Marketing – Don’t Overlook the Basics Guest Post By Carlos H Giraldo
According to Wikipedia, marketing “is the process of communicating the value of a product or service to customers, for the purpose of selling that product or service.” The American Marketing Association offers a narrower definition: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”
Heck, either definition could make anyone cringe and definitely want a person who has not been exposed to the concept run under the covers.
This article explores in real simple terms how to compose a marketing plan.
It all starts with expectations. This is your goal or goals. Whether is a new service or product you want to sell or maybe you want to expand your market share or territory, it begins with the question – what am I trying to achieve? Hopefully, you have assigned a dollar amount to your dream because your success will undoubtedly be measured in the almighty dollar.
Your expectation or goal could be expressed as follows:
Expand sales of the Widget Company Brand A to the west end of the county in the next 2 years and gain an annual increase of $50,000 in sales.
Your expectation or goal is just that – a belief which somehow needs to be backed up with actual data. If you are a new entity, it is more difficult to determine the true numbers because you do not have historical (real) data to back them. You have to rely on industry standards. This includes your potential customer’s profile (likes, dislikes, buying pattern, etc.)
Typically your research should answer questions on the number of potential customers based on a customer profile, what other competitors are offering the same product or service, how other competitors are pricing identical products or services, how you can deliver your service or product to the potential customers and how fast you can deliver it to them.
Note: This is the area to spend the most time on. Take your time to do this. It seems the more you dig into answering the key questions (outlined above) the more you discover things that you originally didn’t take into account. This period of “discovery” also helps you prepare mentally for the final route you choose to take you to your goal.
After you’ve dotted the i’s and crossed the t’s on research, you can write a statement as follows:
The buyers of Brand A are typically senior citizens (age 55+) with females leading males 2 to 1 in purchases over the course of the year. There are 22,000 senior citizens in the west county area. Eighty five percent of purchases are done at either supermarkets or grocery stores with the balance at convenience stores. Two competitors, Brand A and Brand B are sold in this area with Brand A commanding sales in supermarkets and grocery stores at $55 while Brand B sells most in convenience stores at $57. The county has a total of 5 major supermarkets, 10 grocery stores and 15 convenience stores. Both markets can be served easily by Widget because of proximity to all stores and priced competitively.
Pricing is a bit tricky and it depends on several factors. Here you have to ask yourself a variety of questions and unfortunately you have to make some hard decisions as to which way you want to go.
So here it is.
If you want to gobble up market share your price has to beat the competitors by a healthy margin. The margin is determined by the profile of the consumer. For example, since you are targeting senior citizens (fixed income coming from savings and/or social security) a healthy margin could be just a few cents difference. This group of consumers is typically “penny pinchers” and would purchase a different brand if given the opportunity of saving. There are many ways of achieving this by having a variety of promotions which I’ll discuss later. This course of action may not give you the gross profit you may have expected but if your plan is spot on, you may make it up in volume.
If you want to want to sell at a higher price than your competitors, then you need to make your product or service in the eyes of the consumer a heck of a lot better than theirs. This is a tough approach becomes it means that you have to spend more time and money differentiating your product or service. You will also need a plan on defending your position. If successful, the profit margins will be higher and the share of the market you carve out will be loyal to your product or service.
Whichever path you take in pricing, you must communicate the value of your product or service to the consumers you want to sell to. The words that come to mind when communicating value are reliability, efficiency, practicality, etc. The consumer needs to be told that he/she is making the right decision in spending X amount to purchase your product or service. The decision is almost always based on whether the product or service delivers what it says it will do for them.
It’s best to take the high road here and communicate in plain, truthful terms exactly what the product or service will do and not use confusing or untruthful language. Although the purpose is selling, the ideal is to provide superior customer value.
Here is an example of communicating value in a product or a service.
Brand A is the number one recommended product by personal physicians in the X County for the past 5 years. Combined with a healthy diet and regular exercise, brand x will boost your energy level. Brand A does not replace vitamins or any other medicine recommended by your doctor and should be taken in recommended doses
Promote, Promote, Promote
Promotion comes in many different flavors and I recommend choosing more than one to communicate the value of your service or product. One flavor is just plain boring and quite truthfully, ineffective. Naturally, the extent of the promotions is dependent on a budget which is an entirely different topic. The point is that no matter how low the budget is it is important that you do a combination of sales, publicity and advertising. Here is an example of a promotion campaign which Brand A may conduct in the region it wants to expand sales.
Sales – Sales reps visit all personal physicians in the targeted area and leave samples; all supermarkets, grocery stores and convenience stores are visited to gain shelf space next to where vitamins are placed
Publicity – Senior citizen groups, senior centers, and all other not-for-profit organizations with large number of senior citizen volunteers are targeted for presentations on Brand A; several articles submitted on the benefits of Brand A to local newspapers; radio personalities with talk shows on health with audiences in the targeted area contacted for potential interviews; table presentations at local chamber of commerce or merchant association home shows
Advertising – Local radio, newspaper, penny saver and discount coupon books
The combined effect is powerful and the payoff is the final and the most powerful “flavor” – worth of mouth. In marketing we give it a fancy name – critical mass. You are at the summit, everything is working in sync. The doctors ask your sales people to come back with more samples, the stores call you because they have given you more shelf space and of course they want more Brand A, senior centers call you for more presentations and you’ve been contacted by TV stations to run a story on Brand A. Of course, there is a back log on Brand A and you are frantically pressing the laboratory for supplies. Sweet!