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MARKETING YOUR BUSINESS FOR SUCCESS

WORKSHOP INTRODUCTION

MARKETING YOUR BUSINESS FOR SUCCESS WORKBOOK

Training ModuleIdentify strategies for conducting market research Target market Product/service Location Promotional strategy

* List disadvantages of developing a marketing plan

* Prepare a marketing plan outline

* Develop an effective marketing strategy Promotional strategy

MARKETING YOUR BUSINESS FOR SUCCESSUNDERSTANDING THE MARKETPLACE

Marketing plays a vital role in succeful busine ventures.How well the plan you develop markets your busine, along with the management and financial management plans, will ultimately determine your degree of succe or failure.The key elements of a succeful marketing plan are to 1)know your customers--their likes, dislikes and expectations, and 2)to know your competitors--their strengths and weaknees.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 busine will not succeed simply because you want it to succeed.It takes careful planning and a thorough understanding of the marketplace to develop a strategy that will ensure succe.Understanding the Marketplace

Generally, the first and most important step in understanding the market is to study it through market research.In the case of a franchise, the franchisor has developed a marketing program, so you will need to review the program he or she has provided.Look over the plan to determine what product/service you will offer and write a description of it.Even though a franchisor has described your product or service, it is a good idea to develop and write your own description because this proce helps you to know your product or service--a key variable in any succeful marketing plan.When describing your product or service outline what you feel are its unique aspects, and explain how or why these aspects will appeal to customers.Emphasize the special features that you feel are its selling points.These features are what you will use to convince customers to purchase your product or service.Next go over sales projections, determining if there is a demand for the product or service.In the case of a franchise, the franchisor will have developed the projections.Study this data to see how he or she arrived at these projections.This will help you to better understand how the marketplace operates relative to your product/service, and it can help you develop the skills neceary 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 are occurring, you should modify the marketing plan to coincide with these changes.In franchise operations, it is customary for the franchisor to update the marketing plan periodically to reflect changes in the marketplace and to keep the marketing program current.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.If your plan doesn't answer the questions, it will need to be modified, or you will need to devise a strategy that will provide a means for answering them.When you are satisfied that you understand the program, how the market operates and how to identify market shifts and trends, start writing the marketing section of your busine plan.Even if you adopt a marketing program that has been developed elsewhere, it is your responsibility to promote your product or service by cultivating the marketplace, i.e., attracting and keeping customers.You can accomplish this aim by knowing your market, your customers, your competitors and your product/ service.Don't rely solely on the program provided by a franchisor or others, gather and ae your own data using the techniques outlined in your plan.By gathering and analyzing this information, you will be better able to determine if your program is in line with your competitors, if it is in line with industry averages and what adjustments you can make to improve your overall competitivene.A sample “Marketing Plan” is attached as part of Appendix I.Study it carefully, then try to develop a similar program for your busine plan.MARKET RESEARCH

Strategies for Researching the Market

Researching your market is perhaps the easiest way to ae it.Market research does not have to be costly, nor does it have to be a complex proce.It can be as simple and as easy as surveying a cro-section of your consumers(focus group)to get their opinions about the product or service you will be offering, or conducting a telephone or mail survey.The disadvantages of using the telephone or mail survey method are the individuals you contact may not be interested in responding to a survey.Other market 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 your potential customers are--their needs, wants and expectations;if there 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 you're 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 succe? * 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--it's a costly, time-consuming proce, builds in biases that distort information, ignores answers or lets arrogance or hostility cut off communications at some point in the marketing proce--the advantages, however, outweigh the disadvantages.Don't forego this proce or stop halfway because you are not getting the desired results.This may be an indication that you are going into the wrong busine or that there isn't a market for your product or service.Don't be discouraged.You simply may need to modify 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 aren't.* Learning the relative succees of different marketing strategies in relation to their return on investment.While market research may appear to be a tedious, time-consuming proce, it is neceary if you want to be succeful.Think of market research as simply a method of finding out what catches customers' attention by observing their actions and drawing conclusions from what you see and as an organized way of finding objective answers to questions every busine owner and manager must answer in order to succeed.Market research focuses and organizes marketing information, ensuring that it is timely and that it provides what you need to:

* reduce busine 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 invaluable tool that can save you time, effort and money._________________________________________________________________

SELF-PACED ACTIVITY

During 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 SUCCESSage profeion/career educational level market research data nearest direct and indirect competitors aement of how competitors businees are doing similarities and diimilarities between your product or service and competitor's describe your product or service

Try to describe the benefits of your goods or services from your customer's perspective.Emphasize its special features--i.e., the selling points.Succeful busine 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 customer satisfaction and loyalty.* Develop Marketing Budget costs allocated for advertising and promotions list of advertising media to be used

Operating an effective marketing plan requires money, so you will have to allocate funds from your operating budget to cover advertising, promotional and all other costs aociated with marketing.Develop a marketing budget based on the cost for the media you will use, and the cost for collecting research data and monitoring shifts in the marketplace.* Describe Location(Place)advantages and disadvantages of location

Again, try to describe the location of your busine from your customer's perspective.Describe its aets--i.e., the convenience, whether or not public transportation is acceible, the safety aspects--street lighting, well lit parking lot or facility, decor, etc.Your location should be built around your customers, it should be acceible and should provide a sense of security.An advantage of purchasing a franchise is the franchisor oftentimes aist in site selection and decorating.* Develop Pricing strategy retail costing and pricing pricing below competition price lining service costs and pricing(for service businees only)material costs overhead costs

Although your pricing strategy may be based on the strategy devised by others, you should study this plan and the strategies used by competitors.That way you will acquire a thorough understanding 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 you can make to bring them in line.The key to succe is to have an well-planned strategy, to establish your policies and to constantly monitor prices and operating costs to ensure profits.Keep abreast of changes in the marketplace because these changes can affect your bottom line.* Develop an effective Promotional Strategy

print media(newspaper, magazine, claified ads, Yellow Pages advertising, brochure)television busine cards THE MARKETING PLAN: ITS ADVANTAGES AND DISADVANTAGES

A well-written, comprehensive marketing plan is the focal point of all busine ventures because it describes how you plan to attract and retain customers--the most crucial aspect of a busine.And why are customers so important? The answer is simple.They ultimately are the means by which you will generate the income needed for daily operations, to repay debts and to turn a profit.In eence, the customers are your life line and the marketing plan is the pipeline that allows you acce to them--i.e., to fulfill their needs and expectations.The marketing plan is eential to any succeful busine.It is the heart of the busine, the basis from which all other operational and management plans are derived.Marketing offers you a wealth of information that if applied correctly virtually can ensure your succe.Therefore, it is important that you, as a first-time busine owner, develop a comprehensive, effective marketing plan.If you need aistance in accomplishing this task, contact your local SBA office.Consult the local telephone directory under “U.S.Government” for the telephone number and addre of the office nearest you.Advantages/Disadvantages of Developing a Marketing Plan An effective marketing plan will certainly boost your sales and increase your profit margins, which is the goal of every busine owner.It is a milepost down the road to succe and, as such, care and time should be put into its development.You must be able to convince customers that you have the best product or service for them at the best poible price.If you cannot convince potential customers of this, then you are wasting your time and money.This is where the marketing plan comes into play, and this is why it is so important.There are numerous advantages you can extract from the marketplace if you know how.And the marketing plan is an excellent tool for identifying and developing strategies for extracting these advantages.A few of the advantages are outlined below.The plan:

* identifies needs and wants of consumers * determines demand for product or service * aids in design of products/services that fulfill consumers needs * outlines measures for generating the cash for daily operation, to repay debts and to turn a profit * identifies competitors and analyzes your firm's competitive advantage * identifies new product/service areas * identifies new and/or potential customers * allows for test to see if strategies are giving the desired results.Some of the disadvantages of the market plan are:

* identifies weaknees in your busine skills * leads to faulty marketing decisions based on improperly analyzed data * creates unrealistic financial projections if information is interpreted incorrectly * identifies weaknees in your overall busine plan

The marketing plan offers numerous advantages;however, as you can see, there can be drawbacks.Remember, however, the advantages outweigh the drawbacks, so seek profeional aistance when you are developing the marketing section of your busine plan.It will be worth the investment.__________________________________________________________________

SELF-PACED ACTIVITY

During this activity you will:

* Identify and list the advantages and disadvantages of developing a marketing plan.MARKETING YOUR BUSINESS FOR SUCCESSage profeion educational level market research data nearest direct and indirect competitors aement of how competitors businees are doing similarities and diimilarities between your product or service and competitors

III.Description of Product or Service emphasize special features, i.e., the selling points

IV.Marketing Budget costs allocated for advertising and promotions list of advertising media to be used and an estimate of cost for each medium

V.Description of Location advantages and disadvantages of location

VI.Pricing Strategy retail costing and pricing pricing below competition price lining service components labor costs DEVELOPING AN EFFECTIVE MARKETING STRATEGY

An advantage of purchasing a franchise is that the marketing plan is provided by the franchisor.While this saves you the time and energy it takes putting together a marketing program, it doesn't, however, ensure that you will attract customers to your franchise.How well your advertisements and promotions draw customers will ultimately determine how effective your marketing strategy is.While a reputable franchisor will not sell you a franchise in a territory where there is not a market, or where the market is declining, it is your responsibility to cultivate your designated market.Whether you are independent or a franchise, one of the easiest ways to do this is through advertising and promotions.Remember the aim of the advertising and promotional strategy is to create awarene of your product or service, to arouse customers' needs and expectations to the point of consumption and to create a loyal stream of satisfied customers who continue to patronize your busine.Effective Advertising and Promotions Techniques

Perhaps, the first step in developing an effective advertising and promotional strategy is to understand the difference between the two concepts.Most people think that advertising and promotions are one in the same;there is, however, a distinction between the two.While both advertising and promotions use the different media formats--print, radio and television--as a way of conveying a meage, promotion encompaes much more.It is the method of advertising and can entail community involvement.This could mean sponsoring a Boy or Girl Scout troop, allowing non-profit organizations to use your facility, such as, letting the high school drama club use your parking lot for a car wash fund raiser, sending an underprivileged child to day camp or involvement in any type of positive community activity that will bring attention to your busine.While advertising is a way of keeping your busine is the public's eye, promotions are a way of signaling that you are concerned and committed to the welfare of the community and its residents.This commitment may be one of the most effective techniques for building customer loyalty.People tend to be more supportive of businees and organizations that give something to the community rather than those that just take from the community, never giving anything in return.Now, let's look at how to develop an effective advertising program and promotional program for your busine.The Key to a Succeful Advertising and Promotional Plan

Advertising

Advertising plays an important role in succeful busine ventures.It entails identifying and selecting the media that provide the greatest amount of exposure for your busine and developing effective, yet appropriate materials for each medium.It is more than running an ad in a local newspaper, on a radio or television station or just simply hanging a sign outside your busine and waiting for the customers to purchase your product or service.It requires that you know your product or service--that is, the selling points--and that you develop literature that can arouse the customers' consciousne levels to the point that they are curious enough to investigate it, and then raises their need or desire levels to the point that they are willing to purchase it.Advertising keeps your product or service in the public's eye by creating a sense of awarene.Yet this awarene alone will not ensure the succe of your busine.Thus, advertising not only has to be effective, it also has to be a continuous proce.When developing an effective advertising strategy for a franchise, review the national advertising materials the franchisor has developed and determine if they can be applied regionally or locally.If they can, select the media that will provide the greatest amount of exposure and the most effective means for promoting your franchise.If the national materials are inappropriate, you may need to modify or develop your own materials.Remember, however, that you may have to get the franchisor's approval to use these materials.As a courtesy, regardle of the advertising policies in the franchise agreement, allow the franchisor to review these materials.Once you are satisfied with the advertising materials, select the media that will best market your busine.Since advertising can be costly, try to use a medium that is cost effective, yet will effectively market your busine.If this is not poible, then be prepared to spend what is neceary to promote your busine effectively--the outcome will be worth the investment.It may be a good idea to mix the different media formats that you use.For example, design a brochure that describes your product or service, emphasizing its selling points(special features).Place copies of the brochure in strategic locations of your busine to use as customer handouts.Or, devise a customer survey.The survey should focus on whether customers like the product or service, the quality of the product/service, ways to improve it, the quality of service provided by staff--their friendline and courtesy.Place the survey with a self-addreed, stamped envelope near the check-out counter and ask customers to mail in or return the survey when they come back.Review their comments with staff and implement those suggestions that are practical, cost efficient and can improve the overall quality of service your busine provides.Other media formats to use are:

* newspaper, radio or television ads(newspaper advertising is the least expensive and television advertising is the most expensive of these formats).You probably will need profeional advice and aistance when developing ads for these media formats.* busine cards.* claified ads in the local newspaper.* direct marketing.* telemarketing(this format can be expensive, also).* Yellow Pages advertising.* samplingAPPENDIX IADVERTISING/PROMOTIONAL STRATEGIC MIX

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THE ENTREPRENEUR'S MARKETING PLAN

This is the marketing plan of_____________________________________

I.MARKET ANALYSIS

A.Target MarketMARKET MIX

A.Image

1.First, what kind of image do we want to have(such as cheap but good, or exclusivene, or customer-oriented, or highest quality, or convenience, or speed, or...)?

______________________________________________________

B.Features

1.List the features we will emphasize:

a.___________________________________________________

b.___________________________________________________

c.___________________________________________________

C.Pricing

1.We will be using the following pricing strategy:

a.Markup on cost ____ What % markup? ______

b.Suggested price ____

c.Competitive ____

d.Below competition ____

e.Premium price ____

f.Other ____

2.Are our prices in line with our image?

YES___ NO___

3.Do our prices cover costs and leave a margin of profit?

YES___ NO___

D.Customer Services

1.List the customer services we provide:

a.____________________________________________

b.____________________________________________

c.____________________________________________

2.These are our sales/credit terms:

a._____________________________________________

b._____________________________________________

c._____________________________________________

3.The competition offers the following services:

a.______________________________________________

b.______________________________________________

c.______________________________________________

E.Advertising/Promotion

1.These are the things we wish to say about the busine:

______________________________________________________

______________________________________________________

______________________________________________________

2.We will use the following advertising/promotion sources:

1.Television ________ 2.Radio ________ 3.Direct mail ________ 4.Personal contacts ________ 5.Trade aociations ________ 6.Newspaper ________ 7.Magazines ________ 8.Yellow Pages ________ 9.Billboard ________ 10.Other___________ ________

3.The following are the reasons why we consider the media we have chosen to be the most effective:

_______________________________________________________

_______________________________________________________

_______________________________________________________

MARKETING YOUR BUSINESS FOR SUCCESSPRICE / QUALITY MATRIX SALES APPEALS

PRICE/QUALITY HIGH MEDIUM LOW

HIGH “Rolls Royce” “We Try Harder” “Best Buy” Strategy Strategy Strategy

MEDIUM “Out Performs” “Piece of the Rock” “Smart Shopper” Strategy Strategy Strategy

LOW “Feature Packed” “Keeps on Ticking” “Bargain Strategy Strategy Hunter” Strategy

MARKETING YOUR BUSINESS FOR SUCCESSMARKETING TIPS, TRICKS & TRAPS

1.Marketing Steps * Claifying Your Customers' Needs * Targeting Your Customer(s)* Examining Your “Niche” * Identifying Your Competitors * Aeing and Managing Your Available Resources

Human Production

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NOTES AND STRATEGIES FOR YOUR BUSINESS

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MARKETING TIPS, TRICKS & TRAPS

2.Marketing Positioning

* Follower versus Leader * Quality versus Price * Innovator versus Adaptor * Customer versus Product * International versus Domestic * Private Sector versus Government

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NOTES AND STRATEGIES FOR YOUR BUSINESS

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MARKETING TIPS, TRICKS & TRAPS

3.Sales Strategy

* Use Customer-Oriented Selling Approachby agreeing to discu what the customer wants to achieve.* Phase Two: Determine Customer Objective and Situational Factorsby agreeing that using your product/ service will indeed achieve what customer wants.* Phase Four: Obtaining Customer Commitment-By agreeing that the customer will acquire your product/service.* Emphasize Customer Advantage

Must be Read: When a competitive advantage can not be demonstrated, it will not translate into a benefit.Must be Important to the Customer: When the perception of competitive advantage varies between supplier and customer, the customer wins.Must be Specific: When a competitive advantage lacks specificity, it translates into mere puffery and is ignored.Must be Promotable: When a competitive advantage is proven, it is eential that your customer know it, lest it not exist at all._________________________________________________________________

NOTES AND STRATEGIES FOR YOUR BUSINESS

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MARKETING TIPS, TRICKS & TRAPS

4.Benefits vs.Features

* The six “O's” of organizing Customer Buying Behavior

ORIGINS of purchase: Who buys it? OBJECTIVES of purchase: What do they need/buy? OCCASIONS of purchase: When do they buy it? OUTLETS of purchase: Where do they buy it? OBJECTIVES of purchase: Why do they buy it? OPERATIONS of purchase: How do they buy it?

* Convert features to benefits using the “...Which Means...” Transition

* Sales Maxim: “Unle the proposition appeals to their INTEREST, unle it satisfies their DESIRES, and unle it shows them a GAIN--then they will not buy!”

* Quality Customer Leads: Level of need Ability to pay Authority to pay Acceibility Sympathetic attitude Busine history One-source buyer Reputation(price or quality buyer)

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NOTES AND STRATEGIES FOR YOUR BUSINESS

_________________________________________________________________ CONVERT FEATURES INTO BENEFITS--THE “...WHICH MEANS...” TRANSITION

FEATURES “WHICH MEANS” BENEFITS

Performance Time Saved Reputation Reduced Cost Components Prestige Colors Bigger Savings Sizes Greater Profits Exclusive Greater Convenience Uses Uniform Production Applications Uniform Accuracy Ruggedne Continuous Output Delivery Leadership Service Increased Sales Price Economy of Use Design Ease of Use Availability Reduced Inventory Installation Low Operating Cost Promotion Simplicity Lab Tests Reduced Upkeep Terms Reduced Waste Workmanship Long Life

BUYING MOTIVES RATIONAL EMOTIONAL

Economy of Purchase Pride of Appearance Economy of Use Pride of Ownership Efficient Profits Desire of Prestige Increased Profits Desire for Recognition Durability Desire to Imitate Accurate Performance Desire for Variety Labor-Saving Safety Time-Saving Fear Simple Construction Desire to Create Simple Operation Desire for Security Ease of Repair Convenience Ease of Installation Desire to Be Unique Space-Saving Curiosity Increased Production Availability Complete Servicing Good Workmanship Low Maintenance Thorough Research Desire to be Unique Curiosity