Marketing Building a strong foundation for success

Discussion Questions What is marketing? How is marketing different from sales?

Definitions l l Marketing is generating leads for sales Sales is turning leads into customers

Marketing Questions l l l Who is your customer? Who is your competition? What is your environment? Where will you locate? What will you charge? How will you sell/distribute?

The Marketing Triangle Customer You Competition Market demand | Pricing | Distribution | Publicity | Location

Your Customer l l l Who is your current customer Who is your ideal customer Where is your customer When does he/she buy How many customers are there

Your Environment l l l l What is the demand/need for your P/S? How established is your market? How saturated is your market? What are the barriers to entry? What seasonality issues exist? How price sensitive is your market? What are the market trends?

Know thy Customer Your customers are your best source of market research. Learn everything you can about them and record it. Then … Segment – Segment - Segment

Segment your market Demographics Psychographics Biz to Biz Age Sex Education Income Race Marital status Location Car/house owner Life style choices Personal interests Likes and dislikes Magazine readership Travel interests Hobbies Health Fashion preference NAICS / SIC Number of employees Type of business Annual Income Public/private Job title

North American Industry Classification System (NAICS) l l Replaced the Standard Industrial Classification System (SIC Codes) Developed by US, Canada, and Mexico Fore example: 236118 Residential Remodelers North American Product Classification System

Customer Database l l l Build a database of all your customers Record every phone call Record every transaction Record profile and segment data Differentiate them by needs and value Rank by frequency and money spent

Customer Profitability l l Not all customers are equal Some are a pain-in-the-neck Some are expensive And some are highly profitable Choose your customers wisely!

Discussion Question What is competitive analysis?

Competitive Analysis l l l l Who are they? Where are they? How many are there? What are their strengths and weaknesses? Why you and not them - differentiation? Who are their customers? What are the barriers to entry? What do they charge?

Discussion Question Where do you get competitor information?

Sources of competitor information l l l Internet Yellow Pages Personal visits to offices and facilities Advertising Customers – past and current Speeches and presentations Tradeshows and professional conferences Articles in newspapers and magazines Market research firms Company brochures Computer databases like Dun and Bradstreet Libraries

Competitive Analysis Grid You Annual Sales Employees Web Page Price Strengths Weaknesses Comp 1 Comp 3

Competitive Space Analysis Strong Feature A Weak Strong Feature B

Sailboat Rigger Strong Traditional Boats ( vs. Modern) Weak Strong Cruising (offshore) (vs. Racing)

Discussion Question How do you set a price for your product or service?

Setting your Pricing l l l l Comparables / Competition Value to customer Breakeven analysis Desired profit margin Market differentiation Price versus volume Price versus quality

Price versus Volume Low Volume High Volume Low Price DEATH Very Difficult High Price Sweet spot for Small Business High distribution And support cost

Price versus Quality Low Quality High Quality Low Price Economy Difficult Penetration Difficult long term High Price Skimming Doomed Premium Ideal for Small Biz

Discussion Question How will you become known to your customers?

Exposure/Promotion Alternatives l l l l Word of mouth - viral Web page – number one Business Cards – a must, simple, web address Signs – shop, auto, anywhere you can Brochures – may only need the internet Direct mail – better, more targeted, expensive Door-to-door – in certain situations Advertising – expensive, difficult to measure

If must advertise… Two most important words: l l Testing Repetition

Free Publicity l l l l Notoriety, word of mouth, reputation Articles by or about you Press releases PSA (Public Service Announcements) Seminars/lectures/demonstrations Referrals/rumors/epidemics Trade associations

Trade Associations l l l Join your trade association Take a leadership position Subscribe to professional magazines Speak at conferences Write articles

Tipping Point - Gladwell l l Successful marketing is like a contagious disease – An epidemic Law of the Few Changes/growth happens fast Power of Context

Branding and Image l l l Business name Dress/uniforms/appearance Logo Slogans Office/store front/location

Discussion Question What makes a good name?

Business Name “…ables” l l l Expandable/Scaleable – grow with business Web-able – works web address and for email Memorable – does not have to be descriptive Saleable – adds value when you sell business Understandable – easy to say, spell, pronounce, remember, unique Applicable - appropriate for business type

Use of Personal Names l l l Lawyers Doctors Consultants Engineers Contractors Designers Pros l. Builds prof rep l. Traditional l. Ego gratifying Cons l. Limiting in Scope l. You may not want to sell it l. Diff to spell or pronounce l. Too common l. Prob w star empl

Web Names – Phone number of the future l l l Memorable Short - less than 10 char Easy to type and use with email (avoid spec char) URL – Universal Record Locator TLD, cc. TLD (. com, . biz, . net, . bz, . info) – – l l l Like an area code or file extension Biz will be the com of the future Test/buy similar and obvious names Use for signage, advertising, email Relate to company

Web Site – An absolute must! l l l On-line brochure Integrate into your business Viral marketing Easy to navigate Order processing Physical appearance – – – Keep it simple Fit the screen Fit the page Sell gently Minimize the menu items

Homework l Write the marketing section of your business plan – – – – Describe your ideal customer Segment your market Prepare a competitive analysis grid How will you price your product or service? How will you advertise/promote your p/s? Name a trade or professional organization you can join Where will you get leads?