Marketing

Building a strong foundation for success

Discussion Questions

What is marketing?

How is marketing different from sales?

Definitions

Marketing is generating leads for sales Sales is turning leads into customers

Marketing Questions

Who is your customer? Who is your competition? What is your environment? Where will you locate? What will you charge? How will you sell/distribute?

The Marketing Triangle

Customer

You Competition

Market demand | Pricing | Distribution | Publicity | Location

Your Customer

Who is your current customer Who is your ideal customer Where is your customer When does he/she buy How many customers are there

Your Environment

What is the demand/need for your P/S? How established is your market? How saturated is your market? What are the barriers to entry? What seasonality issues exist? How price sensitive is your market? What are the market trends?

Know thy Customer

Your customers are your best source of market research. Learn everything you can about them and record it. Then …

Segment – Segment - Segment

Segment your market

Demographics

Age

Sex

Education

Income

Race

Marital status

Location

Car/house owner

Psychographics

Life style choices

Personal interests

Likes and dislikes

Magazine readership

Travel interests

Hobbies

Health

Fashion preference

Biz to Biz

NAICS / SIC

Number of employees

Type of business

Annual Income

Public/private

Job title

North American Industry Classification System (NAICS)

Replaced the Standard Industrial Classification System (SIC Codes)

Developed by US, Canada, and Mexico Fore example: 236118 Residential

Remodelers North American Product Classification Syste

m

Customer Database

Build a database of all your customers Record every phone call Record every transaction Record profile and segment data Differentiate them by needs and value Rank by frequency and money spent

Customer Profitability

Not all customers are equal Some are a pain-in-the-neck Some are expensive And some are highly profitable

Choose your customers wisely!

Discussion Question

What is competitive analysis?

Competitive Analysis

Who are they? Where are they? How many are there? What are their strengths and weaknesses? Why you and not them - differentiation? Who are their customers? What are the barriers to entry? What do they charge?

Discussion Question

Where do you get competitor information?

Sources of competitor information

Internet Yellow Pages Personal visits to offices and facilities Advertising Customers – past and current Speeches and presentations Tradeshows and professional conferences Articles in newspapers and magazines Market research firms Company brochures Computer databases like Dun and Bradstreet Libraries

Competitive Analysis Grid

You Comp1 Comp1 Comp3

Annual Sales

Employees

Web Page

Price

Strengths

Weaknesses

Competitive Space Analysis

Strong

Weak

Feature BWeak Strong

Feature A

Sailboat Rigger

Strong

Weak

Cruising (offshore)(vs. Racing)

Weak Strong

Traditional Boats

( vs. Modern)

Sailboat Rigger

Discussion Question

How do you set a price for your product or service?

Setting your Pricing

Comparables / Competition Value to customer Breakeven analysis Desired profit margin Market differentiation Price versus volume Price versus quality

Price versus Volume

Low Volume High Volume

Low

PriceDEATH Very Difficult

High

Price

Sweet spot for

Small Business

High distribution

And support cost

Price versus Quality

Low Quality High Quality

Low

Price

Economy

Difficult

Penetration

Difficult long term

High

Price

Skimming

Doomed

Premium

Ideal for Small Biz

Price versus Quality

Discussion Question

How will you become known

to your customers?

Exposure/Promotion Alternatives

Word of mouth - viral Web page – number one Business Cards – a must, simple, web address Signs – shop, auto, anywhere you can Brochures – may only need the internet Direct mail – better, more targeted, expensive Door-to-door – in certain situations Advertising – expensive, difficult to measure

If must advertise…

Two most important words:

Testing Repetition

Free Publicity

Notoriety, word of mouth, reputation Articles by or about you Press releases PSA (Public Service Announcements) Seminars/lectures/demonstrations Referrals/rumors/epidemics Trade associations

Trade Associations

Join your trade association Take a leadership position Subscribe to professional magazines Speak at conferences Write articles

Tipping Point - Gladwell

Successful marketing is like a contagious disease – An epidemic

Law of the Few Changes/growth happens fast Power of Context

Branding and Image

Business name Dress/uniforms/appearance Logo Slogans Office/store front/location

Discussion Question

What makes a good name?

Business Name “…ables”

Expandable/Scaleable – grow with business Web-able – works web address and for email Memorable – does not have to be descriptive Saleable – adds value when you sell

business Understandable – easy to say, spell,

pronounce, remember, unique Applicable - appropriate for business type

Use of Personal Names

Lawyers Doctors Consultants Engineers Contractors Designers

Pros ConsBuilds prof repTraditionalEgo gratifying

Limiting in Scope

You may not want to sell it

Diff to spell or pronounce

Too commonProb w star

empl

Web Names – Phone number of the future

Memorable Short - less than 10 char Easy to type and use with email (avoid spec char) URL – Universal Record Locator TLD, ccTLD (.com, .biz, .net, .bz, .info)

– Like an area code or file extension– Biz will be the com of the future

Test/buy similar and obvious names Use for signage, advertising, email Relate to company

Web Site – An absolute must!

On-line brochure Integrate into your business Viral marketing Easy to navigate Order processing Physical appearance

– Keep it simple– Fit the screen– Fit the page– Sell gently– Minimize the menu items

Homework

Write the marketing section of your business plan– Describe your ideal customer– Segment your market– Prepare a competitive analysis grid– How will you price your product or service?– How will you advertise/promote your p/s?– Name a trade or professional organization you can join– Where will you get leads?