Your Marketing Strategy (Part 4 of 5): The Strategy

marketing strategy

YOUR MARKETING STRATEGY (Part 4 of 5): The Strategy

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Our penultimate topic in this short series is the strategy itself.  We are discussing here the marketing strategies we will pursue based on the objectives we have selected and the information we have gathered, analyzed, and studied about our target market, competition, and your proposed company.

 

What is a marketing strategy

Marketing strategy is a long-term plan aimed at achieving a sustainable competitive advantage for a business by ensuring that its products and services satisfy its market’s needs in a profitable manner.

 

How do we formulate a strategy

Your marketing strategy should be broken down into action plans showing how you intend to develop a sustainable competitive advantage in terms of the elements of the marketing mix, namely:  product, price, promotion, and distribution.

Before proceeding, let us go back to Part 3 of this series which mentions that after conducting a competitive analysis and overall assessment of the market, you are now ready to define your company’s unique value proposition and why customers should prefer you over competitors. You can now define your competitive advantage.

For your proposed furniture marketing business, you may have stated your competitive advantage as follows:

‘Superior value offering from a combination of well-known furniture brands and a customer-centric professional marketing organization.’

Part 1 of this series discusses marketing objectives.  It mentions that when we talk about marketing strategy, or any strategy for that matter, we always start with the objectives.

For each of the marketing mix elements, you have to state the specific objectives you want to achieve which will contribute to sustaining your competitive advantage.

You may express your action plans for your furniture marketing business in reference to your stated competitive advantage as follows:

Product

  • Objectives
    • To exclusively offer starting 2nd quarter of 2018 the well-known ABODE Brand of home furniture lines and WORKPLACE Brand of office furniture/systems;
    • To launch in Q2 2018 the initial home furniture lines and office furniture systems;
    • To start in Q2 2018 pre-sales and post-sales customer support.
  • Strategies
    • Obtain exclusive distributorship agreement with the ABODE and WORKPLACE brands manufacturer for an initial duration of at least 5 years subject to annual review of sales targets and to subsequent agreement renewals;
    • Negotiate with key furniture dealers nationwide for them to carry both brands before formal product launch;
    • Organize a team of interior designers and architects to specifically render pre-sales consultation and post-sales support particularly to big residential and major corporate customers.

Price

  • Objectives
    • To offer a reasonable level of prices that reflect the quality and reputation of the ABODE and WORKPLACE brands;
    • To maintain said prices within the competitive range of comparable products in the market.
  • Strategies
    • Check out and constantly update market research data on market prices particularly for comparable products;
    • Strike a balance between price competitiveness and long-term product lines profitability.

Promotions

  • Objectives
    • To promote in the 3rd quarter through the 4th quarter of 2018 the ABODE Brand of home furniture and WORKPLACE Brand of office furniture/systems;
    • To create awareness for the brands and progressively build its reputation in the local market starting Q2 2018;
    • To form a community of loyal brand advocates starting in Q1 2019.
  • Strategies
    • Collaborate with the manufacturer regarding brand management and how the brand message can best be communicated to the local market drawing best practices from their successful experiences in other markets;
    • Check out market demographic and psychographic data and how these can be used to effectively customize brand message delivery in terms of content and communication channels;
    • Engage reputable residential customers, big corporate clients, and popular interior design influencers in endorsing the brands

 

Distribution

  • Objectives
    • To reach 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 of 2018;
    • To make the brands available to residential and corporate customers nationwide by Q1 2019;
    • To have all key furniture dealers and retail chains carry the brands by Q1 2019.
  • Strategies
    • Set up a sales organization capable of:
      • Tapping all big furniture dealers and retail chains nationwide for them to offer and carry stocks of the brands;
      • Tapping the top 1,000 business organizations in the country to use the WORKPLACE office furniture/systems.
    • Set up a logistics system that can:
      • Cost-effectively deliver the products within committed delivery lead times to both dealers and end-users nationwide;
      • Provide after-sales services to dealers and end-users nationwide in a timely manner.

 

The above action plans will be your springboard in subsequently crafting your marketing plan.

The marketing plan will outline in detail HOW you will implement your marketing strategies, again keeping in mind your competitive advantage as defined above.  We will discuss marketing plan in a forthcoming series of blogs.

We will discuss Part 5 (the last portion of this series) in the next blog.  It will be about the resources you will need to successfully implement your marketing strategy.

I am sure you can inject more creative and innovative ideas into this discussion.  Please feel free to do so by sending me your comments.  You can also check out what other services you may need for your business and marketing efforts.

Your Marketing Strategy (Part 3 of 5): Organizational Analysis

organizational analysis

YOUR MARKETING STRATEGY (Part 3 of 5): Organizational Analysis

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Let us take a look at your proposed company’s capabilities and what your competitors have.  Part 3 of our series discusses organizational analysis.

 

What is organizational analysis

It is the process of examining the internal structure, processes, and resources of a business particularly its internal strengths and weaknesses and how these relate to external threats and opportunities that can affect its performance.

 

Why is organizational analysis important

An organizational analysis is conducted to determine how a company or an organization can be more effective.

It can identify problems and needs which can be addressed before bigger problems arise.

It can also highlight how a company’s strengths can be matched with opportunities to create a competitive advantage.

 

SWOT analysis

One of the models commonly used in organizational analysis is the SWOT analysis.

You know already that SWOT stands for strengths, weaknesses, opportunities, and threats.

  • Strengths – Resources and capabilities of your proposed business that give it an advantage over competitors.

In launching your furniture business, you may have tangible resources like a strong financial backing from lenders or investors; or, you may have a strategically situated showroom and office.  Your resources may be intangible ones like a connection to a well-known foreign brand which is interested to be part of your furniture marketing business.

  • Weaknesses – Internal situations or characteristics that put your proposed business at a disadvantage relative to competitors.

One of the most common weaknesses is being a newcomer to the industry and not knowing personally the key players in the trade – both in the supply side and the distribution side.

  • Opportunities – External situation or events that your company can exploit to its advantage.

A major housing program by the government or an aggressive development of condominiums in emerging urban centers can be good opportunities particularly if you have conducted the necessary research that can give you the relevant demographic data.

  • Threats – External situations or events that can pose real or potential problems for your company.

Usually, you have no control over these threats.  The possible entry of global furniture retail giants can be a formidable problem to deal with.

What is important to note here is how you relate the SWOT analysis to your marketing objectives.

We discussed before that objectives and strategies always go together. To achieve a given objective, you have to follow a well-defined strategy.  A strategy can only be successfully executed if you have the required resources and capabilities (your strengths) that match an existing opportunity.  The strategy selected may ideally include tactics that can mitigate your company weaknesses and external threats.

If your objective, for example, is:

To reach 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.

Your strategy may be:

To get the local distributorship of the well-known “ABODE” and “WORKPLACE” brands of furniture and to maintain an optimum inventory level; position it as the brands of choice for condominium occupants in major urban centers.

What we have done here is to craft a strategy using your strengths (connection to well-known brands and strong finances for inventory purchases as well as promotions) to match an opportunity (condominium developments in emerging urban centers).  This strategy is aimed at your objective of reaching target households and corporate clients as stated above.

 

Competitive analysis

Knowing your company’s internal strengths and weaknesses and how you can relate these to opportunities and threats in the external environment, you have to know next how your major competitors are faring.  You have to conduct a competitive analysis.

Competitive analysis is an objective process of identifying your competitors, evaluating their respective strategies, and determining their respective strengths and weaknesses based on research.

Your goal in doing a competitive analysis is to establish the uniqueness of your product offering and how you can competitively position your business for survival and growth.

A competitive analysis typically covers the following criteria:

  • Your major competitors
  • Their product offerings
  • Their prices
  • Their sales value
  • Their organization
  • Their cost structure
  • Their strengths
  • Their weaknesses
  • Their strategies

The simplest way of presenting a competitive analysis is using a table such as this:

competitive analysis

You can evaluate these data against the backdrop of competitive rivalry and the foreseeable trends in your market.

After conducting a competitive analysis and overall assessment of the market, you are now ready to define your company’s unique value proposition and why customers should prefer you over competitors.

I am sure you can inject more creative and innovative ideas into this discussion.  Please feel free to let me know your comments. Check out also how I can be of further assistance to you.

Your Marketing Strategy (Part 2 of 5): Market Analysis

market analysis

YOUR MARKETING STRATEGY (Part 2 of 5): Market Analysis

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Our topic for this article is market analysis.  This is Part 2 of 5 of our ongoing series on preparing your own marketing strategy.

Again, we will use the proposed furniture marketing business in discussing market analysis.

What is market analysis

Market analysis is the study of the quantitative and qualitative characteristics and dynamics of a specific market within an industry to determine its attractiveness for a particular business.

Key elements of market analysis

  • The industry – an overview

This is a general description of the industry you are planning to enter in.  An industry is a group of companies having the same primary business activities.

The furniture industry is composed of companies engaged in the manufacture, importation, wholesaling, and retailing of furniture.

  • Target market segments

Target market segments are your potential ideal customers/clients.

In the case of the proposed furniture marketing business, these segments are the residential households and the business sector.

Demographic profile

The demographic profile of the residential households includes their location, number of family members, total income level, and sources of income.

A household with a high income would normally prefer high-end solid wood furniture.

The demographic profile of the business sector includes their location, number of employees, annual revenue, and business category.

A company with a large number of employees would usually purchase generic office furniture to save on cost.

Psychographic profile

The psychographic profile of the residential households includes its values, opinions, interests, beliefs, and attitude toward a product or line of products.

A household which belongs to social Class A would mostly consider using branded high-end furniture that reflects their social and economic status.

The psychographic profile of the business sector is primarily based on the motivation, culture, and corporate values of the business owner or key managers.

A business which puts a premium on cost-saving will almost always purchase generic office furniture that is functional and modestly priced.

  • Market size

Market size usually refers to two values – the total number of units and the total sales value – that your target market segments can potentially buy.

These data may be obtained from a number of sources such as relevant government agencies, industry associations, and major industry players.

While data from the above sources may be inadequate to establish a clear market size, you may do your own calculations particularly of the value of the total market.

What I normally do is to take the average price of each furniture piece usually from the biggest furniture retailer.

Then determine how many furniture pieces each of the targeted household and business establishment will purchase in a given time frame.  For example, one dining set every five years; or, one office desk every three years.  You may be able to get also the purchase frequency from the retailer, from an accountant friend familiar with the economic life of office furniture, or from friends who can tell you how frequent they change furniture at home.

You may calculate the annual market value by multiplying the average price of the furniture by the purchase frequency factor and then by the number of potential household customers or business clients.

  • Market growth rate

The projected growth rate of your target market segments directly impacts the growth of your proposed business.

The simplest way of determining the market growth rate is to extrapolate historical data from secondary sources such as government, industry, and major players.  However, the resulting figures may not be reliable enough considering the constant changes in the market.

Another approach is to consider the growth drivers in the industry.  These growth drivers may include population growth, improvement in household per capita income, the rate of urbanization, business incentives offered by new urban centers, increasing awareness of sustainable development, adoption of new technologies, and others that can directly impact the industry growth.

An improved economic climate resulting in higher per capita income may drive households to buy better quality furniture; or, an increasing awareness to preserve the forests can motivate households to buy more fiberboard furniture. These developments would result in a positive growth.

In other cases, the impact may be detrimental to an existing product line resulting in negative growth. The growing use of laptops in offices in lieu of the desktops reduced the sales of the erstwhile computer desks.

  • Market trend

Market trend refers to current and forthcoming changes in the market.  These changes usually create opportunities or threats to existing and planned businesses.

The use of cheaper and more versatile wood substitutes has significantly reduced the price of furniture and has enabled manufacturers to easily come out with new furniture designs with creative finishes using different laminates.

  • Industry cost structure

The industry cost structure shows the various costs in the value chain of your proposed business.

In the case of the furniture marketing business, we assume that the proposed company will import all its furniture lines, wholesale it to trade channels, set up its own retail brick-and-mortar stores, and sell directly to corporate clients.

Its value chain will look something like this:

Imports Logistics →  Operations → Distribution Logistics → Marketing & Sales → Customer Support

Each of these functions in the chain incurs costs.  It is important then that you understand well the components and dynamics of these costs so you can be competitive in the market.

Th economy of scale is a popular concept here.  Importing a big volume of furniture will save you a lot of cost in shipping, customs brokerage, handling, and inward shipping.  Delivery in bigger bulk to distribution channels will result in significant savings in outward shipping and handling costs.

Looking at the value chain from another perspective, you can also determine where you can create superior value for your customers.  For example, you can consider setting up regional depots as part of your distribution logistics that will enable you to cut down delivery lead time to far-flung markets while existing competitors deliver from a central warehouse. This setup creates additional value for customers by providing them with quicker delivery.

The value chain concept gives you an opportunity not only to analyze your cost structure (to save on costs) and but also to determine where you can create superior value for your customers (to be uniquely better in some ways).  Both of these perspectives will provide your company with a competitive advantage.  We will discuss competitive advantage further in the topic of strategy (Part 4).

Other elements

Other marketing authors discuss additional elements under market analysis. These topics include competition, competitive analysis, barriers to entry, regulations, market profitability, distribution channels, and key success factors.

I will discuss competition and competitive analysis when we tackle organizational analysis in Part 3.  This way, we can compare your proposed company versus your competitors.

Importance of market analysis

Conducting a market analysis enables you to:

  • Get a clear grasp of your target market; know who and what you will be dealing with;
  • Determine that the products you will be offering will fill real and continuing needs and you can market it in a profitable and scalable way;
  • Have facts and figures to back up your financial projections particularly if you are seeking to fund your startup through loans or equities;
  • Reduce risks of failure by learning more about opportunities and threats in the market and the industry;
  • Review your written analysis periodically and update it based on new developments.

 

I am sure you can inject more creative and innovative ideas into this discussion.  Please feel free to do so by sending me your comments.

Your Marketing Strategy (Part 1): Marketing Objectives

marketing objectives

YOUR MARKETING STRATEGY (Part 1 of 5): Marketing Objectives

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This is Part 1 of 5 in a short series on preparing your own marketing strategy.

In this post, we will discuss your marketing objectives.

As mentioned last time, we will take up the case of a proposed furniture marketing business as an example to explain how to go about describing your marketing objectives.

Why define your marketing objectives

When we talk about marketing strategy, or any strategy for that matter, we always start with the objectives.

In a sports competition, the objective is to win the game.  When we discuss how to win the game, we talk about strategy.

Objectives and strategy are inseparable.  Nothing can be truer in the case of marketing strategy.

The marketing objectives should always be in alignment and in support of the company overarching objectives (like to attain a net profit rate of 10% in 2018) and medium- to long-term goals (like to be the market leader in the local furniture industry).

The corporate objectives and goals are calibrated milestones driven by the corporate vision – what the company wants to attain or where it wants to be in a foreseeable future.

Usual marketing objectives

The usual marketing objectives fall within the criteria of boosting sales, product launches, brand awareness, market coverage, market share, or market leadership.

Marketing objectives for the proposed furniture marketing company

You have heard it before – objectives have to be SMART.

Let us review what SMART means:

S – Specific.  The objective should state relevant details about market realities.

M – Measurable.  Quantitative or qualitative metrics can be drawn.

A – Actionable. Results can be a basis to take action or improve company performance.

R – Realistic.  Reasonably attainable using available resources.

T – Time-bound.  The time frame is a specific target to review performance.

Other words and meanings can be used for the SMART mnemonic but in our case, we will be guided by the above-stated meanings.

Following the above guidelines, we will adopt the following objectives for our furniture marketing startup:

Product launch

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

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.

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.

For a startup, these are relevant and realistic objectives.  Boosting sales and market share targets can be considered in the 2nd year of operation after the business shall have taken a foothold in the market.

A subset of each of the above marketing objectives should be included in the marketing plan. Both the marketing and sales people will work on these targets:

Product launch targets:

  • Launch home furniture lines in May
    • Living room lines
    • Dining room lines
    • Bedroom lines
  • Launch office systems lines in June
    • Office furniture
    • Partition systems

Brand awareness targets:

  • 100% complete brand attributes and strategy by March
  • 100% complete content and media strategy in April
  • 100% finished marketing collaterals for sales staff in April
  • Launch online promotion campaigns in June to last until December
  • Launch offline promotion campaigns in July-August and October-November

Market coverage targets:

  • Open trade channels in Metro Manila in May-June tapping at least 50 key furniture dealers
  • Open trade channels in Luzon in July-August tapping at least 100 key dealers
  • Open trade channels in Visayas and Mindanao in October-November tapping at least 100 key dealers
  • Engage and present to at least 50 Metro Manila-based companies (among the top 1,000 corporations) monthly starting in May

What eIse?  I am sure many of you can inject more creative and innovative ideas into this discussion.  Please feel free to do so by sending me your comments and suggestions.  I will also answer questions.

How to Prepare a Marketing Strategy: A Short Series for Entrepreneurs

marketing strategy

YOUR MARKETING STRATEGY: The Series

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Starting with this post, I am publishing a short series explaining in a simple manner but comprehensive enough how to prepare a marketing strategy.

With this series, I am hoping that entrepreneurs would be able to learn something in understanding better and preparing marketing strategies themselves.

Topics to be covered

Marketing strategies can be as short as a one-page presentation outlining basic information or as long as multi-pages filled with visuals and appendices detailing complex markets and products/services offerings. I will discuss the basics only.  The simpler it is, the easier it is to understand and implement.

Initially, here are the major topics to be discussed in the order as presented below:

  • Marketing objectives

  • Market analysis

  • Organizational analysis

  • Strategies

  • Resources required

Marketing strategies can include other major topics but for this series, I consider the above as essential to preparing a basic and workable strategy.

What is important here is that entrepreneurs, particularly those who are starting a business for the first time and those without any marketing background can understand these topics, assimilate these into their business models, and prepare a marketing strategy themselves.

I can add more topics as we develop the case study especially if there will be suggestions from the readers.

Selected case project

I have selected the furniture business as the case project.

Aside from my long experience and familiarity with the furniture industry, this business has a universal appeal.

Everyone everywhere needs at least a piece of furniture.  It is used in homes, offices, schools, commercial establishments, and other places where there are people.  It is sold in the B2C and B2B markets. It is sold online and in brick-and-mortar stores.

As furniture can be marketed by startups, SMBs, and large and global enterprises, the study can be interesting to a wide spectrum of entrepreneurs.

I have also noted that more and more small businesses worldwide would like to have a good marketing strategy prepared for their business – startups and existing – using either online or offline approaches, or both.

Methodology

The series will go through the process of preparing a marketing strategy on a proposed furniture business.

The topics enumerated above will then be explained using the information in the sample study.

To make the discussion simple and straightforward, the study will tackle a hypothetical situation but which is closely aligned with a real market situation.

Incidentally, I am also starting to use animation in my blogs.  I hope to make my content delivery lighter, less rigid, and less formal. The above initial attempt at animation, which has been created using Powtoon free plan, is a work in progress.

 

For the first installment of this series, look out for my next blog.  Time permitting, I would like to dish out the series on a weekly basis.

I suggest you capture the whole series by following my blogs (simply press the small light blue rectangle follow button on the right sidebar).

Meanwhile, let me know if you have other concerns I can help you with.

No Matter What, Write a Business Plan

 

business plan

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The new year is here.  Many aspiring entrepreneurs are planning to start a business in 2018.  Some would like a brick-and-mortar business while others would prefer an online business.  More and more would-be businessmen are considering e-commerce particularly the dropshipping kind.

There is nothing like having your own business.  The challenge, excitement, risk-taking, and financial rewards are fascinating.  On the other hand, the unseen problems, miscalculations, hardships, stress, and business failures may have far-reaching personal and financial adverse consequences.

To have a better chance at succeeding in your new business (or even expanding an existing one), you must write a business plan.  It may not be a formal business plan as long as it is a plan about your business and it should be in writing so you can go back to it later after you shall have launched your business.

Business plans come in different degrees of complexity depending on what audience it is intended for – business owners/stockholders, prospective investors, lenders, or government agencies.

However, the best business plan is one that is simple, well-researched, and includes the most important factors for business success.

 

Critical components of a business plan

  • Market study

Know your target market whether it is in the B2C or B2B sector.  Conduct a thorough market research.  Learn as much as you can about the demographic, psychographic, and competitive situation of your market.  Establish a clear profile of your target customer.  Create your buyer persona.

Studying thoroughly how you can best serve the needs of your potential customers and knowing the strengths and weaknesses of your competitors, you can establish your unique value proposition that can give you a competitive advantage and, therefore, a good chance of survival and eventual business success.

It is important that you have a minimum viable product and establish a product-market fit. Make sure your product meets (or even exceeds) the expectations of your potential customers.

It is crucial for you to draw up and test the effectiveness of a repeatable customer acquisition process.  Having a good market and product will lead to nowhere if you cannot grow a profitable customer base.

  • Financial study

You should have a clear grasp of how much money you need to start and sustain your business.  You should know the details of your startup costs and your cash flow during the initial stage of your operation.  You should be able to clearly follow the money flow, how you create value for your customers, and how you generate profit to support business growth.

Generally, you should be able to have available cash for pre-operating expenses, to launch your business, and to continue operating at least for the first three years. This is where a cash flow projection becomes critical – knowing your fund sources, your cash expenditures, and making sure there is enough cash left for the next operating cycle.

You should also be able to determine how much sales you can realistically generate per cycle, your cost of producing your product/service (like material and labor inputs in production), your operating expenses (like marketing, sales, and administrative expenses), and how much profit (or loss) you will realize.  You put all these financial data into your profit and loss projection.

  • Management study

It is also crucial to consider who will be in-charge of running the day-to-day operation of the business.  Normally, the founder/owner will manage it.  However, a business will need professional expertise in marketing, sales, production, finance, and administration.  It is advisable for the founder/owner to get somebody, probably as a business partner, who has the expertise that can complement his/her skills and experience.

It is never too late to start your own business.  But do it right the first time around as it will save you a lot of money, time, and headaches.  Write a simple and short (even one page) business plan.  You may request here for a free outline of a one-page business plan.

Why Offline Advertising Continues To Be Effective

offline online advertising

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Despite the continuing and growing buzz about online advertising, we still see companies using offline media for advertising. Many businesses continue to use tv, radio, print, direct mails, and out-of-home advertising media such as billboards, posters, banners, and transit ads.

Offline media ads are generally more expensive, less targeted, and its ROI cannot be determined and evaluated in real time. On the other hand, online advertising campaigns can be done on a relatively smaller and tailor-fit budget, can be laser-focused on a specific niche, and results can be analyzed and evaluated using real-time metrics.

 

Appeal of offline advertising

I am trying to assess the appeal of offline advertising from the point of view of an ordinary consumer.  I am considering these points:

  • Offline ads present themselves in a less “pushy way”. I hardly find them obtrusive.  Or, I can easily choose to ignore them.  Skillfully presented, some of these ads can be pleasantly informative and entertaining.
  • Through constant and persistent exposure, like seeing billboards on my way to work at least once a day for thirty days, I get to recall the brands and its messages more distinctly and probably get to engage with them when the relevant needs arise.
  • I can always go back on a leisurely schedule to newspaper or magazine ads and even direct mailers to read more about a product or service which I had initially found interesting. I can then make a call to the advertiser and inquire about some points I previously jotted down.
  • There are segments of the market that are not inclined or do not have time to access online media but are constantly exposed to offline ads like radio, billboards, transit ads, banners, or posters while engaged in their daily or routine activities.

 

Outlook for offline advertising

Given the above observations, I believe offline advertising will stay and continue to be used by both small and big businesses, by local and global companies.  While use and expenditures for online advertising will continue to grow, many marketers will still consider some forms of offline advertising in their promotional mix.

 

Combining offline and online advertising

Effective promotional strategies will include collaboration between offline and online advertising.  While the ratio of use and ad spend will be heavily in favor of online advertising, offline channels for brand messages will remain in use.

It may work this way:

A brand catering to the B2C market can periodically buy ad spots on tv, radio, or print with brand awareness as the objective.  The broadcast media reach can be national or regional. These offline ads would highlight the brand and the company URL. These tri-media ads will run in conjunction with online promotional campaigns.

The online ads will actually run continuously throughout the year with far more objectives in consideration such as brand awareness, credibility and reputation building, lead generation, and customer engagement (particularly two-way engagement which cannot be done in real time with offline advertising).  Online media will include online ads such as those on Google, Facebook, Instagram, and others.

Both the offline ads, directing its audience toward the advertiser’s URL, and online ads generate traffic to their website.  This synergistic combination will result in significant awareness and lead generation for the brand.

Through effective inbound marketing efforts, the leads generated can be converted to outright sales or may be followed through with outbound marketing efforts using offline promotional tools like direct mails or personal selling.

The combined offline and online advertising can also be used for the B2B market.

In promoting your brand, you may look into how to effectively combine offline and online advertising.

What Is The Marketing Mix?

marketing mix

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The marketing mix or the 4 P’s of marketing are the variables in marketing management that are tactically integrated into the process of satisfying customer needs or market demand.  These variables are the product, price, promotion, and place (hence, the 4 P’s). These are called variables because you can modify the degree or scope of each to optimize the success of your marketing campaign.

The marketing mix is at the core of your marketing plan.  The tactical integration of these four variables is in support of the implementation of your marketing strategy.

You execute your marketing strategy through your marketing plan.  The marketing plan outlines the details of how you blend these four variables to achieve your marketing objectives like boosting sales, increasing market share, or expanding into new markets.

 

Elements of the marketing mix

  • Product

This refers either to a tangible product or service.  When you talk about a physical product, you consider its physical characteristics like materials, design, dimension, and packaging among other features.  You also look at its functions and what benefits it provides to its end-users.  You also point out what it can do or provide better than competing products so you can establish its unique value proposition.

You approach a service in almost the same manner except for the physical characteristics.  You identify the service functions and benefits like what needs it can satisfy, problems it can solve, or how it can make life better or business run faster and cheaper.  You also highlight the competitive advantage of your service offering.

  • Price

Price is how much you pay for a product.  In many cases, price calculation is not simple.  Some entrepreneurs consider price as a function of cost, i.e., cost + profit = selling price. Others, particularly those who are really marketing-oriented, look at the price from the more complicated standpoint of how market forces are playing out.  From this perspective, you price the product based on the intersection of supply and demand. You can price your product as high as the market can accept or price it as low as possible to beat the competition.

This is why there are two common pricing strategies, namely:  skimming and penetration pricing.  You skim to maximize profit or you adopt penetration pricing to gain market entry or acquire market share.

  • Promotion

Promotion is creating awareness for your product in the target market.  It actually goes beyond creating awareness as promotion includes developing an interest in your product among potential customers and eventually leading them to make a purchase decision.

Promotion takes many forms but now generally falls under online and offline (or traditional) promotions.  Online promotion includes creating content and using online media such as website, blog, social media, email, and online ads.  Offline promotion covers traditional advertising (tri-media [tv, radio, and print] and out-of-home advertising [billboards, transit ads, banners/posters]), events, ground activation, and direct mails. Promotion also includes online and offline public relations and publicity campaigns.

  • Place

Place (or distribution) refers to how the end-users access your product. Again, this can be categorized into online and offline distribution.  Online distribution is dominated by e-commerce where customers can shop, pay, and receive the goods without leaving their house or office. Offline distribution involves the physical stores and offices including the accompanying logistics in moving the goods (and even services) from producers to end-users.

 

Understanding the marketing mix

It is quite easy to understand why the use of these four marketing variables in marketing management vary in degree and scope depending on market conditions.

How you use the marketing mix is largely influenced by the competitive rivalry in your market.

If you have an innovative product that nobody currently offers and that can satisfy the needs of a large market, you can skim the market by pricing high to maximize profit.

You can use penetration pricing to gain entry into a competitive market and gradually acquire more market share.

In a highly competitive market, you can spend a significant amount of resources for promotion and advertising to create a brand presence comparable or stronger than competitors.

Faster delivery of goods or more conveniently located stores can give you an edge over competitors.

 

Importance of the marketing mix to your business success

A marketer’s ability to create an optimized blend of the marketing mix will determine how successful his/her marketing campaign will be.  An excellent blend will result in remarkable customer needs satisfaction, growing product patronage, and brand loyalty.

Expert management of the marketing mix not only brings marketing success but also business profitability.

Marketing: How Should Entrepreneurs Approach It?

marketing

Image Credit: geralt/Pixabay

 

I met on several occasions startups and small business operators who seemed a bit confused about what marketing really means.  Some considered it as simply promoting or advertising a product.  Several understood it as selling a product.  I believe this can be expected particularly if you are talking about businessmen who had a purely technical exposure before or those whose fields of expertise were not anywhere near the marketing profession.  I was in a similar situation before I took up a business course.

I will try to present here for our friends, who want to go into business or are already running their startup businesses, what marketing is and how critical it is to the success of their business.

What is marketing

According to BusinessDictionary, marketing is “The management process through which goods and services move from concept to the customer…Marketing is based on thinking about the business in terms of customer needs and their satisfaction…marketing has less to do with getting customers to pay for your product as it does developing a demand for that product and fulfilling the customer’s needs.

In marketing, we deal fundamentally with customer needs and the satisfaction of these needs.  These needs could be a solution to a problem, life or business improvement, or elimination of pain points.  Providing a product or service that addresses or satisfies these needs in a manner that is profitable for the business is front and center to a marketer.

If there is an existing need, the marketer may fulfill it alone (as in a monopoly) or in competition with other suppliers.  If there is no existing need, the marketer may create a demand for his product/service. In either case, the marketer would promote or advertise his product/service. In doing so, the marketer creates awareness and builds interest in his product/service, and develops compelling engagement with his potential customers.

Selling, on the other hand, is the process of approaching a potential customer and leading him/her into making a purchase of the product or service.

Good marketing leads to sales.

How do you set up and run a marketing operation

For a startup or small business, the marketing and sales functions are integrated and handled by one person (most often the owner himself/herself) or group of hired persons (such as a team or department).

As can be surmised above, marketing prepares the foundation and groundwork so a business can have customers and generate sales.

Marketing refines the product/service concept and develops it to fit as best as possible the needs of the target market.  It also calculates the optimum price for the product/service to maximize profit for the company while remaining competitive in the marketplace. Marketing promotes the product/service so potential customers get to know about it and eventually get persuaded to buy it.  It establishes the distribution channel or network so the product/service can be accessed or delivered to the customers.

How important is marketing

Marketing identifies and develops the market for the product/service. It enables sales generation.  Through all these activities, marketing ensures a continuing, expanding, and profitable business. No other function in a business is more crucial than marketing.

Entrepreneurs will do well by understanding marketing and effectively implementing it to improve their business operation.

Marketing Strategy: What Are the Important Data to Consider?

 

demographic data psychographic data competitive data

Image Credit: geralt/Pixabay

The foundation of a workable and effective marketing strategy is the type and quality of data you consider in making an analysis, evaluation, and conclusion about your target market, competition, and value proposition.

As a startup or a growing business, you should gather demographic and psychographic data about your target market, and data about current and potential competitors. From this body of information, you can derive ideas that can be helpful in establishing your competitive advantage.

Demographic data

According to Techopedia, demographic data are “data that is statistically socio-economic in nature such as population, race, income, education and employment, which represent specific geographic locations and are often associated with time.”

These data are usually used by marketers in crafting their strategies for B2C markets. In developing a consumer product –  market fit, marketers study gender, age, ethnic, income, education, and other consumer data.

If you are dealing with the B2B markets, you will gather a different set of data.  These may include industry sector or sub-sector, nature of the business, type of organization, number of years in business, annual sales volume, number of employees, the location of the office, geographic area of operation, brand, product, major customers, and other relevant data you need for your study.  You can get these data directly from the companies (company website and their other publications or you can interview company officers) and from secondary sources like government reports, industry publications, or paid research reports/services.

Psychographic data

Reference.com cites three main groups of psychographic studies:

  • By social class – classifying people into groups based on the occupation of their chief income earner – from Class A to Class E;
  • By lifestyle class – categorizing people based on their values, opinions, interests, and beliefs although these categorizations change constantly;
  • By behavioral segmentation – grouping people by knowledge, use, responses, and attitudes to a product.

Marketers study psychographic data together with demographic data to get a deeper and more comprehensive understanding of their target market segments.

Competitive data

These are information about current and potential competitors that you gather to create competitors’ individual profiles and competitive matrix.  These will show the strengths and weaknesses of competitors relative to each other and to your company.  Usually, I include the following data:

  • Name of competitors, with addresses of their main and branch offices and other facilities
  • Supply chain
  • Product/Service offered
  • Product/Service features and claimed benefits
  • Marketing strategies and tactics for product innovation/development, pricing, promotion, and distribution
  • Marketing communication channels/media
  • Customer support
  • Customer feedback
  • CSR projects, if any

Analysis and evaluation of these data will enable you to fend off potential threats and/or capitalize on unique opportunities to create, fortify, or boost your competitive advantage.

You can gather competitive data from competitors’ website, blog, social media post, advertisement, marketing and corporate publications, and other media they use to communicate with the public.

Impact on business strategies

Demographic, psychographic, and competitive data are the building blocks of a solid, workable, and effective marketing strategy as well as corporate strategy.

While the importance of these data cannot be overemphasized, many startups and entrepreneurs fail to gather and study enough of these. The depth and breadth of these data that you have in itself constitute a competitive advantage.  These can give you an edge over the competition and prevent costly surprises from happening down the road.  You can always seek professional help in researching and using these data.

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