Marketing 101d

So far, we’ve discussed two fundamental marketing questions:

- What product or service do we want to sell?
- To whom do we want to sell it (who is our “prime prospect”)?

Now let’s talk about a very powerful marketing tool, price.

Too often we jump to the conclusion that our price has to be lower than the price of our competitors. Not so. Our price has to be seen as a better value than that of our competitors, but that’s not the same thing as cheaper. For instance, if our product is priced 50% higher than that of our competitor but it lasts twice as long, our product is the better value.

But price also has strategic value beyond dollars and cents. Let’s say our company makes razor blades. We can’t sell any razor blades unless our customers have the handle that holds the blades. So we can put a very low price on the handle (or even give it away) because our customer only needs one. But now we have a captive audience that will need to continue buying replacement blades for a lifetime.

Pricing has great impact on the way we offer our product or service. Maybe our competitor “bundles” the products or services we both offer . . . that is, products A, B, and C come as a set. To buy one, you have to buy them all. Our response might be to offer those products a la carte . . . you can buy one individually or in any combination you want. In similar fashion, our competitor might sell his product in packages of 10. So we might appeal to smaller users with a package of 5 or to larger users with a package of 20.

The list of pricing strategies is endless. But price (and all other marketing considerations, for that matter) needs to be set so that our sales force can sell the way our customers want to buy.

In the last several postings, we have barely scratched the surface of marketing, and there is certainly a lot more to it than the few points we have discussed. For a more in depth view of marketing, pick up a copy of “Duct Tape Marketing” by John Jantsch or “Meatball Sundae” by Seth Godin. Both are excellent books and both are aimed at small businesses who need to practice sound marketing on a limited budget.

For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.

Marketing 101c

This is the third installment in a series of basic marketing concepts. First we described what marketing is, and what it is not. Then we talked about the problem your service or product will solve, the need it will fill, or the want it will satisfy. Now we need to talk about the “who” in the marketing equation.

Who has this problem to be solved, need to be filled, or want to be satisfied? No product has universal appeal, so we need to understand who our prime prospect (ideal customer) is. Here are some things to consider as you think about who you are trying to serve.

● Are there geographic limitations? Maybe your product or service only has value within a certain geographic area. Or you might be limited by distance. A local plumbing contractor, for example, may only be able to effectively serve customers within a 20-mile radius of his shop.

● Are there ethnic or cultural factors to be considered? Some foods, for instance, might be very popular in one culture, completely unacceptable in another.

● What about age? Does our product or service appeal equally to a 15-year old and a 55-year old?

● How about gender? Does our product or service appeal equally to men and women?

● What are my prime prospects willing to pay for my product or service?

The list goes on and on, but you get the idea. You need to know as much as possible about your prime prospects . . . who they are, where they are, what they like and don’t like, how they behave, and how they make buying decisions. And once you know everything there is to know about your ideal customer, the final key question is: are there enough of them to support my product or service?

Understanding everything you can about your ideal customer is critical. If you don’t have a clear picture of who they are, how can you reach them? How can you attract their attention? How can you tell them your product or service even exists? You can’t. So like many aspects of marketing, this may take some time, effort, and maybe money to research, but it’s worth it. Any resources spent here are miniscule compared to the expense of launching a product or service that misses the mark and ultimately fails.

For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.

Marketing 101b

This is the second installment of a series on marketing. The first installment set the groundwork by defining what marketing is . . . and what it is not. Now we’ll dig a little deeper into some of the major components of marketing.

The foundational question for marketing is, “What product or service do we intend to offer to the marketplace?” Our product or service must solve a problem, address a need, or satisfy a want. The only reason consumers buy anything is to solve problems, address needs, or satisfy wants. So if our product or service can’t do one of those three things, we won’t have any buyers.

For instance, let’s say we want to open a restaurant. Since we’re Greek, we’ll open a Greek restaurant. There’s a large Greek population nearby and our friends all tell us we create superb Greek dishes. So the “want” we’re going to satisfy is the want for really good Greek cuisine. But wait, there are already ten Greek restaurants in the area and they all provide really good Greek cuisine. Now the question is, does the market really want an eleventh Greek restaurant? And if so, what “want” does the market expect the eleventh restaurant to satisfy that isn’t already being satisfied by the other ten.

We’ll talk about differentiating yourself from your competitors later, but for now, focus on the problem you expect to solve, the need you plan to address, or the want you intend to satisfy. This may take some market research but it’s well worth some time, effort, and even expense to get this part right, because if we get it wrong, our product or service won’t even make it out of the starting gate.

For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.

Marketing 101a

This begins a series on marketing. I’ll dispense with the quotes I usually use because I couldn’t find any that I thought were appropriate for this discussion. If you consider yourself to be a pretty savvy marketer, this may be too elementary for you, but for everyone else, read on.

Many small business people are unsure what marketing really is. Everybody engages in marketing or they couldn’t be in business. But often, marketing activities are not done in a systematic, coordinated, strategic way. So let’s begin by talking about what marketing is . . . and what it is not.

Small business people sometimes use the terms “marketing” and “sales” interchangeably as though they are two different names for the same thing. They are not. Sales and marketing are entirely different activities. A friend of mine says it this way: “The job of marketing is to deliver customers for the sales force to sell.” That’s a pretty good definition, I think.

In order to deliver customers that our sales force can sell, marketing must answer a number of fundamental but critically important questions.

- What product or service do we want the sales force to sell?
- What problem will our offering solve, what need will it fill, or what want will it satisfy?
- Who is our prime prospect (the ideal customer who has the problem, need, or want we’ve identified)?
- How do we intend to deliver our product or service? Through retail channels? Via the internet? Through distributors and wholesalers?
- Where should we set our price? That is, what is our prime prospect willing to pay for our product or service?
- Who else is already in the marketplace selling a similar product or service, and how will we differentiate ourselves from them?

The list goes on, but you get the idea. Marketing is the highest strategic activity in any company because if we get marketing wrong, it doesn’t matter how strong we are financially, how efficient we are operationally, or what a great sales force we have. If marketing is wrong, we can’t survive as a company. If we offer a product or service that doesn’t address the problem or need or want it was intended to, we won’t be able to sell it. If we offer it at too high a price, we won’t be able to sell it. In short, marketing will have failed in its mission to deliver customers.

OK, so now we know what marketing is and what it’s supposed to do. In the next few postings, we’ll explore in more detail some of the questions above that marketing needs to answer correctly.

For more small business blogs, visit my website at www.rocksolidbizdevelopment.com