your sales promotional efforts? Give answer | |||||||||
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| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| Public relations, often referred to as PR, involves managing communication between your organisation and any individual or group that is connected to, or affected by it in some way. This could be your customers, suppliers, employees, government or the general public. Public relations can have various goals including education, building or improving a brand or image. | |||||||||
| PR can get an organisation exposure to their audiences by using topics of interest and news stories that do not require payment. As PR provides exposure through credible third-party outlets, it provides more legitimacy than advertising as it is more independent. | |||||||||
| Examples of PR include speaking at events such as conferences and fund raisers, sponsoring local sporting teams or community groups, working with the media by releasing news articles of interest, and communicating with employees and customers. | |||||||||
| However, just as good PR can positively affect your business, any bad PR your organisation receives can be damaging for your reputation and overall business. | |||||||||
| Build your marketing plan | |||||||||
| Strategy | |||||||||
| Q1.What is your strategy for achieving a positive image through public relations (PR)? Give answer | |||||||||
| Q2.Why is this the most effective method and what are the benefits for your business? Give answer | |||||||||
| Q3.Will you use external public relations agencies? Give answer | |||||||||
| Q4.How will you minimise potential negative PR? Give answer | |||||||||
| Q5.What is the total cost of all your PR activities? Give answer | |||||||||
| Internet Marketing | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| The internet can be a great way to do business especially with the increase in the number of people with access to online facilities. Online advertising is similar to print advertising in that it offers a visual message; however, it has some additional advantages in comparison to other modes of advertising. | |||||||||
| Some of the advantages of internet advertising are: | |||||||||
| Rich multi-media advertisements can be developed consisting of drop down menus, built- in games or search engines to engage viewers | |||||||||
| Online advertising can be interactive, i.e. two way communication allowing the user to provide feedback and login registering their details | |||||||||
| Online advertisement can be tailored or personalised for individual audiences, hence targeting different market segments | |||||||||
| It offers an opportunity to reach younger consumers who have developed a preference for online communication | |||||||||
| Results from online advertising are measurable providing the opportunity accurately gauge the effectiveness of advertising campaigns | |||||||||
| The most common forms of online advertising options include: | |||||||||
| Banner ads | |||||||||
| This form of advertising involves embedding an advertisement to a web page. Its main objective is usually to attract traffic to a website by linking via a click through to the website of the advertiser. | |||||||||
| Search engine marketing | |||||||||
| This form of advertising aims at promoting websites by increasing their visibility in search engine results pages. Most internet traffic begins at search engines like Google and Yahoo, you can increase search engine rankings by developing links to other sites within your site and adding fresh content related to keywords that are related to your products or business. | |||||||||
| It is often useful to engage a professional search engine optimisation expert to assist you in improving your search engine ranking results. | |||||||||
| Pay for placement | |||||||||
| Major search engines now offer a facility called "Pay for Placement" also known as "Pay-Per-Click". When using Pay for Placement, advertisers bid on keywords or keyword phrases on which when searched by customers, their ads would be displayed. Most advertisers would benefit from this option as consumers would be attracted towards a particular product for which they otherwise would not have known. | |||||||||
| |
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| Build your marketing plan | |||||||||
| Strategy | |||||||||
| Q1.Will you have a website for your business? If so will you have just simple promotion on the site or offer other features such as online catalogues or online ordering? Give answer | |||||||||
| Q2.Who will be responsible for developing, maintaining and ensuring that the website is being utilised effectively? E.g. search engines optimisation and affiliate exchange programs. Give answer | |||||||||
| Q3.What is the total planned cost of your online marketing efforts? Give answer | |||||||||
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| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| If you intend on carrying out both online and offline marketing for your business, an important point to remember is that isolating your marketing strategy as online and offline can cost you a lot in the long run. Online marketing can benefit immensely from traditional offline marketing such as direct mail and advertising just as much as how offline marketing can benefit from promoting the business through the internet. Therefore, as a small business with a limited budget, using both online and offline marketing together may help you get a better return on investment. | |||||||||
| You may have an effective strategy for marketing over the internet, with a well established website with all the relevant information. However, you may wonder why your sales are not increasing and your return on investment is not what you expected. At this stage, you may want to analyse how many people really know about your website and how many people were actually directed to your website. | |||||||||
| The goal is to have all you marketing strategies supporting one another. For instance, you could use your URL (web address) on every letter, email or magazine that you publish as well as on your business cards. Not only would this help increase the recognition of your business, this would also give your customers additional methods of accessing and purchasing your product. | |||||||||
| Consistency | |||||||||
| Integrating online and offline marketing efforts would also mean delivering information that is consistent with both modes of marketing. For instance, if you use direct mail to communicate a certain sales promotion to your customers, you should make sure that the same message is communicated through the internet to the rest of the consumers. If you fail to do this you may not be delivering the message accurately, which would result in disappointed customers. | |||||||||
| Simultaneous marketing | |||||||||
| You may also consider carrying out your online and offline campaigns simultaneously. This can be achieved by planning your campaign on a specific date and making sure everything is organised from both ends. One way of succeeding this integration would be to distribute printed fliers about a certain promotion and directing customers to your website for more information. | |||||||||
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| • Take the quiz | |||||||||
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| Watch Videos | |||||||||
| Listen to Audio | |||||||||
| Case Study Video | |||||||||
| Take Quiz | |||||||||
| This chapter assists you in understanding the final steps of your marketing process which includes reviewing key performance indicators, monitoring performance and adjusting your marketing campaigns after careful review and evaluation. | |||||||||
| What is an Action Plan? | |||||||||
| Developing an Action Plan | |||||||||
| Reviewing Key Performance Indicators | |||||||||
| Monitoring Performance | |||||||||
| Adjusting a Marketing Campaign | |||||||||
| What is an Action Plan? | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| An action plan integrates all of the strategies you have developed throughout your business plan into a highly organized and prioritised plan of action designed to achieve your stated business mission and goals. | |||||||||
| This is achieved by breaking down the strategies you developed into small, achievable steps and then identifying the actions you need to take for each step. It can be used as a short term (6-12 months) action plan to achieve short term business goals, a medium term action plan (2-3 years) or a long term action plan (3-5 years). | |||||||||
| An action plan identifies the business goal (what you would like to achieve) and the strategies that can be implemented to reach that goal. | |||||||||
| It also explains the specific actions that need to take place in order to achieve the business strategy. This will include the timeframe, roles and responsibilities, performance indicators and alternative methods that can be implemented to reach the business objectives. | |||||||||
| Developing an Action Plan | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Generally action plans are limited to a small and manageable number of goals. This helps to keep the plan realistic and achievable. | |||||||||
| For each action you should identify: | |||||||||
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| Specific performance indicators to help you determine in the future whether your business has succeeded in achieving the business goal. | |||||||||
| Once you have these details identified, you can progress to formulating a series of strategies to be undertaken to achieve the goals of each action item. It often helps to break the various strategies tasks down into simple and specific steps to keep the plan on track and avoid getting overwhelmed or losing control. | |||||||||
| An important step is being able to evaluate within a set period of time if the action plan has been a success. Failing to do so could result in a plan that continues on indefinitely without ever actually achieving anything positive for the business. | |||||||||
| To evaluate your action plan, go back to the initial objectives you set out and decide if they have worked, not worked or are in the process of being achieved. Be critical of each objectives success or failure in this stage. If your original targets were too optimistic, then you need to admit this so that you will be able to move on. | |||||||||
| Sometimes it may become apparent that an action plan has failed to meet its objectives. Therefore, you may need to reassess and redefine your original objectives and strategies to improve their success or abandon the plan and start again at the beginning rather than waste resources on a plan that isn't working. | |||||||||
| To assist you in developing your action plan, you can download a template here. | |||||||||
| Build your marketing plan | |||||||||
| Implementation | |||||||||
| Q1.Develop an action plan which outlines the key tasks and activities required to implement your marketing plan. You may wish to use the action plan sample template, which is available in Marketing > Review and Improve > Developing an Action Plan. Give answer | |||||||||
| Reviewing Key Performance Indicators | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| An important final step of the marketing process is to review and make improvements to your plan. To help you achieve this you can develop and monitor a set of measures to see how well your marketing strategy is working against the objectives you have set. These measures are commonly called Key Performance Indicators (KPI's). | |||||||||
| When setting your objectives and KPI's, it is important to ensure they are practical. To help you do this you can use what is called the "SMART" test. The Smart test ensures that your goals and KPI's are; | |||||||||
| S - Specific | |||||||||
| M - Measurable | |||||||||
| A - Achievable | |||||||||
| R - Realistic | |||||||||
| T - Time bound | |||||||||
| More information on the SMART test can be found at the NSW Small Business website. | |||||||||
| After your marketing strategy has been in place for a reasonable length of time, it is necessary to review its success and identify areas that need to be improved. Over time, changes to your business can occur and you will need to reassess your marketing strategy accordingly. | |||||||||
| The success of the marketing campaign can be measured by comparing its performance in the marketplace against what was originally laid out by the marketing goals. These goals are the key indicators for determining the level of performance your campaign has achieved. | |||||||||
| If the marketing has met expectations and still fits within the SMART guidelines, you may not need to alter the objectives at all. However, if the objectives are not being met, you will need to either change the objectives to make them more realistic and achievable, or implement changes that will make the marketing more effective. | |||||||||
| Build your marketing plan | |||||||||
| Implementation | |||||||||
| Q1.Have you developed a set of Key Performance Indicators (KPI's) to measure against your marketing objectives? Remember you can use the S-M-A-R-T approach. Give answer | |||||||||
| Q2.How often will you review your marketing strategy to ensure that it is still effectively working for your business? Give answer | |||||||||
| Q3.How will you assess the performance of your business in the marketplace? Give answer | |||||||||
| Monitoring Performance | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| Regularly monitoring your marketing campaign is important for it to succeed. You will need to assess and analyse its performance to ensure that it remains effective. This will allow you to have better control over the performance of your marketing strategy. | |||||||||
| One method you can implement to monitor the performance of your marketing plan is a marketing audit. A marketing audit is a comprehensive examination of your objectives and strategies to determine problem areas and opportunities for improvement. | |||||||||
| A marketing audit uses a systematic approach to cover all areas of marketing in a business and does not simply focus on the problem areas. It is an independent review of the direction that your campaign has taken and its outcomes, compared to what was originally laid out by your marketing objectives. They are generally performed by experienced people who are not directly involved in your marketing department. | |||||||||
| In order to be a useful tool, a marketing audit should be conducted on a predetermined periodic basis. This is to provide regular updates and give you opportunities to improve the effectiveness of your marketing strategy. | |||||||||
| You may also choose to conduct internal reviews and monitoring of the performance of your marketing. These can be conducted as frequently as you need, or even run continuously to provide a regular summary of success. By conducting analysis of your original goals with the actual results of your marketing you can set yourself benchmarks to improve upon. | |||||||||
| You can implement strategies such as surveying customers to find out if the marketing campaign has had any influence on them as well as looking specifically at your sales records. You can then determine if there were new customers or more sales after the implementation of a new marketing scheme. You can then gauge if the time and costs associated with the campaign have been effective or if changes need to be made. | |||||||||
| Build your marketing plan | |||||||||
| Implementation | |||||||||
| Q1.How often will you conduct a marketing audit? Give answer | |||||||||
| Q2.Determine the costs associated with a marketing audit. Give answer | |||||||||
| Q3.How will success in meeting marketing objectives be monitored? Give answer | |||||||||
| Q4.How will the contribution made by promotional and advertising efforts be measured? Give answer | |||||||||
| Q5.Who will be responsible for conducting the audit? Will you be using the services of an independent auditing company? Give answer | |||||||||
| Q6.Will you be implementing any strategies to get feedback from your customers? E.g. customer feedbacks. Give answer | |||||||||
| Adjusting a Marketing Campaign | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Take Quiz | |||||||||
| After evaluation and review of your marketing strategies, you may be required to adjust your marketing campaign. This may be due to changes in the market or because the campaign is failing to meet its objectives. | |||||||||
| Firstly this involves evaluation of performance against the original plan. If there is poor performance, you will be required to take corrective action to improve the situation. This may involve significant changes or changes at a strategic level or smaller tactical type changes. | |||||||||
| Strategic control of your marketing campaign involves looking at whether or not your basic objectives still meet the possible opportunities. Often, marketing strategies can become outdated as the marketplace changes frequently. Your business should regularly reassess and modify your marketing programs accordingly. | |||||||||
| Another important factor to consider when adjusting a marketing campaign is the costs and difficulties associated with making changes. You will need to assess all of the relevant and hidden costs of changing your campaign. A decision will then have to be made by comparing the possible benefits of making the changes with the costs involved. | |||||||||
| If the campaign is significantly underperforming or it appears that the marketing strategy has failed, it may be necessary to return to the research and planning stage. You can either abandon the campaign altogether and write off the expenses as a mistake and then start fresh with a new campaign or you might seriously modify the objectives or strategy to try and improve performance. Both have significant costs that need to be taken into account. | |||||||||
| After implementing an adjusted or new marketing strategy, it is important to reassess and evaluate the changes after a short period of time. This will allow you to gauge if the changes are better, the same or worse when compared to the previous strategy. | |||||||||
| Build your marketing plan | |||||||||
| Implementation | |||||||||
| Q1.What procedures will you have in place to adjust your marketing campaign if it is necessary after a review? Give answer | |||||||||
| Market Analysis | |||||||||
| Watch Videos | |||||||||
| Listen to Audio | |||||||||
| Case Study Video | |||||||||
| This chapter helps you to develop the part of the business plan that builds a profile of your business. It focuses on understanding the market and where your business fits best along with developing competitive strategies. | |||||||||
| Market Research | |||||||||
| Defining and Measuring Market Demand | |||||||||
| Competitor Analysis | |||||||||
| Segmentation, Targeting and Positioning | |||||||||
| Differentiation | |||||||||
| Forecasting Future Demand | |||||||||
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| Market research involves collecting, organising, analysing and communicating information that can be used in order to make an informed marketing decision. Performing market research will complement your marketing mix strategy as it enables you to make educated decisions regarding selecting markets, your image or branding and products or services. | |||||||||
| There are five key steps to conducting market research: | |||||||||
| Define the Problem | |||||||||
| In this stage you need to identify the actual problems that are relating to the apparent symptoms. For example, poor sales within a business are not the problem, they are the symptom of a larger issue such as a weak marketing strategy. | |||||||||
| Further business problems may include: | |||||||||
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| Collect the Data | |||||||||
| There are two types of market research that can be performed: | |||||||||
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| There are also a number of different collection methods and techniques such as qualitative and quantitative research. | |||||||||
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| Analyse and interpret the data | |||||||||
| You must attach meaning to the data you have collected during your market research to make sense of it and to develop alternative solutions that could potentially solve your business problem. You should determine how the knowledge you have gained through researching your market can be applied and used to develop effective business strategies. | |||||||||
| Reach a conclusion | |||||||||
| With the alternatives you have developed to solve your problem in mind, perform a cost-benefit analysis of each alternative keeping in mind the potentially limited resources available to your business. You may also need to perform further investigation into each alternative solution to arrive at the best decision for your business in regards to meeting consumer demands. | |||||||||
| Implement your research | |||||||||
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| Build your marketing plan | |||||||||
| Business Profile | |||||||||
| Q1.List some of the opportunities that exist for your business. Give answer | |||||||||
| Q2.List some of the threats that exist for your business. Give answer | |||||||||
| Q3.List some of the weaknesses of your business. Give answer | |||||||||
| Q4.List some of the strengths of your business. Give answer | |||||||||
| Market Analysis | |||||||||
| Q5.Is this industry governed by legislation? Give answer | |||||||||
| Q6.What trends may affect this industry in the future and how? Give answer | |||||||||
| Q7.What current trends are affecting the industry? Give answer | |||||||||
| Q8.What trends have previously affected this industry? Give answer | |||||||||
| Q9.What are some of the technological factors that may affect your business? Give answer | |||||||||
| Q10.What are some of the social and cultural factors that may affect your business? Give answer | |||||||||
| Q11.What are some of the economic factors that may affect your business? Give answer | |||||||||
| Q12.What are some of the political and legal factors that may affect your business? Give answer | |||||||||
| Q13.What types of market research have you undertaken? Give answer | |||||||||
| Q14.How far back will your research go? Give answer | |||||||||
| Q15.What impact does it have on the industry and the success of your business? Give answer | |||||||||
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| Defining and Measuring Market Demand | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| Defining the demand for your product within the wider consumer market is an important step in market analysis. It will help you to develop effective strategies to promote and sell your product to as many potential customers as possible. | |||||||||
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| Market demand is the total volume of a product or service that would be bought by a consumer group where the location, time period and marketing effort are defined. Market demand can depend on environmental factors as well, such as the sales of a related product or service or the current economic conditions. | |||||||||
| Base line market demand is called the market minimum. This refers to the number of sales that would occur regardless of any marketing efforts or underlying factors. There is also a limit to market demand that is referred to as market potential. Mark | |||||||||
| et potential is where an increased marketing effort, even combined with other factors, would have no effect on overall sales. | |||||||||
| Market demand can also be divided into two categories, primary and selective demand. Primary demand is the total demand for all brands of a given product or service. Selective demand is the demand for a given brand of product or services. | |||||||||
| A business should estimate what its share of the market could be in order to assess its business potential. Once you have analysed the entire potential market for your product, study the competitors and their customers. Then gauge what amount of this market you can realistically see your business capturing. | |||||||||
| To measure market demand, you can use published industry statistics, surveys or even by spying on your competitors and compiling a list of how many customers they have and how many sales they make. | |||||||||
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| Competitor Analysis | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| To be able to effectively gain an understanding of the market you are preparing to enter, it is vital to have an in depth knowledge of your competitors. The better that you understand the competition, the more effective the strategies you can make to compete with them. | |||||||||
| Essentially if your product is something that people want you will have little trouble selling it, provided that there are no competitors. However, there are almost always competitors, or at least there soon will be if a product is successful. These competitors will either make a similar product in a way that makes it superior to yours, or they will undercut you on price and offer better value to the customer. | |||||||||
| Understanding your competitors will also help you to develop a better understanding of your customers. You can learn the reasons that customers buy from competitors as well as understanding what strategies the competition use to market to these people. | |||||||||
| Competitor analysis can be performed using two methods. You can observe your competitors firsthand as a customer yourself, entering their stores and utilising their services to see how they operate. | |||||||||
| You may also choose to talk to the customers of a competing business and find out directly from them what makes them choose one business over another. It could be value, quality, service, reputation, indifference or simply habit. | |||||||||
| Build your marketing plan | |||||||||
| Market Analysis | |||||||||
| Q1.Identify three of your major competitors. Give answer | |||||||||
| Q2.Identify the products/services that they offer. Give answer | |||||||||
| Q3.Describe the products/services that they offer. Give answer | |||||||||
| Q4.What factors contribute to their success? Give answer | |||||||||
| Q5.Assess their weaknesses. Give answer | |||||||||
| Q6.How will you address their strengths and capitalise on their weaknesses? Give answer | |||||||||
| Q7.What are their current market shares? Give answer | |||||||||
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| Segmentation, Targeting and Positioning | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| In order to be an effective and efficient business, you should seek out your target customer market. There are three main issues to consider when determining your target market: | |||||||||
| Market segmentation | |||||||||
| Market segmentation involves grouping your various customers into segments that have common needs or will respond similarly to a marketing action. Each segment will respond to a different marketing mix strategy, with each offering alternate growth and profit opportunities. | |||||||||
| Some different ways you can segment your market include the following; | |||||||||
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| Targeting | |||||||||
| After segmenting the market based on the different groups and classes, you will need to choose your targets. No one strategy will suit all consumer groups, so being able to develop specific strategies for your target markets is very important. | |||||||||
| There are three general strategies for selecting your target markets: | |||||||||
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| Prior to selecting a particular targeting strategy, you should perform a cost benefit analysis between all available strategies and determine which will suit your situation best. | |||||||||
| Positioning | |||||||||
| Positioning is developing a product and brand image in the minds of consumers. It can also include improving a customer's perception about the experience they will have if they choose to purchase your product or service. The business can positively influence the perceptions of its chosen customer base through strategic promotional activities and by carefully defining your business' marketing mix. | |||||||||
| Effective positioning involves a good understanding of competing products and the benefits that are sought by your target market. It also requires you to identify a differential advantage with which it will deliver the required benefits to the market effectively against the competition. Business should aim to define themselves in the eyes of their customers in regards to their competition. | |||||||||
| Build your marketing plan | |||||||||
| Market Analysis | |||||||||
| Q1.Identify and describe the various market segments. Give answer | |||||||||
| Q2.Will you be targeting a business market, consumer market, or both? Give answer | |||||||||
| Q3.Will the target market be local, national, international, or a mix? Give answer | |||||||||
| Q4.Describe the types of people you want to reach. Give answer | |||||||||
| Q5.What role do they play in the decision making process? Give answer | |||||||||
| Q6.What factors stimulate and influence their buying patterns? Give answer | |||||||||
| Q7.Will your product/service meet the needs of the target market? If so, how? Give answer | |||||||||
| Q8.Describe your strategy for approaching the target market. Give answer | |||||||||
| Q9.What is the positioning strategy for your product/service? Give answer | |||||||||
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| Differentiation | |||||||||
| Watch Video | |||||||||
| Listen to Audio | |||||||||
| The process of developing business, product and service differentiation is important as it allows you to set yourself apart from the rest of the market. This can be particularly important where an extremely competitive market exists or where there are a limited number of customers to sell to. | |||||||||
| In order to differentiate yourself from the competition, you need to conduct market analysis into both what the main players in the market are doing, as well as what you could do differently. You then need to develop a strategy that takes both of these factors into consideration. | |||||||||
| Differentiating your business from your competitors is an ongoing process. You may be able to be innovative and provide products and services beyond what your competition can initially, however, the competition will soon catch up. A business needs to be able to develop and move forward if it wants to stay ahead of its competitors for a sustained period of time. | |||||||||
| Another method of differentiation is to provide a product or service that is | |||||||||
| different and innovative or simply of better quality or value. It is very difficult to differentiate certain products as there is often little opportunity for variation. There are a range of factors that you can use to differentiate a product or service including performance, style, design, functionality, quality, value, reliability and durability. | |||||||||
| While differentiation can be a useful tool to separate one business from another, it is important to keep in mind that customers generally don't like something different for the sake of it. There is no point in changing your business if the sole reason you are doing it is to differentiate yourself from the rest of the market. You need to ensure that what you offer is in some way better than what the competition provides. | |||||||||
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| Watch Video | |||||||||
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| Forecasting is the process of estimating future demand by anticipating what customers are likely to do given a certain set of conditions. Forecasting can give you an advantage over your competitors during periods of market change. | |||||||||
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| Unfortunately, very few products, services, industries or markets are easy to forecast. This is because very few markets follow consistent cycles and there are a range of external and environmental factors that can cause changes to market demand. The more unstable the market, the better your forecasting will need to be. | |||||||||
| The way to counter this is to have projections for a range of different circumstances. These projections can be based on indicators such as interest rates, inflation, market trends, changing consumer tastes and unemployment. Therefore, you can plan for and have strategies prepared to either survive tough times or be aggressive and increase your market share. | |||||||||
| The benefits of conducting realistic forecasting are that you can reduce surplus inventory whilst ensuring that you have enough stock to meet demand. This means that you can avoid the costs associated with having excess or wasted stock as well as capitalise on making as many sales as possible. | |||||||||
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Customer Loyalty
Forget about customer relationship management software, customer loyalty programs and cards.
Customer loyalty can't be bought. It must be earned. Learn the 8 ways your small business can
earn customer loyalty.
There is no shortage of lip service in corporate America these days about customer loyalty.
The advent of the loyalty movement began in the 80's in the airline industry and expanded to
cover every major industry. Research firm Gartner estimates American businesses spent more
than 1 billion dollars on loyalty programs in the year 2003. Over 75% of consumers have at least
one loyalty card, according to Jupiter Research. My wallet alone has 12 loyalty cards. But does it pay?
Does Customer Loyalty Pay?
A mere 5 % increase in customer retention can result in a 75% increase in customer value according to
Fred Reichheld, author of "Loyalty Rules". A great reason to pay attention to loyalty
Here are more benefits:
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· grab more sales from existing customer base
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· helps spread word of mouth marketing
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· identify product/service problems earlier
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· improve profitability
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· provide a competitive advantage
Defining Customer Loyalty
Customer loyalty is the practice of finding, attracting, and retaining your customers who regularly
purchase from you. Customer loyalty is not customer satisfaction. Customer satisfaction is the basic
entry point of good business practices. Your small business should provide satisfaction to all your
customers.
Loyalty cards and programs have their rewards and pitfalls. Rewarding customers for spending
more dollars can create a vicious cycle of creating customers who want rewards and will look
anywhere to obtain them. With loyalty cards and programs reaching a saturation point, how can a small
business stand out?
Software, card programs, and loyalty schemes are the tools of customer loyalty programs but they
aren't the essence of loyalty. To build loyalty, you must earn it. Look at these 8 ways to earn more customer
loyalty for your small business:
8 Ways for Small Business to Earn Customer Loyalty
Company Loyalty First: Customer loyalty is a 2-way street. How can you expect customer loyalty
if you don't practice company loyalty? Are you loyal to your best customers or are you giving discounts
and extra attention to new customers?
Loyalty is about being fanatical with devotion to your best customers.
Employee Loyalty Second: Any customer loyalty program must factor in the front line of the
business. It's the point of contact between customer and employee that sets the foundation of repeat
business. "Hire for attitude, train for skill.
Hire nice people. As a customer, I'm always amazed when small businesses put unfriendly, surly
people in front of their customers. Loyalty is often the direct result of the relationships your employees
build and maintain," says Ben McConnell of marketing consulting firm Wabash & Lake and co-author
of "Creating Customer Evangelists."
Quench the Thirst: Consumers are thirsty for trust following corporate scandals and the general
distrust of corporations.
If your small business is not trustworthy, your odds of establishing customer loyalty are diminished.
Establish good business ethics and practices.
Finding Loyalty: Any small business wishing to start a customer loyalty initiative needs first to identify
important customers and understand their customer's behaviours. Use whatever tools, software, and data-mining
techniques to locate your repeat, regular customers. Equally vital is to know your profit margins. Don't
offer discounts until you know the impact on your bottom line.
Reward Customer Retention: The key metric to track in your customer loyalty program is customer
retention. How many customers are defecting? How many clients are retained? Measuring customer
retention is half the battle. Your staff must be rewarded for retention. Your small business doesn't have
to be like big corporations who talk retention but reward sales people for bringing in new customers only.
Use Customer-centric Language: It's easy to think you put the customer first. However, take a closer look
at your marketing communications. How many times does your literature refer to "we" the company versus
"you" the customer? Go back and speak from the customer's perspective.
Bolster Customer Communications: Part of customer loyalty and retention are maintaining regular
contact with your most profitable customers. Communication to your best customers should take the
form of showing your appreciation and providing new learning experiences to add value to your customer's life.
Send special thank-you notes, surprise gifts, and regular communications such as newsletters to connect with them.
Use the Small Business Advantage: Small business will always have the advantage in connecting with
customers and building a solid relationship. Your passion for helping customers with your products and
services is difficult for large companies to replicate.
As customer evangelist guru Ben McConnell states, "Small businesses thrive on outstanding customer
loyalty. It's their currency of growth and their best differentiator. Without loyalty, small businesses are destined to
compete on a playing field with larger competitors where they are outnumbered and outwitted."
Win the customer service game by putting customer loyalty to work in your small business. Just remember,
it's more than cards and software. It's more about earning trust and relationship building.