Developing A Marketing Strategy For Small Business

If You Have A Marketing Strategy in Place, Selling Becomes An Easy Task.

Having a marketing strategy will play a crucial role in the success of any product or service. No matter your innovation or the ingenuity of your offering, if customers do not get to know about it, there is no way it will sell.  “Doing business without advertising is like winking at a girl in the dark.  You know what you are doing, but nobody else does”, said Stuart Henderson Britt. Marketing is all about putting the right product in the right place, at the right price, at the right time. You have to develop a marketing strategy which will help you concentrate your limited resources on the greatest opportunities to increase sales. Before you can develop any a marketing strategy, you must first of all describe your unique selling proposition (USP) which sets you out from your competitors. You will agree with me that your competitors have their own strengths and abilities. It is not unlikely that you may be at the losing end if you fight your competitors in the areas of their strengths. Instead, you identify your own unique selling point and capitalise on it. It is important that you have a budget for your marketing plan so that you won’t just be throwing money out unnecessarily. You should see any amount you spend on marketing as investment which must produce good returns. If a marketing investment is not bringing you a measurable return, there is need for you to quickly review it and consider a better strategy. The only way you can adequately measure your return on your marketing investment is by having qualitative and quantitative goals at the beginning of your marketing campaign. To provide you a guide, you can measure marketing efforts by cost per sales, cost per qualified lead or cost per visitor or response. If the cost is higher than your anticipated figure or the sales you generate from your marketing efforts is not measuring up to your costs, this may signal that there is a need to change your marketing plan. Nevertheless, remember that not all marketing efforts will bring immediate returns. Some results can actually be qualitative. You should be able to marry both qualitative and quantitative results together before reaching a conclusion.

For a marketing strategy to produce any result, you need to be able to answer the following questions:

  1. Who is my ideal client?
  2. What makes my company/products/services different and unique?
  3. What type of information is my market seeking?
  4. What type of information can my company provide to our market that showcases our strengths, personality and values?

A marketing effort that does not focus on the above will produce no or minimum result.

Read Also: Email Marketing Tips for Small Businesses

Four P’s of Marketing

Four P’s is the acronym used to describe the strategic position of a product in the marketplace. The Four P’s stands for Product, Price, Place and Promotion.  They can also be referred to as a Marketing Mix.  The four elements should be viewed as one unit and structured to support each other; otherwise a marketing strategy will be confusing and uncoordinated. Below is more detailed explanation on these elements of the Marketing Mix.

Product

Product is the physical product or service you render to your customer. Your product decision will include the following:

  • Brand name: The choice of name for your product or service can go a long way for effective marketing. What does the name communicate to the customers?
  • Functionality: What are the problems your product or service is out to solve? People will buy your product or service because of the value it adds. A marketing strategy should not focus too much on product or service. If you market the value the product will add to the customer, they will quickly buy into it.
  • Styling: Two products may be performing the same functions but you can distinguish your own through creativity.
  • Safety: Is your product safe for use? If your product is not safe, customers will not patronise you. At the same time, you may face litigations.
  • Packaging: Another essential aspect to put into considering in a marketing strategy is packaging. Good packaging is very essential in marketing. The same way you need to package your product or service, you need to package yourself very well. Take for instance, the difference between sachet water popularly called as ‘pure water’ and bottled water is packaging. Packaging your product in a different way may create a niche for you even in a saturated market. For example, people were used to beverages in tins and big sachet until a particular company introduced a small sachet of milk into the market. That packaging alone created a new market for the company before other companies began to copy.
  • Repairs and Support: Providing after sales services such as repairs and other support services can make customers to prefer you.
  • Warranty: Offering warranty on your product or service give customers confidence about the quality of your offering. In most cases, some customers don’t get back to the sellers even when the situation covered by the warranty occurs.
  • Accessories and services: One stop shops usually sell more than their competitors. Customers like to go to a place where they can do all their shopping in one place. Adding relevant accessories to your product or service will be a plus

Price

Pricing decision is very key to attracting and keeping customers and ultimately the profitability of your product or service.

When you are entering the market, your pricing strategy may determine whether your product will be accepted or not. If you are entering the market with a new innovation, you may choose to adopt skimming as a price strategy; a situation whereby you charge high price initially so that you quickly recoup your costs before the market is flooded by competitors. But in a perfect market where there are competitions, this will not work. In this situation, you can adopt penetration pricing system whereby you charge low at the beginning in order to penetrate market and gain market share. Thereafter you can increase the price. This pricing should be adopted with caution. You need to consider what may be the competitors’ reaction to your price reduction so that this does not lead to price war. Also, it may be difficult to increase price in the future and still retain the customers.  The safest pricing strategy is to charge the same amount with your competitors

As part your pricing strategy, you may introduce volume discounts and wholesale pricing. You can also offer cash and early payment discounts to your customer. Other available options are seasonal pricing and bundling. You can introduce price flexibility by allowing your customers to buy and pay later.  But this needs to be properly managed.

Place Decisions (Distribution)

This does not necessarily mean a particular location where you sell your product; it has to do with the distribution of your product. It is commonly said that production is not complete until the goods get to the final consumers. Distribution is about getting the products to the customer. How do you intend to get your goods to your customers?  As part of a marketing plan, you should define your distribution channels. You may want to engage distributors or internal sales force. You can also sell directly to the retailers. Furthermore, you should define your market coverage and specific channel members.

There should be a proper inventory management system in place in order to ensure that inventories are always available when needed. This may involve you setting up warehousing or distribution centres. Quick processing of customers’ orders should be in place. How do you want to handle transportation? Providing free transportation to customers can be considered as part of  marketing strategy. Meanwhile, you should ensure that all your costs have been adequately factored into your price.

Promotion

This covers various aspects of marketing communication. It involves getting the information about the products across to the customers with the goal of generating positive response from them. This will include promotional efforts, advertising, personal selling and sales force, sales promotions, public relations and publicity and management of marketing communication budget. Advertising your products or services on newspapers is not enough nowadays. Online advertisement is very cheap and can be more effective. There are some websites that provide free listings or classified advertisement. You can make use of the opportunity.

Other Element of Marketing Mix

Besides the Four P’s discussed above, there are other Three P’s namely People, Process and Physical Presence. The concept of Four P’s has been long used for the product industry while the latter has emerged as a successful proposition for the services industry. 

People

People refer to the customers, employees, management and everybody else involved in an organisation. It is essential for everyone to realize that the reputation of the brand that you are involved with is in the people’s hands. It is very important to employ competent employee because most of the time, your employees will relate with customers. This makes the reputation of your company to rest on their hands. No one likes to do business with any company with a bad reputation. Training your employees on how to deal with different customers will help in developing a good relationship with your customers.

Process

Customers are more comfortable patronizing companies with a standardized process. How quick your response time to customers’ needs or enquiries may determine whether a customer will continue to patronize you or not. Your process should not only be effective, it has to be efficient.

Physical Environment

Unlike physical products which are tangible, services are intangible in nature and can’t be experienced before they are delivered. This makes the choice to use a service to be perceived as risky as opposed to physical products which can be seen. One way by which you can help your customers to see what they are buying is by having a good physical environment. Customers will make judgments about the organisation based on the physical evidence. A very good environment will give your business a good impression. This can actually be a distinguishing factor between you and your competitors. For example, hair salons can leverage on physical environment to charge a premium price for a service and establish a positive experience.

In conclusion, you need to know that there is no standard marketing mix that applies to all businesses or circumstances. The blend of the mix depends on some factors such as mentioned below:

  • Marketing objectives
  • Type of product
  • Target market
  • Market structure
  • Rivals’ behaviour
  • Marketing position
  • Product portfolio
  • Product lifecycle

As part of a marketing plan, different factors will determine how much you will set aside as a marketing budget. This is covered in our article on how to set a marketing budget under ‘growing your business’ category.

Read Also : Usefulness of email marketing to small business

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