One of the greatest needs
of managers of business is to understand and develop marketing programs for
their products and services. Business success is based on the ability to build
a growing body of satisfied customers. Modern marketing programs are built
around the "marketing concept," which directs managers to focus their
efforts on identifying and satisfying customer needs - at a profit.
Marketing continues to be a
mystery . . . to those who create it and to those who sponsor it. Often, the ad
that generates record-breaking volume for a retail store one month is repeated
the following month and bombs. A campaign designed by the best ad agency may
elicit a mediocre response. The same item sells like hotcakes after a 30-word
classified ad, with abominable grammar, appears on page 35 of an all-advertising shopper tossed on the front stoops of homes
during a rainstorm! The mystery eludes solution but demands attention.
Your marketing results can
be improved through a better understanding of your customers. This approach
usually is referred to as the marketing concept.
Putting the customer first
is probably the most popular phrase used by firms ranging from giant
conglomerates to the corner barber shop, but the sloganizing
is often just lip service. The business continues to operate under the classic
approach - "Come buy this great product we have created or this fantastic
service we are offering." The giveaway, of course, is the word we. In
other words, most business activities, including advertising, are dedicated to
solving the firm's problems. Success, however, is more likely if you dedicate
your activities exclusively to solving your customer's problems.
Any marketing program has a
better chance of being productive if it is timed, designed and written to solve
a problem for potential customers and is carried out in a way that the customer
understands and trusts. The pages that follow will present the marketing
concept of putting the customer first. Marketing is a very complex subject; it
deals with all the steps between determining customer needs and supplying them
at a profit.
The Marketing Concept
The marketing concept rests
on the importance of customers to a firm and states that:
To use the marketing
concept, businesses should:
Market Research
In order to manage the
marketing function successfully, good information about the market is
necessary. Frequently, a small market research program, based on a
questionnaire given to present customers and/or prospective customers, can
disclose problems and areas of dissatisfaction that can be easily remedied, or
new products or services that could be offered successfully.
Marketing Strategy
Marketing strategy
encompasses identifying customer groups (Target Markets), which a small
business can serve better than its larger competitors, and tailoring its
product offerings, prices, distribution, promotional efforts and services
towards that particular market segment (Managing the Market Mix). A good
strategy implies that a business cannot be all things to all people and must
analyze its markets and its own capabilities so as to focus on a target market
it can serve best.
Target Marketing
Owners of small businesses
have limited resources to spend on marketing activities. Concentrating their
marketing efforts on one or a few key market segments is the basis of target
marketing. The major ways to segment a market are:
Managing the Market Mix
There are four key
marketing decision areas in a marketing program. They are:
The marketing mix is used
to describe how owner-managers combine these four areas into an overall
marketing program.
Products and Services
Effective product
strategies for a business may include concentrating on a narrow product line,
developing a highly specialized product containing an unusual amount of
service.
Promotion
This marketing decision
area includes advertising, salesmanship and other promotional activities. In
general, high quality salesmanship is a must for small businesses due to their
limited ability to advertise heavily. Good yellow-page advertising is a must
for small retailers. Direct mail is an effective, low-cost medium of advertising
available to small businesses.
price
Determining price levels
and/or pricing policies (including credit policy) is the major factor affecting
total revenue. Generally, higher prices mean lower volume and vice-versa, however, small businesses can often command higher
prices due to the personalized service they can offer.
Distribution
The manufacturer and
wholesaler must decide how to distribute their products. Working through
established distributors or manufacturers' agents generally is most feasible
for small manufacturers. retailers should consider
cost and traffic flow as two major factors in location site selection,
especially since advertising and rent can be reciprocal. In other words,
low-cost, low-traffic location means you must spend more on advertising to
build traffic.
Marketing Performance
After marketing program
decisions are made, owner-managers need to evaluate how well decisions have
turned out. Standards of performance need to be set up so results can be
evaluated against them. Sound data on industry norms and past performance
provide the basis for comparing against present performance.
Owner-managers should audit
their company's performance at least quarterly. The key questions to ask are:
Ken Roys, CEO
BTF Management Consultants Inc
866-385-1900 Toll Free 713-983-7904 Fax
Ken.Roys@btfmanagement.com
www.btfmanagement.com