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MARKETING YOUR BUSINESS FOR SUCCESSWORKSHOP INTRODUCTION MARKETING YOUR BUSINESS FOR SUCCESS WORKBOOK Training Module - 3Workshop ObjectivesBy the end of this workshop, you should be able to: * Determine the purpose of the marketing plan - Identify strategies for conducting market research - Identify advantages of market research * Determine what the marketing plan contains - Target market - Competition - Product/service - Marketing budget - Location - Pricing strategy - Promotional strategy * List - advantages of developing a marketing plan - disadvantages of developing a marketing plan * Prepare a marketing plan outline * Develop an effective marketing strategy - Advertising strategy - Promotional strategyMARKETING YOUR BUSINESS FOR SUCCESS - THE MARKETING PLAN - UNDERSTANDING THE MARKETPLACEMarketing plays a vital role in successful business ventures. Howwell the plan you develop markets your business, along with themanagement and financial management plans, will ultimatelydetermine your degree of success or failure. The key elements of a successful marketing plan are to 1) know your customers - their likes, dislikes and expectations, and 2) to know yourcompetitors - their strengths and weaknesses. By identifying these factors, you can develop a marketing strategy that will allow you to arouse and fulfill customers needs, better understand competitors and identify changes in the marketplace that can affect your bottom line.The purpose of the marketing plan is to define your market, i.e.,identify your customers and competitors, to outline a strategy for attracting and keeping customers and to identify and anticipate change. Your business will not succeed simply becauseyou want it to succeed. It takes careful planning and a thoroughunderstanding of the marketplace to develop a strategy that willensure success.Understanding the MarketplaceGenerally, the first and most important step in understanding themarket is to study it through market research. In the case of afranchise, the franchisor has developed a marketing program, so you will need to review the program he or she has provided. Lookover the plan to determine what product/service you will offer and write a description of it. Even though a franchisor hasdescribed your product or service, it is a good idea to develop and write your own description because this process helps you toknow your product or service-a key variable in any successfulmarketing plan. When describing your product or service outlinewhat you feel are its unique aspects, and explain how or why these aspects will appeal to customers. Emphasize the specialfeatures that you feel are its selling points. These features arewhat you will use to convince customers to purchase your product or service. Next go over sales projections, determining if there is a demandfor the product or service. In the case of a franchise, thefranchisor will have developed the projections. Study this data to see how he or she arrived at these projections. This will helpyou to better understand how the marketplace operates relative toyour product/service, and it can help you develop the skillsnecessary to identify and anticipate changes in the marketplace.Start your own file on marketplace trends. Periodically review your data, looking for shifts in the market. If changes areoccurring, you should modify the marketing plan to coincide withthese changes. In franchise operations, it is customary for thefranchisor to update the marketing plan periodically to reflectchanges in the marketplace and to keep the marketing programcurrent. A marketing plan should answer these questions:* Is this product or service in constant demand?* How many competitors provide the same product or service?* Can you create a demand for your service or product?* Can you effectively complete in price, quality and delivery?* If a franchise, will the franchisor price the product or service to give you the projected profit?Review your program to ensure that it answers these questions. Ifyour plan doesnt answer the questions, it will need to bemodified, or you will need to devise a strategy that will providea means for answering them. When you are satisfied that youunderstand the program, how the market operates and how to identify market shifts and trends, start writing the marketingsection of your business plan.Even if you adopt a marketing program that has been developedelsewhere, it is your responsibility to promote your product orservice by cultivating the marketplace, i.e., attracting andkeeping customers. You can accomplish this aim by knowing yourmarket, your customers, your competitors and your product/service. Dont rely solely on the program provided by a franchisor or others, gather and assess your own data using thetechniques outlined in your plan. By gathering and analyzing thisinformation, you will be better able to determine if your programis in line with your competitors, if it is in line with industryaverages and what adjustments you can make to improve your overall competitiveness.A sample Marketing Plan is attached as part of Appendix I. Study it carefully, then try to develop a similar program for your business plan.MARKET RESEARCHStrategies for Researching the MarketResearching your market is perhaps the easiest way to assess it.Market research does not have to be costly, nor does it have to be a complex process. It can be as simple and as easy as surveying a cross-section of your consumers (focus group) to gettheir opinions about the product or service you will be offering,or conducting a telephone or mail survey. The disadvantages ofusing the telephone or mail survey method are the individuals youcontact may not be interested in responding to a survey. Othermarket research techniques include analyzing demographic data, such as population growth/decline rate; age range, sex,income/educational level; brainstorming with family and friends,focus group interviews. Whatever method you use, your focus should be on gathering enough information to determine who yourpotential customers are-their needs, wants and expectations; ifthere is a demand for your product or service; who your competitors are and how well they are doing.Market research should answer questions such as:* Who are your customers and potential customers?* What kind of people are they?* Where do they live?* Can and will they buy the product or service youre offering?* Are you offering the kinds of goods or services they want - at the best place, the best time and best amounts?* Are your prices consistent with what the buyers view as the products values?* Are you applying the promotional programs in a way that will bring about success?* What do customers think of your franchise?* Who are your competitors?* If a franchise, how does your operation compare with the competition?While there are some disadvantages to market research-its acostly, time-consuming process, builds in biases that distortinformation, ignores answers or lets arrogance or hostility cut off communications at some point in the marketing process-theadvantages, however, outweigh the disadvantages. Dont forego this process or stop halfway because you are not getting thedesired results. This may be an indication that you are going into the wrong business or that there isnt a market for yourproduct or service. Dont be discouraged. You simply may need tomodify your original plan.A few of the benefits of market research are outlined below.* Learning who your customers are and what they want.* Learning how to reach your customer and how frequently you should try to communicate with them.* Learning which appeals are most effective and which ones arent.* Learning the relative successes of different marketing strategies in relation to their return on investment.While market research may appear to be a tedious, time-consumingprocess, it is necessary if you want to be successful. Think ofmarket research as simply a method of finding out what catchescustomers attention by observing their actions and drawingconclusions from what you see and as an organized way of findingobjective answers to questions every business owner and managermust answer in order to succeed. Market research focuses andorganizes marketing information, ensuring that it is timely andthat it provides what you need to:* reduce business risks,* spot problems and potential problems in your current market,* identify and profit from sales opportunities, and* get basic facts about your markets to help you make better decisions and set up plans of action.If viewed from this stand point, market research is an invaluabletool that can save you time, effort and money._SELF-PACED ACTIVITYDuring this activity you will answer the following questions:* Do you have a marketing plan? Yes_ No_* If yes, which elements described in pages 1-5 did you NOT include?* Have you conducted any marketing research?* If yes, how and what methods did you use?* If no, why?MARKETING YOUR BUSINESS FOR SUCCESS - WHAT DOES A MARKETING PLAN CONTAIN?Many first-time business owners think that by simply placing an ad in a local newspaper or a commercial on a radio or a television station, customers will automatically flock to purchase their product or service. This is true to a certainextent. Some people are likely to learn about your product orservice and try it, just out of curiosity. But hundreds, eventhousands, of other potential customers may never learn of yourbusiness. Just think of the money youll lose, simply because youdidnt develop an adequate marketing program!Marketing is an essential part of business operations. And, itoftentimes determines how successful your business will be. Whatyou as a potential business owner must do is maintain a thoroughunderstanding of the marketing program, and use it to extractadvantages from the marketplace. Go over the strategies andtechniques until you understand how to apply them to get theresults you desire. Remember, your aim is not only to attract andkeep a steady group of loyal customers, but also to expand yourcustomer base by identifying and attracting, new customers and toreduce risks by anticipating market shifts that can affect yourbottom line.To help you accomplish this aim, your marketing plan should include strategies typical of any marketing plan. The plan shouldespecially include what marketeers dub as the 4 Ps of Marketing(PRODUCT/SERVICE, PRICE, PLACE AND PROMOTION). Review your plan.Make certain it contains the strategies listed below, thendetermine how these strategies are applied. Include a briefexplanation for each strategy. * Describe the target market by - age - sex - profession/career - income level - educational level - residence Identify and describe your customers (target market) by their age, sex, income/educational levels, profession/career andresidence. Know your customers better than you know anyone-theirlikes, dislikes, expectations. Since you will have limitedresources target only those customers who are more likely topurchase your product or service. As your franchise grows and your customer base expands, then, you may need to considermodifying this section of the marketing plan to include othercustomers.* Identify Competition - market research data - demand for product or service - nearest direct and indirect competitors - strengths and weaknesses of competitors - assessment of how competitors businesses are doing - description of the unique features of your product or service - similarities and dissimilarities between your product or service and competitors - pricing strategy for and comparison of yours and the competitionsIdentify the five nearest direct competitors and the indirectcompetitors. Start a file on each identifying their weaknesses and strengths. Keep files on their advertising and promotionalmaterials and their pricing strategies. Review these filesperiodically determining when and how often they advertise, sponsor promotions and offer sales.* Describe Product/Service - describe your product or serviceTry to describe the benefits of your goods or services from yourcustomers perspective. Emphasize its special features-i.e., theselling points. Successful business owners know or at least have an idea of what their customers what or expect from them. This type of anticipation can be helpful in building customersatisfaction and loyalty.* Develop Marketing Budget - advertising and promotional plan - costs allocated for advertising and promotions - advertising and promotional materials - list of advertising media to be usedOperating an effective marketing plan requires money, so you willhave to allocate funds from your operating budget to coveradvertising, promotional and all other costs associated withmarketing. Develop a marketing budget based on the cost for themedia you will use, and the cost for collecting research data andmonitoring shifts in the marketplace. * Describe Location (Place) - description of the location - advantages and disadvantages of locationAgain, try to describe the location of your business from yourcustomers perspective. Describe its assets - i.e., theconvenience, whether or not public transportation is accessible,the safety aspects-street lighting, well lit parking lot orfacility, decor, etc. Your location should be built around yourcustomers, it should be accessible and should provide a sense ofsecurity. An advantage of purchasing a franchise is the franchisor oftentimes assist in site selection and decorating. * Develop Pricing strategy - pricing techniques and brief description of these techniques - retail costing and pricing - competitive position - pricing below competition - pricing above competition - price lining - multiple pricing - service costs and pricing (for service businesses only) - service components - material costs - labor costs - overhead costsAlthough your pricing strategy may be based on the strategy devised by others, you should study this plan and the strategiesused by competitors. That way you will acquire a thoroughunderstanding of how to price your product or service, and you can determine if your prices are in line with competitors, if they are in line with industry averages and what adjustments youcan make to bring them in line.The key to success is to have an well-planned strategy, toestablish your policies and to constantly monitor prices andoperating costs to ensure profits. Keep abreast of changes in themarketplace because these changes can affect your bottom line.* Develop an effective Promotional Strategy - advertising media - print media (newspaper, magazine, classified ads, Yellow Pages advertising, brochure) - radio - television - networking - business cards - tee shirts, hats, buttons, pensDevelop a promotional strategy that uses various media forpromoting your business. Monitor the different media identifyingthose that most effectively promote your business. Concentrate ondeveloping material for these formats that clearly identifies your goods or services, its location and price.Since financial institutions weigh the soundness of your marketing plan when deciding whether your business is a good riskfor their money, it is important that you prepare and presentcredible market data that shows there is a need in the communityfor your business and that demonstrates your ability to competesuccessfully._SELF-PACED ACTIVITYDuring this activity you will: * Make an outline of the information a marketing plan should contain. MARKETING YOUR BUSINESS FOR SUCCESS - THE MARKETING PLAN: ITS ADVANTAGESAND DISADVANTAGESA well-written, comprehensive marketing plan is the focal point of all business ventures because it describes how you plan toattract and retain customers-the most crucial aspect of abusiness. And why are customers so important? The answer is simple. They ultimately are the means by which you will generatethe income needed for daily operations, to repay debts and to turn a profit. In essence, the customers are your life line and the marketing plan is the pipeline that allows you access to them - i.e., to fulfill their needs and expectations. The marketing plan is essential
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