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Marketing Basics |
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To succeed, entrepreneurs must
attract and retain a growing base of satisfied customers. Marketing programs,
though widely varied, are all aimed at convincing people to try out or keep
using particular products or services. Business owners should carefully plan
their marketing strategies and performance to keep their market presence
strong. |
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What is Marketing? |
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Marketing is based on the
importance of customers to a business and has two important principles: 1. All company policies and
activities should be directed toward satisfying customer needs.
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Market Research |
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Successful marketing requires
timely and relevant market information. An inexpensive research program,
based on questionnaires given to current or prospective customers, can often
uncover dissatisfaction or possible new products or services. Market research will also identify
trends that affect sales and profitability. Population shifts, legal
developments, and the local economic situation should be monitored to quickly
identify problems and opportunities. It is also important to keep up with
competitors' market strategies. |
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Marketing Strategy |
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A marketing strategy identifies
customer groups which a particular business can better serve than its target
competitors, and tailors product offerings, prices, distribution, promotional
efforts, and services toward those market segments. Ideally, the strategy
should address unmet customer needs that offer adequate potential
profitability. A good strategy helps a business focus on the target markets
it can serve best. |
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Target Marketing |
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Owners of small businesses usually
have limited resources to spend on marketing. Concentrating their efforts on
one or a few key market segments - target marketing - gets the most return
from small investments. There are two methods used to segment a market: 1. Geographical segmentation -
Specializing in serving the needs of customers in a particular geographical
area. For example, a neighborhood convenience store may send advertisements
only to people living within one-half mile of the store. Every marketing program contains
four key components:
These are combined into an overall
marketing program. Products and Services - Product strategies may include
concentrating on a narrow product line, developing a highly specialized
product or service, or providing a product-service package containing
unusually high-quality service. Promotion - Promotion strategies include
advertising and direct customer interaction. Good salesmanship is essential
for small businesses because of their limited ability to spend on
advertising. Good telphone book advertising is also important. Direct mail is
an effective, low-cost medium available to small business. Price - The right price is crucial for
maximizing total revenue. Generally, higher prices mean lower volume and
vice-versa; however, small businesses can often command higher prices because
of their personalized service. Distribution - The manufacturer and wholesaler
must decide how to distribute their products. Working through established
distributors or manufacturers' agents generally is easiest for small
manufacturers. Small retailers should consider cost and traffic flow in site
selection, especially since advertising and rent can be reciprocal: A
low-cost, low-traffic location means spending more on advertising to build
traffic. The nature of the product or
service is also important in siting decisions. If purchases are based largely
on impulse, then high traffic and visibility are critical. On the other hand,
location is less a concern for products or services that customers are
willing to go out of their way to find. The recent availability of highly segmented
mailing lists, purchased from list brokers, magazines, or other companies,
has enabled certain small businesses to operate from any location yet serve
national or international markets. |
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Marketing Performance |
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After implementing a marketing program,
entrepreneurs must evaluate its performance. Every program should have
performance standards to compare with actual results. Researching industry
norms and past performance will help to develop appropriate standards. Entrepreneurs should audit their
company's performance at least quarterly. The key questions are: 1. Is the company doing all it can
to be customer-oriented? |