Business Marketing

Welcome to this sixth module, where we will spend time researching, formulating and implementing your marketing plan to get your proposition out into the market place and convert sales opportunities into purchasers and advocates

Tackle the module in bite size chunks, don’t feel the need to do everything in one go and allow plenty of time to digest and apply the information covered

The module includes helpful ‘Activities’ for you to complete, it is strongly recommended that you undertake them to get the most out of the content and the key learning points

Allow yourself time to reflect and take on board the advice, key messages and suggested tasks in the programme to enable you to move forward with your self-employed campaign

This module will enable you to

Consider and set out what your marketing strategy is going to be

Understand and segment your customers and their needs better

Research and understand your target markets and main competitors

Identify your competitors’ key strengths, weaknesses and differentiators

Undertake a SWOT analysis of yourself and your business and use it effectively

Establish how, where and when you will be advertising your proposition or using PR

Consider, formulate and implement your growth plans for the business

Draft and begin implementing a relevant and effective marketing plan for your business

Your marketing strategy will be built around your marketing mix, consisting of four elements, known as the four Ps, sometimes also called the four Cs

Product = Customer solution
In the previous module 5 we looked in some detail at your offering and value proposition

Price = Customer cost
In the previous module we also looked at key pricing principles, options and models

Place = Customer convenience
We’ll look at distribution channels or ‘where you sell’ in more detail shortly in this module

Promotion = Customer communication
Your selling, advertising and PR will also be examined below in this module

Before we consider and pull these strands together we need to look at a few subject areas with the key starting point being your market research

Key areas of market research will include your

Customers

Who are they?
Where are they?
What are their needs?

Competitors

Who are they?
What are their strengths and weaknesses?
What are their differentiators?

Pricing

What are your competitors’ prices?
How do they arrive at their price points?
What method of pricing are they using?

Lets have a closer look at each of these areas

Identifying your target markets involves establishing facts and trends, not intuitive guessing

The two main ways of researching and finding out about your customers are

Passive research

Relevant industry associations, trade reports, trade publications and magazines

Related government departments, local authorities and non-governmental agencies

Much online info is free to access, but some may require membership or other costs

Only pay for databases if you are sure that they represent value for money

Searching Google with key words and phrases can provide lots of useful info

LinkedIn and Facebook can also enable you to glean helpful customer trends

Active research

Talking to a representative sample of potential customers about their needs

Surveys of your target customers to establish the potential market size and needs

‘Survey Monkey’ and other similar platforms offer cheap and easy to use tools

It can be useful to break down your potential market into identifiable segments or groups

Especially if you have limited resources and need to focus in on your most profitable targets

Market segmentation can enable you to

Identify groups of customers with similar needs and buying habits to target accordingly

Spot the most profitable groups and focus on them with the most appropriate offerings

Ensure that your selected segments have identifiable buying patterns, don’t just assume

The key segmentation questions for you include

Is the segment and its needs and buying habits clearly identifiable and consistent?

What is the size of the segment and how much of it can I reach?

Can I create a marketing plan that will convert the segments into sales?

Does the segment fit in well with my offering and available resources?

Where selling to consumers (i.e. not businesses) markets can be segmented four ways

Behaviourally – e.g. buying/spending/usage habits, loyalty, risk taking

Psychologically – e.g. lifestyle, emotions, values, attitudes, beliefs

Demographically – e.g. age, gender, ethnicity, income, occupation

Geographically – e.g. physical location, seasonal factors, population density

Where selling to businesses and organisations, markets are often segmented in three ways

Needs based – e.g. supply chains requirements, cost base or specification issues

Tiering – e.g. categorising by their value to you, by the ease of sale, by longevity

Firm based – e.g. size, geographical spread, shared characteristics, demography

Your competitors will generally fall into two categories

Direct competitors who

Offer products or services that could replace yours

Seek to offer the same or a similar solution

Compete with you for your customers

e.g. McDonald’s and Burger King compete directly for each other’s hungry customers or B & Q who compete directly with Homebase for DIY customers

Indirect competitors who

Offer products or services that satisfy the same need

Seek to offer an alternative solution

Compete with you for the same market

e.g. McDonald’s and Domino’s Pizza compete indirectly in the takeaway market or B & Q who compete indirectly with local trades people to complete customer home repairs or improvements

Pricing is frequently one of the main competitor threats that business's identify

Understanding what your competitors pricing is, and how they arrive at it, is valuable info

You may be in markets where pricing is publicly and readily available, in which case

Online and ‘on foot’ research will enable you to establish the pricing you are up against

By tracking price changes you can work out what their pricing strategy seems to be

You can then use this info to help you enhance and shape your own pricing strategy

Alternatively, you may be in markets where pricing is kept confidential, in which case

You or somebody else could undertake some ‘mystery shopping’ to identify their pricing

You could talk to people in your network who know your competitors and their pricing

If appropriate, you could offer price matching/bettering to customers to gain price info

Having looked earlier at your competitors’ strengths and weaknesses, we now need to look at understand and manage yours

It is crucial to forming your marketing strategy that you have self awareness about your

Strengths and Weaknesses

Depending on circumstances, sometimes strengths can become weaknesses
Similarly, changing situations can sometimes turn weaknesses into strengths

Opportunities

What opportunities you foresee in your chosen markets?
The opportunities to pursue are the ones that can be converted to sales

Threats

What threats you face that need avoiding or managing?
If you can’t side step a threat then you will need to contain it

‘Place’ or ‘customer convenience’ or ‘channels of distribution’ are all the different ways to describe the same thing i.e. the various places or ways that you get your offering to your customers

The four broad distribution channels when selling to consumers or businesses are

Direct selling – you and your business interacting with end user customers

Selling through retailers – distributing via organisations that then on-sell to end users

Selling via wholesalers – distributing via organisations that then on-sell to retailers

Selling through agents – via third parties e.g. franchisees, intermediaries, brokers etc

The specific ‘place’ or ‘places’ may, for example, include

Static shops, pop-up shops, franchise shops, market stalls or other shopping outlets

Fixed office locations, flexible/serviced offices, home office or other physical venues

Your own bespoke website, or as a partner or associate on third party websites

e-commerce online websites e.g. Amazon, e-Bay, Wayfair, Alibaba, Etsy and many more

The key purpose of advertising spend is to significantly increase the number and quality of sales opportunities that, hopefully, can then be converted into buying customers

The key purpose of PR (public relations) spend is to tangibly increase the positive awareness of your business in your target markets and sectors and thereby to, hopefully, measurably increase yours sales conversion rate

Your sales conversion rate is the percentage of times that you convert a sales opportunity into an actual sale e.g. if you have 10 sales opportunities and convert 4 of them into an actual sale, then you sales conversion rate is 40%

Whether or not advertising and/or PR are helpful activities for you to undertake will depend on numerous factors such as

Who your target markets and sectors are

What your competitors are doing and why

How it fits in with your brand and offering

What you can afford to spend and for how long

What else you could spend money on to generate sales

Whether your current sales conversion rate need improving

Whether your sales conversion rate can be improved

Let’s have a look at your potential routes forward in relation to adverts and PR by looking at some key questions and issues and also by undertaking some essential activities

Your competitors, their propositions and the markets you compete in will not remain static, over time they will change, develop, grow, shrink, redefine and shift

If your proposition and your business remain static then

Relative to your competitors and the markets you are in, you will almost certainly be going backwards in one or more ways

Your lack of flexibility, agility and creativity is highly likely to render you and your business unresponsive to future threats and opportunities

So thought needs to be invested in deciding what your growth plans are (and how you are going to implement them) in relation to your offerings, markets and sales

Let’s look at the potential growth of your offerings and markets first before looking at the issue of sales growth

As you will see from the diagram below, your growth strategy can go in four different directions

They are not mutually exclusive, however, each one would need it’s own specific and different growth strategy

Whatever your preferred growth strategy is, once you are up and running and staring to sell, you will need start thinking about how you are going to allocate your sales and marketing resources to best effect, particularly as you grow

Your offering will include one or more distinct income streams of products and/or services that relate to one or more specific markets you are seeking to exploit

For example, you might have four distinct income streams

Selling product ‘A’ to consumers
Selling product ‘B’ to wholesalers
Selling product ‘C’ to commercial businesses
Selling product ‘D’ to charities

The key question from the above example is, what is the basis on which you decide how to allocate your sales and marketing resources across the four products ‘A’, ‘B’, ‘C’ and ‘D’?

A helpful way of thinking about your products or services and beginning to answer this key question is in terms of their market growth potential and your market share as shown in the diagram below

For each of these above four quadrants, the implications for the allocation of your sales and marketing resources include

Super Stars

The income generated and potential for growth is crucial to your business
Your competitors will be working hard to gain a share of the growing market
You need to expend whatever is needed to protect and grow your market share

Cash Cows

The income generated is financially important to you, but won’t grow much further
Competitors will only be interested if they think they can capture your customers
Sales and marketing spend need to focus purely on retaining existing customers

Potential Gems

While the income currently generated is small, the growth potential is significant
Growth will be via winning your competitors’ customers plus ‘green field’ customers
Only invest sales and marketing resources if you believe it'll grow into a ‘Super Star’

Probable Dogs

The current income and growth potential are low, so sales generation will be modest
Only worth investing sales and marketing resources if it becomes a ‘Cash Cow’
If this is unlikely, then no sales and marketing resources should be invested

This module has enabled you to

Understand and define what the four Ps (or four Cs) mean for your offering

Identify who your customers are, where they are and what their needs are

Assess your key competitors’ strengths, weaknesses and differentiators

Research and respond to your competitors’ price points and pricing strategy

Analyse your skills, strengths, opportunities and threats and how to manage them

Confidently prepare and begin implementing an effective marketing strategy

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