MARKETING

Understanding Buyer Persona For Marketing Success

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buyer persona

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You frequently read about buyer persona.  Many marketing practitioners consider it crucial in their marketing campaigns.  Some, however, are not so sure what it exactly means while others, at worst, simply ignore it.

Let us try to come up with a simple understanding of buyer persona.

 

What is a buyer persona?

There are many definitions by experts but let us describe one that is adequate enough.

A buyer persona is a hypothetical representation of the ideal customer embodying the target market’s most critical, relevant, and common demographic and psychographic characteristics, and how these influence their perception of a value proposition that consequently results in either a positive or negative consideration.

The characteristics mentioned above are derived from the evaluation of data from research and information gathered from actual current market experience.

 

Why is it important in marketing?

A buyer persona that is detailed and specific enough can help your marketing team to have a clear target to focus on.

Without a clear target, you have nothing to aim at in terms of product/service development, pricing, promotion, and distribution strategies.  As we repeatedly mentioned in our previous articles, all strategies should have a clear target or objective.

You develop a product for a specific group of buyers with common and related demographic and psychographic description. You simply cannot offer a product or service that will likely be used by anyone in the market.

You also develop a pricing strategy that will appeal to a certain segment of the market.  Not everyone can afford a product with a high price tag.

Your promotion strategy is likewise targeted at an audience with well defined demographic characteristics as well as behavior, preferences, and decision-making process.

This is similarly the case when it comes to distribution.  Some segments of the market prefer doing purchases in physical stores while others prefer online purchases.

The buyer persona pervades every marketing function. It is an unequivocal insight into how your ideal customer thinks, feels, and acts.

The more buyer persona-driven you are, the bigger your opportunity to provide a better experience along your customer’s purchase journey from being a website or store visitor to a buying customer and to being a loyal brand advocate.

 

How do we create a buyer persona?

Creating a buyer persona is not a one-off process. It is iterative with every cycle strengthening the validation of your buyer persona.  I recommend the following process:

  1. Identify demographic data

What for example are the gender, age bracket, educational attainment, income level, and residential location of your target buyers?

  1. Make a profile of behavior, preferences, and decision-making process

What are their preferences in terms of product features (make, style, or color)?  Do they follow current trends in product choices?  How do they decide to make a purchase – by researching on the internet, asking relatives/friends for recommendations, or do they buy on impulse?

  1. Compile data on reaction and feedback to marketing messages

How do your customers respond to promo campaigns?  Do they ask questions first before making any consideration? What problems or issues do they seek clarification on?  What terms do they use to communicate online or what keywords trigger their clicks to your website?

  1. Analyze and evaluate Items 1 – 3 above

Consolidate your findings, brainstorm on it, and come up with conclusions.

  1. Fine tune your buyer persona and iterate

Tweak your buyer persona, if necessary, and repeat the above process on a regular basis especially after a major marketing campaign.

 

A good marketer cannot simply ignore the buyer persona.  Marketing success depends on how well it is understood.

I welcome your questions, comments, and suggestions.  Or we can also discuss your other business concerns.

MARKETING

Marketing Plan Series (Parts 5, 6, and 7 of 7): Key Performance Indicators, Budget, and Contingency Plan

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To complete your marketing plan, you have to define your key performance indicators, create a marketing budget, and develop a contingency plan.

 

Key performance indicators

Key performance indicators (KPIs) are metrics used to gauge how effective the business is in the execution of its marketing plan.

There are many KPIs you can use depending on your industry, your company, and product/service you offer.  What is important is focusing on the KPIs that really matter in the long run and these are the ones that consistently and progressively contribute to attaining your marketing objectives stated in your marketing strategy.

The most common KPIs are sales, repeat business (or recurring revenue), brand awareness, and market share.

  • Sales

Sales are the most tracked KPI. Sales are monitored according to various key performance areas such as the following:

  • Product/Service groups

Using your furniture marketing business as reference, you may track sales of home and office furniture.  The figures can tell you which contribute more to your revenue and which is more profitable.

  • Home furniture
  • Office furniture

  • Promotion categories

In general, you may monitor sales generated from your offline and online campaigns.  You can further break it down by attributing sales coming from organic and paid campaigns in case of online promotion.

  • Offline
  • Online

  • Distribution categories

For some companies, sales may be recorded based on the distribution channel they use.

  • Direct marketing
  • Channel distribution

  • Repeat business

Recurring business is an important KPI as it indicates consistency in revenue generation, which in turn helps in solidifying the financial viability of your business and gives you a good foundation for your income and cash flow projections.

Going back to your furniture marketing business, repeat sales from your key and major dealers will be the backbone of your business.  You can project these repeat sales to increase progressively as you introduce marketing campaigns to improve business with these regular customers.

  • Brand awareness

One of the primary functions of marketing is to increase brand awareness.  As a business owner and marketer, you always find ways to improve your brand equity.  You want to build a strong brand.

Brand awareness as a KPI is not always easy to measure especially for small business owners.

A progressive increase in sales over a period of time (at least one year) is an indicator.  Attributing growing sales to brand awareness, particularly after a promotion campaign, will require certain tasks like trying to determine through a series of surveys (in-store or online) why customers are buying your product and/or if they have heard of your brand and if they are patronizing it.

  • Market share

Market share as a KPI can be determined through research and analysis of industry data over a period of time (at least one year).

An increasing volume of sales does not necessarily translate into a growing market share.  It could be that your total sales is increasing year by year but your competitors are actually generating a lot more.  Knowing your market share is important for long-term growth as you will know if you are losing or not market opportunities to your competitors.

At the end of each review period (weekly, monthly, quarterly, semestrally, and annually), you analyze results against targets and measures.  Track the metrics regularly and record the findings.

You can determine which action shall have contributed positively to attaining your marketing objectives and which would not. You can then make the necessary iteration and tactical adjustments.

Over an extended period of time, you can determine what really works and what doesn’t.  You can then make a strategic adjustment to improve performance in the long-run. It may include modifications in some key result areas as well as adjustments in your marketing budget.

 

 

Budget

This is the amount of money that you are capable and willing to spend in the process of implementing your marketing plan within a period of one year.  Ideally, this sets your limit to every item of expense you expect to incur.

The total amount of marketing budget usually depends on the type of product/service you are offering, the size and stage of development of your business, and your industry.

Highly competitive or common product/service and relatively new and technical product/service require a bigger marketing budget to promote and build the brand.

A startup company will need a bigger marketing budget to make an initial foothold in a market that is competitive and with well-established players.

What are the usual items included in a marketing budget?  Let us look at the following:

  • Branding

You have to hire a professional or an agency to handle your brand development from creating your brand message, story, collaterals, and communication.

  • Content marketing

You need a content marketer or an agency to formulate and implement your content marketing strategy – from developing content for your website, blogs, social media marketing, email marketing, and marketing collaterals to distributing these contents to reach your target audience.

  • Online advertising and promotion

To create awareness, encourage product/service consideration, and take purchase decision among your potential customers, you need to advertise online via social platforms and search engines.  You need to hire good copywriters, creatives professionals, and online ads specialists to implement online campaigns.

  • Offline advertising and promotion

You may also consider advertising on the traditional broadcast media or non-traditional media. You can also conduct some offline promotions like participation in trade exhibits and events.

There is no standard insofar as determining the total amount of marketing budget is concerned.  For a new company, it may be 15% to 25% of its projected annual revenue. This further depends on the amount of revenue being considered.

 

Contingency plan

While many marketing plans that I have seen usually do not include this, I consider the contingency plan an essential part.

Your contingency plan should highlight any part of your marketing plan that has high-risk potential that may be beyond your control.  It may consider scenarios such as losing your sources of raw materials or supply of your imported products. It can also include probable competitive reactions, like cut-throat pricing, as your marketing plan unfolds in the market.

The contingency plan gives you a foresight of the corresponding action plans to mitigate competitive reaction or consequences of events beyond your control.

 

I always welcome your questions, comments, or suggestions.  Or, we can discuss your other business concerns.

 

MARKETING

Marketing Plan Series (Part 4 of 7): The Distribution Strategy

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The fourth element of the marketing mix is distribution.  In this article, we will look into how the distribution strategy plays a major part in attaining your marketing objectives.

 

What is distribution?

Distribution is the set of different activities that your business undertakes to make your product or service available to your target consumers or business users.

 

What is a distribution strategy?

Distribution strategy is your plan of action directed toward achieving your distribution objectives.

 

What are the factors to consider in crafting a distribution strategy?

In developing your distribution strategy, you have to consider the following major factors:

Distribution objectives

Some of the common distribution objectives are as follows:

  • To reach the greatest number of target consumers/business users;
  • To reach the consumers/business users within the shortest or fastest time frame;
  • To incur the least cost in reaching consumers/business users;

 

Types of consumer/business user

Your distribution strategy is basically determined by the type of target market you have.

If your target market consists of consumers in the middle-income segment, your strategy will be different from that for consumers in the high-income elite group.

A strategy for corporate users within a geographical area that is densely populated with businesses which use your product/service will not be the same as that for businesses that are sparsely situated in a wide geographical area.

Category of product/service

Your distribution strategy is also dictated by the category of product/service you offer.

The strategy for basic commodities (fresh produce, groceries) will be different from that for specialty goods (branded clothes, latest electronic gadgets).

Your strategy for logistics services (trucking, warehousing) will not be the same as that for computer systems (software, hardware).

Market coverage

The strategy for a nationally distributed product will be different from that intended for the international market.

Cost and time

If your product is in a cost-sensitive market, your distribution strategy will call for the most cost-effective distribution structure.

Products with low margins for the mass market will be distributed differently from those for specialty goods with high margins.

The strategy for perishable goods, which are very time-sensitive, will be very different from that of durable goods.

Product volume

The volume of product/service you want to sell influences also your distribution strategy.

  • Mass distribution

If your product (like fast-moving consumer goods) is intended for a broad market, your strategy will consider mass distribution in the most cost-effective manner.

  • Selective distribution

A product that requires added-value at the point of purchase (like new home appliances or gadgets) will need a selective distribution strategy that involves intermediaries which can provide customer servicing.

  • Exclusive distribution

An institutional product (like specialized medical equipment) will need an exclusive distributor not only to handle marketing and sales but also to provide the highly specialized services required in the installation, commissioning, operation, and maintenance of such product.

 

Channels and intermediaries

The distribution strategy is implemented through the use of channels and intermediaries.

Channels

A channel is a group of intermediaries that handle the movement of the product from the manufacturer to the target consumers/business users.

A typical channel may look like this:

Manufacturer ⇒ Importer/Distributor ⇒ Wholesalers ⇒ Retailers

A manufacturer may use a combination or mix of channels in implementing its distribution strategy.  This approach is called multi-channel distribution.

A manufacturer may also do away with intermediaries in its channel by selling directly to its consumers/business users.  This practice is known as direct marketing. A typical example of this is a software developer company selling or giving access to its service (SaaS) to clients via the internet.

The choice of channel is determined by what works best for both the manufacturer and its target consumers/users.

Intermediaries

An intermediary is an independent company or merchant that moves the product from the manufacturer (or another intermediary) to the consumer (or another intermediary).

The most common intermediaries are the following:

  • Distributor

A company that handles the exclusive distribution of a product in a particular geographic market (like a country or region).

They normally maintain an inventory of the product and are required to provide marketing, sales, logistics support, and customer services on behalf of the manufacturer.

They sell to wholesalers or directly to retailers.

  • Wholesaler

A wholesaler typically takes care of a specific sub-segment of a geographic market (like a region).

They are tasked with maintaining an inventory of the product and provide marketing and logistics support in their designated market.

They sell to retailers and also directly to business users or institutional customers.

  • Retailer

Retailers deal directly with the product consumers/end-users.

Aside from generating sales, they are expected to conduct in-store marketing activities like sales promotion.

  • Agent

An agent can be a company, merchant, or an individual whose function is to facilitate sales of goods/services from the manufacturer to other intermediaries.

They do not take title to the goods/service but provides only facilitation services for which they earn commission from the manufacturer.

 

Managing channels of distribution

Of the many diverse activities involved in distribution, managing the channels of distribution is one of the more crucial ones.

This involves selecting, supporting, motivating, and evaluating intermediaries in your channel of distribution.

  • Selecting

Selecting the most suitable intermediaries involves determining their capability and track record in handling products/services that are similar or complementary to your product/service.  It also includes their financial performance and reputation in the trade.

  • Supporting

Supporting your intermediaries includes providing them with an orientation about your company and product/service, marketing and sales training, the needed inventory at the proper time, and other logistical support.  Marketing and logistical support are critical to your intermediaries and your entire distribution channel if they are to move your product/service effectively and efficiently.

  • Motivating

Motivating the intermediaries in your channel of distribution will ensure that they move your product/service in accordance with your marketing objectives.  It usually includes giving a competitive profit margin appropriate to the trade and periodic performance-based incentives.

  • Evaluating

Evaluating your intermediaries periodically will not only improve their individual performance by strengthening any weak area but also enhance the overall performance of your distribution channel by ensuring that you retain only the most capable intermediaries for your business.

 

How a distribution strategy creates competitive advantage

A good distribution strategy creates competitive advantage by creating customer value along the channel of distribution.

The current trend in direct marketing (manufacturer to consumer/end-user) creates value through lower prices and speedier delivery.

Another is manufacturer/importer-distributor to retailers where these retailers provide product demonstration, readily available stocks, and immediate deliveries to customers. This is typical for businesses which offer imported products that require some demonstration of features/functions like your imported furniture business.

 

You have just taken a glimpse of how important distribution strategy is in attaining your marketing objectives.

 

I welcome your questions, comments, and suggestions.  You may also want to know how your other business concerns can be addressed.

 

MARKETING

Marketing Plan Series (Part 3 of 7): The Promotion Strategy

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The third element of the marketing mix is promotion.  We will explore in this article how the promotion strategy contributes to attaining your marketing objectives.

 

What is promotion?

Promotion is any form of marketing communication used to inform or influence a target audience or market.

The subject of a promotion may be a company’s product, service, or concept.  It may also include issues or advocacies of non-business groups.

 

What is a promotion strategy?

Just like the other elements of the marketing mix, you have to develop a strategy for your promotion activities.

Promotion strategy is a plan for what promotional mix you will use to achieve your promotion objectives as well as your overall marketing objectives.

 

What are the usual objectives of a promotion strategy?

You may list specific objectives for various promotion strategies. The most common business objectives include the following:

  • To create awareness for a new product/service
  • To generate interest and induce market demand
  • To influence a target market
  • To encourage potential customers to engage with a brand and make a purchase
  • To boost sales
  • To build and maintain brand reputation

Going back to the furniture marketing business case, you can adopt all of the above objectives.

 

What are the critical elements of a promotion strategy?

An effective promotion strategy has the following basic considerations, which I collectively call the 4Ms:

  • Market

You always start with your target market.  Who they are, where they are, what their needs are, and what they are looking for.

  • Message

You have to communicate a clear and compelling message to your target market.

Your unique selling proposition should be the core of your message.  What makes you different and better than your competitors?  The message has to unequivocally convey your competitive advantage.

  • Media

These are the channels of communication that can deliver your message to your target market.

These are divided into two broad categories, namely:  offline and online media.

  • Money

Obviously, you need money or a budget to run your promotion strategy.  The promotion budget is prepared by the marketing department based on the strategy they have developed.

The promotion budget is normally determined with reference to the product lifecycle.  During a product’s introduction stage, the promotion budget is at its highest level.

The budget is usually expressed as a percentage of projected sales.

 

What are the typical media and communication formats used in a promotional mix?

  • Online promotion

The more widely used method now is the online or digital promotion.

It can reach almost instantly the largest number of potential customers.  It can also reach the widest possible geographical area.

Online promotion can be interactive thus promoting real-time engagement with the target audience/market.

Its results can be monitored in real time thus giving marketers the capability to measure the effectiveness of their promotion and to adjust their strategy accordingly for better results.

Online promotion is more cost-effective and time-efficient.

The frequently used online communication formats are the following:

  • Website
  • Blog
  • Social media
  • Newsletter
  • Advertising
    • Search network
    • Display network
  • Sales promotion
  • PR

 

  • Offline promotion

Offline promotion or the traditional promotion is still actively used by marketers.

It has its own merits.  Not everyone is active online.  There are potential customers who respond well to this type of promotion.

The common drawbacks of offline promotion include being costlier to implement, difficult to target specific segments, and quite tough to monitor its effectiveness in real time.

Some of the familiar offline communication formats include the following:

  • Advertising
    • Traditional (tv, radio, and print)
    • Non-traditional (billboard, transit, poster)
  • Direct marketing (direct mailer, telemarketing)
  • Events marketing (trade show, conference, ground activation)
  • Sales promotion
  • PR and publicity

You can use a combination of the online and offline promotion in your promotional mix.

For your furniture marketing business, I would recommend a mix of website, blog, social media, newsletter, trade show, ground activation, sales promotion, and PR/publicity.  This mix is cost-effective.

 

Whatever your promotion strategy is, it is important to develop it with due consideration of the 4Ms I have discussed above.

 

I welcome your questions, comments, or suggestions.

 

We can also discuss your other business and marketing concerns.

MARKETING

Marketing Plan Series (Part 2 of 7): The Pricing Strategy

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The second element of the marketing mix is pricing.  We stated last week the marketing objectives for the proposed business.  We will discuss in this article the pricing strategy that can contribute to attaining those objectives.

 

Pricing strategy considerations

Businesses have to maximize profits as best as they could. This responsibility falls largely on the marketing team which is tasked with setting the final price for its product/service. Selecting the right pricing strategy directly impacts the profitability and long-term success of the business.

The best strategy is directed at finding the right price point that achieves both the financial objective of maximizing profit and the marketing objectives of gaining, maintaining, and growing sales and market share.

There are many models of pricing strategy. Choosing the right model, or combination of models, to use at various points of the product lifecycle depend on several factors such as the following:

  • Target market

Let us go back to your furniture marketing business.

Market research will show you what price points your customers will likely consider in making a decision to buy your product.

 

  • Positioning strategy

You have positioned your products as high quality imported brands.  In addition to your imported lines, you have developed also a high-quality local brand of furniture to suit the design and material preferences of the local market.

 

  • Competition

Your competition carries also imported brands and they have local brands as well that have very competitive prices.

 

  • Importation/Production costs

The landed costs of your imported furniture are fixed already as you have at least a six-month inventory for your initial launch.  You expect future landed costs to be higher due to the projected value depreciation of your local currency versus the currency of the exporting country.

The production cost of your local lines, for now, is stable.  Barring any unforeseen situation that can adversely affect the cost of the wood raw material, you expect production cost to remain constant for at least a year.

 

  • Marketing cost

This item includes your advertising and promotions costs, distribution costs (from your warehouse to your dealers/corporate clients), and sales costs (salaries, allowances, commissions/incentives of your sales personnel).

Your marketing cost would be relatively higher during the launch phase of your business and in the introduction stage of both your imported and local furniture lines.

 

Knowing the above factors, you are now ready to choose what pricing strategy to use.

 

Pricing strategies

 

There are many specific pricing strategy models used for different categories of product/service and for different markets.  For your furniture business, however, we will confine our discussion to the three most commonly used in the industry as follows:

 

  • Premium pricing

This is used for products with highly unique features that create a clearly significant competitive advantage.

You may consider this pricing model for your imported brands if these products have unique features and benefits.  These products may have technologically advanced materials or may use patented mechanisms, as in the case of office chairs lifting or tilting functions.

You may also use this model for your locally produced dining sets which may come in a variant that uses local hardwood which is highly sought and priced for its sturdiness and exotic wood grain and color.

When you use premium pricing for your unique products, you have to level up also the other elements of your marketing mix.

Your promotions and advertising messages should create a perception among customers that you are offering premium products with features clearly superior to competing products.

Your products should be available and attractively displayed in high-end furniture outlets.

 

  • Price skimming

High pricing is used during the launch phase and eventually reduced as you lose your competitive advantage due to new entrants in the market.

When competition gains access to imported furniture (other brands) with features similar to those products you initially launched and offers these competing products at lower prices, you consequently have to lower your prices to match competition and to prevent losing a sizeable market share.

Before competition came in, however, you were able to “skim the cream” i.e. made a substantial profit from the high price used during your initial launch.

Aside from recovering faster your initial operating costs, this pricing approach does not diminish the high-value perception of your products and can attract price-conscious customers.

 

  • Penetration pricing

In this model, prices are initially set at a very low level to acquire market share.  Once sales volume eventually increases, the price is gradually adjusted upward to generate profit while trying to retain, or even increase, market share.

Penetration pricing often results in initial losses for your company in exchange for getting known and established in the industry. You have to eventually raise prices to a profitable level particularly when new inventories at higher costs start arriving to replenish your depleted stocks.

 

There are other popular pricing models but may not be suitable for your furniture marketing business.  Among these commonly used models are the following:

 

  • Economy pricing

Using low prices by keeping marketing costs to the minimum.  Often used for supermarket items and airline seats.  This model is advisable only for businesses that have economy of scale.

 

  • Psychological pricing

An approach to pricing where customers are made to respond to prices in an emotional and non-rational manner. An example is pricing an item at 99 cents instead of $1 or putting a price tag of $199 instead of $200. This creates an illusion of low pricing when customers look at the first number.

 

  • Bundle pricing

Combining several of the same or related items into a bundle and using a single price that is lower than the total of the individual original prices.  This is usually intended to dispose of slow-moving and old items.

 

 

As a customer, I am sure you have encountered other examples of pricing strategy.

 

The pricing element of the marketing mix directly impacts the profitability, market share, and long-term success of your business.

 

I welcome your questions, comments, or suggestions.

 

You may also check out what other business concerns I can help you with.

MARKETING

Marketing Plan Series (Part 1 of 7): The Product Strategy

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product strategy

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We are starting the marketing plan series with a discussion of the product strategy. We will identify the essential elements of a product strategy and the various tactics we can use in the execution of the product strategy for our furniture marketing business.

 

The marketing objectives

We commence by re-stating the marketing objectives defined in the earlier series on marketing strategy as follows:

  1. Product launch

To launch in the 2nd quarter of 2018 the initial home furniture and office systems lines.

 

  1. Brand awareness

To introduce the “ABODE” Brand of home furniture and “WORKPLACE” Brand of office systems to at least 40% of the target households and corporate clients by the 4th quarter of 2018.

 

  1. Market coverage – geographic (country:  Philippines)

To reach 20% of target households and target corporate clients in Metro Manila in the 2nd quarter, in the island of Luzon in the 3rd quarter, and in the islands of Visayas and Mindanao in the 4th quarter.

 

These marketing objectives will guide our marketing plan in the context we have discussed in the marketing strategy series.

 

We will show how each of the four elements of the marketing mix (product, price, promotion, and place) will contribute to the achievement of the above objectives.

 

In the process, we will be shaping our market offering, creating and communicating our business’ value proposition.

 

Specific to the product element, we mentioned previously in Part 4 of the marketing strategy series several strategies that suited the local marketing of imported brands of furniture. These were for products that have a fully implemented product strategy done by its foreign manufacturer and are now in the maturity stage of the product lifecycle.

 

One of the logical and common options of a furniture marketing business is to develop a separate product platform consisting of locally manufactured furniture items that meet specific needs/problems of the local market.

 

Our discussion of product strategy will deal with developing and marketing these local furniture items.

 

For our product strategy case, let us consider one furniture item – the dining set.

 

What is a product strategy?

Product strategy outlines the various elements and processes involved in the life of a product from its concept stage up to the end stage of its lifecycle consistently guided by how it can effectively and profitably satisfy the needs of its target market.

 

What are the elements of a product strategy?

  • Target market

Before coming up with a product idea or concept, you have to determine first what needs or problems exist in your target market that can be satisfied or met by your proposed product. This entails a thorough market research.

 

In the following discussion, you presume that market research shows that current urban dwellers prefer a 4-seater elegant and durable dining set that suits small households that live in condominium units.

 

  • Product concept

You and your management team have to go through a process that includes the following steps using market research data and market feedback:

 

  • Generating and screening product ideas

You come up with a 4-seater dining set made of local hardwood that is elegant and durable.

 

  • Testing the product concept

You may ask some of your key dealers and approach a few independent customers in a focus group setting for feedback on the product concept.

 

  • Test marketing the product prototype

You produce a prototype, test it for performance, price it for what you believe it is worth, and show it to your dealers and some independent customers for feedback this time on a tangible product with an indicative price.

 

  • Technical and cost adjustments

You summarize the feedback and make the required improvement in product construction, finishing, and color selection. You also review your production and other costs to adjust your price to a profitable and acceptable level.

 

  • Determining the minimum viable product

You revise the prototype and come up with the minimum viable product meeting the target market quality expectations and attaining your profitability target.

 

Once you have your minimum viable product, you and your management team can proceed with the other elements.

 

  • Design

How will your final product look, what are its dimension, finish, color, packaging, and other details that your target market deems aesthetically desirable?

 

  • Features

In what respect will your product differ from that of competitors in terms of design?  What other features can you add in terms of functionality?

Design and functionality differentiation is very important as it can convince customers to prefer your product in terms of aesthetic and performance, respectively.

You have to identify a few unique benefits associated with your differentiated product.  These will be your value proposition to your target market.

 

  • Quality

Aside from the product features and benefits you have identified, you have to establish a quality standard for materials and workmanship that is expected by your target market.  Quality forms part of your value proposition.

 

  • Pricing

Given your product’s particular features and quality, what is the competitive price range for products in the same category as yours as determined by market research and feedback?

 

  • Positioning

Having a clear product concept above, how would you position your product in the minds (and hearts) of your target market?  Would you highlight design, quality, or price? What is your unique value proposition that makes your product different or superior to those of competitors?

Going back to our dining set case, you can position the final product as a local product of excellent quality specially designed to suit the Filipino homes.

 

  • Branding

You and your marketing team can develop a brand that encapsulates all of the above elements.  You can come up with a brand name, logo, and brand styles that appropriately reflect these elements.

Your brand messaging should clearly communicate through all marketing channels your unique value proposition. It should differentiate your product from the competition.

You can brainstorm on several brand names and brand styles that embody your positioning statement.

 

  • Timeline

As with all strategies, you should have a timeline for achieving the various milestones in the process of carrying out your product strategy.

 

The above elements of product strategy are also collectively referred to as new product development.

Product lifecycle

Now that your product strategy has been implemented, you can monitor the progress in the market of your new product by deliberately following its lifecycle.

The product lifecycle consists of four stages, namely:  introduction, growth, maturity, and decline.  There is no standard total time span for this cycle and duration of each stage. Both vary to a large degree for different products.

Let us briefly discuss each stage.

  • Introduction

At this stage, market research has established the needed/desired features of the minimum viable product.  A prototype has been developed and has been scheduled for a production run.  Marketing samples have been given to the marketing and sales teams to promote the new product initially to key customers.

This is the most important milestone of your product strategy.

 

  • Growth

The new product has been promoted to all market segments using all marketing communication channels.  It has been carried by all channel partners and has been purchased by major corporate clients.  Sales volume has been accelerating and profits start increasing.

 

  • Maturity

At this point, new market entrants have introduced a similar product after recognizing the profitability of your product.  You try to boost sales and maximize profit while holding off competitors from gaining more market share.

 

  • Decline

Sales and profits decline while market share is eaten up by more competitors offering either cheaper or better quality similar products.

 

You can always extend the length of your product’s lifecycle or the duration of each stage by using different tactics involving the other elements of the marketing mix.

 

You may increase your product utility value by adding new features, reduce prices, launch more aggressive promotion, or improve the relationship with channel partners and corporate clients.  All these are intended to create a positive impact on your product’s lifecycle.

 

The product is the most extensively studied element of the marketing mix.  This article cannot adequately discuss everything about it.

 

For our present purpose, we have just discussed the most fundamental aspects to give us an initial understanding of product strategy.

 

I welcome your comments, suggestions, and questions.

 

You may also check other concerns about your existing and forthcoming business.

MARKETING

Your Marketing Plan: The Series

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marketing plan

Image Credit: geralt/Pixabay

 

Following the widely read series on crafting your own marketing strategy (from February 11 to March 18, 2018), I am coming up with a new series of articles that will discuss the fundamentals of a marketing plan.

What is a marketing plan?

A marketing plan is a comprehensive document, founded on a solid marketing strategy, that contains detailed action plans for a one-year period aimed at attaining specific marketing objectives.

It covers all key areas in the execution of your marketing strategy.

Aside from you as the business owner, key people in your business like the individuals in-charge of marketing and sales, finance, production, logistics, HR, and other personnel involved in value creation should be involved in drafting your marketing plan as these same people will have respective roles in carrying it out.

 

How does it differ from a marketing strategy?

As mentioned in my previous article, “A simple distinction: a marketing strategy is what you want to do to achieve your marketing objectives while a marketing plan is how you want to do it.  The marketing strategy identifies the various market-centric pathways or options you want to follow to achieve your marketing objectives. It is the big picture of your company’s marketing functions.  The marketing plan lays out the different tactical plans you will execute to propel your marketing strategy. It provides the details of the big picture.”

 

Can you run your business without a written marketing plan?

No.

A written marketing plan is important as it is your blueprint that serves as:

  • A starting point for documenting your action plans going forward on your marketing strategy;
  • It embodies your thinking as a business owner as well as those of your key personnel regarding the marketing functions of your business and subsequent changes in the organization will be guided by it;
  • As an overarching document, it will serve as the basis for the formulation of marketing campaigns and projects as well as marketing policies, systems, and processes.

 

The essential elements of a marketing plan

A marketing plan can be long and complicated as what big companies do but it can be short and simple as what suits a small business.

Let us focus on the small business.

You can develop a workable marketing plan taking into consideration these essential elements:

  • Market research

This includes the gathering of demographic and psychographic data about your target market, determining your buyer persona, compiling market size, potential, and growth trend figures, and qualitative data that can impact your current and future markets.

  • Competition

Knowing who your competitors are and their strengths, weaknesses, major customers, products, pricing, promotion, and distribution strategies.

  • Competitive advantage

As discussed in my article, “Competitive advantage is the edge you have versus your competitors in terms of cost (comparative advantage ) and differentiation (differential advantage).  It puts you notches above the competition and drives the profitability of your company.

Having sustainable competitive advantages will enable you to craft a marketing strategy that will give you market leadership and at the same time improve your profit margin and operating income.”

  • Marketing objectives

The marketing plan aims to achieve within a one-year period the stated marketing objective/s.

The marketing plan begins with a statement of the specific marketing objective/s for your target market.

The marketing objectives should be formulated based on an evaluation of results of the research and study of the target market, competition, and your value proposition.

  • Marketing strategy

These are the pathways you have chosen to follow to attain your marketing objectives. I discussed this topic in more detail in the recently concluded series on marketing strategy.

  • Marketing action or implementation plan

I will discuss this in another series of articles starting this month.

  • Performance indicators

These are key performance indicators (KPIs) used to gauge how effective the business is in the execution of its marketing plan.

At the end of each review period, you can analyze results against targets and measures.  You can determine which action shall have contributed positively to attaining your objectives and which would not. You can then make the necessary iteration and tactical adjustments.

  • Budget

This is the amount of money that you are capable and willing to spend in the process of implementing your marketing plan.  Ideally, this sets your limits to every item of expense you expect to incur.

Together with the sales forecast, these figures will tell you how effective you are in generating returns on the resources used in marketing and sales.

  • Contingency plan

While many marketing plans that I have seen usually do not include this, I consider the contingency plan an essential part.

The contingency plan gives you a foresight of probable competitive reactions as your marketing plan eventually unfolds.  With this foresight, you can line up the corresponding action plans to mitigate counter moves by competition.

 

The forthcoming series on marketing plan

In the marketing plan series, I will focus our discussion on the implementation plan, performance indicators, budget, and contingency plan.  I invite you to follow it all throughout.

The new series will use the same case project – the furniture marketing business.

Market research, competition, competitive advantage, marketing objective, and marketing strategy were discussed already in previous articles and in the marketing strategy series.

At the conclusion of the upcoming marketing plan series, I will consolidate it with the marketing strategy series to come up with a unified case study – the strategic marketing plan.

I enjoin you to give comments or suggestions on the past as well as on the coming marketing series.

You may also review other marketing and business concerns you may want to bring up.

ONLINE MARKETING

An Effective Content Marketing Strategy for Small Businesses

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content marketing strategy

 

 

Last week, we looked at content marketing from a straightforward perspective. Now, I would like to use again a simple viewpoint in discussing a content marketing strategy I find effective for small businesses.

 

Components of a content marketing strategy

 

A simple content marketing strategy includes the following:

  • Objectives
  • Topics of interest to the target audience
  • Forms of content presentation
  • Media to deliver content
  • Content calendar
  • Metrics
  • Performance assessment

I had discussed details of these components in my past blog.  Some excerpts are as follows:

Set your objectives. Your objectives have to be specific, measurable, and time-bound.  You may consider boosting sales by 20% in 2018 or increasing website traffic by 30% in 2018.

Select what topics you want to discuss. You may be an expert in organic and healthy food, natural beauty products, health and fitness, clean energy, or in any other topic about which you can confidently share your expertise.  Remember:  your audience does not take care about your product or service; they repulse a sales pitch. Your audience would value your content if these answer specific questions they have.  If you become an authoritative source on topics of interest to them, you gradually develop a relationship with and build a loyal audience.  Over time, this morphs into a beneficial and profitable relationship.

Determine appropriate forms of presenting your content. You can use written materials, infographics, e-books, slides, videos, podcasts, webinars, or printed collaterals.

Select cost-effective media to deliver your content. You can deliver your message through your website, blog, social media, email campaign, online and offline ads, and other media.

Create a content calendar. You need to put your content topics, selected forms, media, and distribution schedule into one file to make sure you cover, coordinate, and monitor everything.

Set your metrics. You have to periodically monitor what really matters like website traffic, engagement, and sales (new and repeat sales).

Analyze and evaluate results; iterate for improved performance. If sales, for example, are not being generated as desired, check your engagement and traffic data. See what you can do to improve these data, implement tactical improvements, and iterate. Good results require time, persistence, new skills, and deeper knowledge of your target audience. 

 

The effectiveness of a content marketing strategy

Statistics showed that many content marketers in different regions of the world, as much as 50% in the Asia Pacific region, had no content marketing strategy.

Without a well-thought-out strategy, content marketing efforts will likely go to waste.

Based on my own experience, the following factors contribute significantly to an effective marketing strategy:

  • A clear understanding of your target audience profile

I discussed this in my last article on content marketing.  You should have a clear grasp of your target market and buyer persona, what their needs, problems, and pain points that your product/service is trying to address, and how you intend to convince them that you have a better value proposition than your competitors.

In my case, more than 60% of my audience are businessmen in the technology and marketing fields who are interested in marketing strategies/plans to startup, operate, or grow their business.

  • Topics that resonate with your audience and, therefore, leads to conversion

Your target audience will read, follow, and emotionally connect with contents that are useful, relevant, and engaging.

Your contents should be presented in various forms to avoid monotony and published on various social platforms habitually patronized by your audience for higher engagement rate.

I find that topics about business plans and marketing strategies are of prime interest to my target audience.

  • SEO-driven contents

A basic understanding and know-how of SEO like the selection of keywords, writing titles and meta description, alt text, working knowledge of HTML 5, internal linking, and backlinking are all essential in creating SEO-driven content.

Persistent awareness and application of these SEO practices have resulted in more and more visitors discovering my site and reading my blogs.

  • Social media presence

Aside from SEO, my consistent presence on relevant social media platforms has remarkably delivered traffic to my website.

My target audience is mostly on Twitter and LinkedIn.

  • Results analysis and continuous experimentation for improvement

On a weekly and monthly basis, I take a look at the analytics for my website and social media posts.

These figures show me what content and types of post have performed well during the week and eventually during the month.

Insights into these data have enabled me to determine what topics to focus on and to introduce variations in the content format including images and animation.

The analyses and experimentations have consequently led to an exceptional level of engagement.

 

Implementing this simple content marketing strategy has resulted in improved marketing results.

I confidently recommend these to you including other options to improve your marketing efforts.

MARKETING

Understanding Content Marketing for Small Businesses

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content marketing

Image Credit: isi159/Pixabay

 

I would like to view content marketing from the vantage point of small business owners and aspiring entrepreneurs particularly those who are not yet familiar or have not used yet this marketing approach.

Let us discuss some basic facts about content marketing.

 

Who uses content marketing

 

Many small businessmen tend to believe that content marketing is only for big businesses which have the budget to hire an in-house team or big content marketing agencies to do the job for them.

Some are not even aware of content marketing.

But the fact is content marketing is used by both big and small companies worldwide.

Big businesses have the larger share in the use of content marketing as they find that it works for their brands.

Small businesses, even sole proprietors, in different countries have recognized the effectiveness of content marketing.

 

What is content marketing

 

Let us go back to my previous blog on content marketing which says:

“Content is the idea, topic, theme, or message conveyed through all media you use to communicate with your target audience.  It includes your websites, blogs, social media posts, newsletters, emails, printed marketing materials, images, infographics, podcasts, videos, webinars, publication articles, press releases, advertising in traditional and non-traditional media, and other communication media you use to reach out to your market.

Content marketing is a way of creating and delivering in a consistent manner useful, relevant, and engaging content (see definition above) to a target audience or market.”

 

Why use content marketing

 

Content marketing is not about promoting your product, service, or brand directly as in making a sales pitch.

You use content marketing for many good reasons but the most important are the following:

 

  • To build credibility, authority, and trust

 

It is about educating your target market/audience about the product or service that your industry generally produces.

If you are in the furniture industry, for example, you can discuss in your content about household furniture in general or living room furniture in particular without mentioning or highlighting your brand or any brand for that matter.

Prospective customers would like to get informed without the hassle of a sales pitch. They gather as much information as they can, evaluate their options, and then make an informed decision when they are ready to make a purchase.

 

  • To acquire new customers and develop brand supporters

If you consistently come out with useful, relevant, and engaging content, you gradually build credibility and authority about your industry’s products or services.  Consequently, your audience develops trust and confidence in you and goes to you when they need the product or service.

You may actually guide your content readers through appropriately timed content to eventually become buyers and even brand supporters.

 

  • To generate more sales from existing customers

Having developed a brand following, consistently providing your target market/audience with desirable content will enhance patronage from current customers.

Following the furniture example, an existing customer will decide to buy their next piece of furniture after buying their first set from you as you continue to build authority and trust in the furniture market.

 

 

Three fundamental elements of content marketing

 

Target audience/market

 

This is the set of people or businesses you are aiming at to sell your product/service.

You conduct a market research to know as much as you can about your target audience/market.

From the information you gather from research, you create a buyer persona.

A buyer persona is a hypothetical profile of your ideal buyers based on demographics, interest, motivation, preferences, and attitude that can collectively drive them to decide to do business with you.

With a deep understanding of how your prospective customers will make a purchase decision, you can align your content marketing efforts to attract, guide, and encourage them to do business with you in the light of your product/service best meeting their expectations and interest.

 

Message

 

Aside from establishing your buyer persona, you have to be clear also as to what needs, problems, or pain points you are exactly addressing. This, after all, is what your target audience/market is looking for in content that they engage with.

What makes your content engaging is how you set yourself apart from the competition.

Your competitors can say almost the same thing as you do.  But what makes your content more interesting and more engaging is how you present products or services uniquely or more convincingly than the competition.

You have to state clearly a unique value proposition.

 

Delivery

 

In the course of the market research you have conducted, you would come to know where your target market/audience spends their time outside of their usual activities like work, sports, leisure, and recreation.

Do they watch TV, listen to the radio while driving, read newspapers and magazines, or do they spend more time online?  Do they surf the internet, engage in social media, read blogs and/or newsletters, or read news online?

Knowing their offline and online habits and preferences would give you ideas on what formats and what platforms to use in publishing and delivering your content to your target market/audience.

 

Starting with these basic facts about content marketing, you can then eventually proceed with crafting your content marketing strategy.

Aside from content marketing, you may also check out equally important issues that can impact your business.

MARKETING

Your Marketing Strategy (Part 5 of 5): Resources

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marketing strategy

YOUR MARKETING STRATEGY (Part 5 of 5): Resources

Click to view animation:

http://www.powtoon.com/embed/fvB0Mb5jqqo/

 

Here is the last part of our short series on preparing your own marketing strategy and this is about resources.

In Part 4 of this series, we mentioned that you need resources to successfully implement your marketing strategy.

 

What are business resources

Business resources are assets and services owned or used by a company to produce goods and services that can satisfy wants and needs or can offer solutions to problems.

In old school or traditional economics, there are three groups of resources – land, labor, and capital.

I am inclined to use here the more contemporary classification of business resources into tangible and intangible groups as follows:

  • Tangible
    • Cash
    • Investments (stocks, bonds)
    • Machinery and equipment (for office, commercial, or production/logistics use)
    • Building (for office, commercial, factory/warehouse use)
    • Land (for building construction, agricultural production, or a source of natural resources like metals and minerals)
  • Intangible
    • Human resources (talents, skills, experience)
    • Systems and processes (unique/licensed systems)
    • Technology (software)
    • Intellectual properties (copyrights, patents)
    • Brands (global or nationally recognized)
    • Goodwill/Reputation
    • Relationships/Connections

 

For your furniture marketing business, it is easy to recognize how your tangible resources can be used to execute your marketing strategy.

I would like to discuss more in detail how intangible resources can energize your strategy toward creating and sustaining your competitive advantage. Let us take up three examples of tangible resources:

  1. Brands

You have chosen to carry two well-known furniture brands:  ABODE and WORKPLACE.

These brands have a good reputation in other countries that prospective customers already know or can easily verify online. These brands have good reviews too.

Between a reputable brand and an unknown brand (some furniture products have no brand at all), customers will prefer the former.  Even if your brands are priced higher, customers would rather put their money in brands with tested value offering rather than risk it on untested brands.

  1. Human resources

As they say, human resources are the best assets of a business organization.

A rigorously selected, thoroughly trained, progressively compensated, and highly motivated marketing and sales personnel can deliver fantastic results for your company insofar as revenue generation and customer acquisition are concerned.

It is true that creating and keeping this kind of marketing and sales staff can be very expensive in terms of time, money, and effort.

But what they can deliver in performance and results make the difference between your company’s success or failure, good or bad reputation, and pleasant or appalling customer experience.

  1. Technology

Technology enables your company to achieve a high level of efficiency and productivity.

A good CRM software enables your company to manage holistically in real time your marketing and sales operations.

An ERP software can track your business resources, provides updates on your business functions, and shares real-time information among your operating units as well as outside stakeholders.

An accounting software can give you complete, accurate, and timely financial information about your business.

In the course of operating your business, you can eventually acquire or develop other intangible resources that can enable you to take your competitive advantage to higher levels.

You can build over time a good relationship with major furniture retailers and big corporate clients – personally knowing and periodically communicating with their owners and/or decision makers. This puts you on par or even gives you an edge over competitors.

As your business continues to provide excellent quality furniture and customer support, you consequently attain a high level of business reputation and goodwill.  This resource is difficult to accurately quantify but it can definitely put you several notches above the competition.

 

What is business capability

Aside from resources, another factor that can drive your marketing strategy toward superior competitive advantage is business capability.

Business capability simply refers to what a business does at different levels of its organization.

Marketing and sales, for example, are among your business capabilities.  You actually develop these capabilities over time across its different sub-groups or teams.

Logistics management is another business capability.  Your ability to manage efficiently and productively your inbound and outbound logistics, which include the gamut of shipping, warehousing, inventory control, and transportation, can positively impact the execution of your marketing strategy.

As you gradually acquire learnings and gain more experience in these functional areas of your business, you consequently boost your competitive advantage.

 

You as the business owner should be able to effectively combine your company’s resources and capabilities to drive your marketing strategy towards creating and sustaining your competitive advantage.  This will ensure the survival, growth, and profitability of your business.

 

This brings to a close our short series on preparing your own marketing strategy.

I hope you have been able to pick up some good points that can be of use to your existing business or to your forthcoming startup.

Please feel free to get in touch with me for any question or clarification.  I will be delighted to discuss it with you. Or, you may check out other business concerns I can help you with.

This series on marketing strategy will be followed soon with a series on preparing your own marketing plan.

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