To succeed, entrepreneurs must attract and retain a growing base of satisfied customers. Marketing programs, though widely varied, are all aimed at convincing people to try out or keep using particular products or services. Business owners should carefully plan their marketing strategies and performance to keep their market presence strong based on the following:
1. All company policies and activities should be directed toward satisfying customer needs.
2. Profitable sales volume is more important than maximum sales volume.
To best use these principles, a small business should:
• Determine the needs of their customers through market research
• Analyze their competitive advantages to develop a market strategy
• Select specific markets to serve by target marketing
• Determine how to satisfy customer needs by identifying a market mix
Successful marketing requires timely and relevant market information. An inexpensive research program, based on questionnaires given to current or prospective customers, can often uncover dissatisfaction or possible new products or services.
Market research will also identify trends that affect sales and profitability. Population shifts, legal developments, and the local economic situation should be monitored to quickly identify problems and opportunities. It is also important to keep up with competitors' market strategies.
A marketing strategy identifies customer groups which a particular business can better serve than its target competitors, and tailors product offerings, prices, distribution, promotional efforts, and services toward those market segments. Ideally, the strategy should address unmet customer needs that offer adequate potential profitability. A good strategy helps a business focus on the target markets it can serve best.
Owners of small businesses usually have limited resources to spend on marketing. Concentrating their efforts on one or a few key market segments — target marketing — gets the most return from small investments. There are two methods used to segment a market:
1. Geographical segmentation — To specialize in serving the needs of customers in a particular geographical area. For example, a neighborhood convenience store may send advertisements only to people living within one-half mile of the store.
2. Customer segmentation — To identify those people most likely to buy the product or service and targeting those groups.
Every marketing program contains four key components:
1. Products and Services
2. Promotion
3. Distribution
4. Pricing
These are combined into an overall marketing program.
Products and Services — Product strategies may include concentrating on a narrow product line, developing a highly specialized product or service, or providing a product-service package containing unusually high-quality service.
Promotion — Promotion strategies include advertising and direct customer interaction. Good salesmanship is essential for small businesses because of their limited ability to spend on advertising.
Price — The right price is crucial for maximizing total revenue. Generally, higher prices mean lower volume and vice-versa; however, small businesses can often command higher prices because of their personalized service.
Distribution — The manufacturer and wholesaler must decide how to distribute their products. Working through established distributors or manufacturers' agents generally is easiest for small manufacturers. Small retailers should consider cost and traffic flow in site selection, especially since advertising and rent can be reciprocal: A low-cost, low-traffic location means spending more on advertising to build traffic.
The nature of the product or service is also important in siting decisions. If purchases are based largely on impulse, then high traffic and visibility are critical. On the other hand, location is less a concern for products or services that customers are willing to go out of their way to find. The recent availability of highly segmented mailing lists, purchased from list brokers, magazines, or other companies, has enabled certain small businesses to operate from any location yet serve national or international markets.
Thursday, December 17, 2009
Marketing for Small Business
To succeed, entrepreneurs must attract and retain a growing base of satisfied customers. Marketing programs, though widely varied, are all aimed at convincing people to try out or keep using particular products or services. Business owners should carefully plan their marketing strategies and performance to keep their market presence strong based on the following:
1. All company policies and activities should be directed toward satisfying customer needs.
2. Profitable sales volume is more important than maximum sales volume.
To best use these principles, a small business should:
• Determine the needs of their customers through market research
• Analyze their competitive advantages to develop a market strategy
• Select specific markets to serve by target marketing
• Determine how to satisfy customer needs by identifying a market mix
Successful marketing requires timely and relevant market information. An inexpensive research program, based on questionnaires given to current or prospective customers, can often uncover dissatisfaction or possible new products or services.
Market research will also identify trends that affect sales and profitability. Population shifts, legal developments, and the local economic situation should be monitored to quickly identify problems and opportunities. It is also important to keep up with competitors' market strategies.
A marketing strategy identifies customer groups which a particular business can better serve than its target competitors, and tailors product offerings, prices, distribution, promotional efforts, and services toward those market segments. Ideally, the strategy should address unmet customer needs that offer adequate potential profitability. A good strategy helps a business focus on the target markets it can serve best.
Owners of small businesses usually have limited resources to spend on marketing. Concentrating their efforts on one or a few key market segments — target marketing — gets the most return from small investments. There are two methods used to segment a market:
1. Geographical segmentation — To specialize in serving the needs of customers in a particular geographical area. For example, a neighborhood convenience store may send advertisements only to people living within one-half mile of the store.
2. Customer segmentation — To identify those people most likely to buy the product or service and targeting those groups.
Every marketing program contains four key components:
1. Products and Services
2. Promotion
3. Distribution
4. Pricing
These are combined into an overall marketing program.
Products and Services — Product strategies may include concentrating on a narrow product line, developing a highly specialized product or service, or providing a product-service package containing unusually high-quality service.
Promotion — Promotion strategies include advertising and direct customer interaction. Good salesmanship is essential for small businesses because of their limited ability to spend on advertising.
Price — The right price is crucial for maximizing total revenue. Generally, higher prices mean lower volume and vice-versa; however, small businesses can often command higher prices because of their personalized service.
Distribution — The manufacturer and wholesaler must decide how to distribute their products. Working through established distributors or manufacturers' agents generally is easiest for small manufacturers. Small retailers should consider cost and traffic flow in site selection, especially since advertising and rent can be reciprocal: A low-cost, low-traffic location means spending more on advertising to build traffic.
The nature of the product or service is also important in siting decisions. If purchases are based largely on impulse, then high traffic and visibility are critical. On the other hand, location is less a concern for products or services that customers are willing to go out of their way to find. The recent availability of highly segmented mailing lists, purchased from list brokers, magazines, or other companies, has enabled certain small businesses to operate from any location yet serve national or international markets.
Monday, December 14, 2009
The End Of Advertising As We Know It
The next five years will hold more change for the advertising industry than the previous 50 did. Traditional advertising players - broadcasters, distributors and advertising agencies – will need innovative new approaches to respond to major industry shifts underway, according to “The end of advertising as we know it”, IBM global surveys of more than 2,400 consumers and 80 advertising experts.
Imagine an advertising world where spending on interactive, one-to-one advertising formats surpasses traditional, one-to-many advertising vehicles, and a significant share of ad space is sold through auctions and exchanges. Advertisers know who viewed and acted on an ad, and pay based on real impact rather than estimated “impressions.” Consumers self-select which ads they watch and share preferred ads with peers. User-generated advertising is as prevalent (and appealing) as agency-created spots.
The surveys point to four change drivers shifting control within the ad industry:
1. Attention – Consumers are increasingly in control of how they view, interact with and filter advertising in a multichannel world.
2. Creativity – Thanks to technology, the rising popularity of user-generated and peer-delivered content, and new ad revenue-sharing models (e.g., YouTube, Crackle, Current TV), amateurs and semi- professionals are now creating lower-cost advertising content.
3. Measurement – Advertisers are demanding more individual-specific and involvement- based measurements, putting pressure on the traditional mass-market model.
4. Advertising inventories – Will be bought and sold through efficient exchanges, bypassing traditional intermediaries.
As the advertising value chain reconfigures, broadcasters, advertising agencies and media distributors will need to innovate in three key areas:
1. Consumer: Drive greater creativity around traditional ads, while also pursuing new ad formats across media devices to attract and retain customers.
2. Business model: Pioneer changes in how advertising is sold, the structure and forms of partnerships, revenue models, advertising formats and reporting metrics.
3. Business design: Support consumer and business model innovation through redesigned organizational and operating capabilities across the advertising lifecycle – consumer analytics, channel planning, buying/selling, creation, delivery, and impact reporting.
There is no question that the future of advertising will look radically different from its past. The push for control of attention, creativity, measurements and inventory will reshape the advertising value chain and shift the balance of power.
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