Your marketing analysis needs to be supported by facts and figures.\u00a0 Simply giving ball-park figures on your market size and projected market share is skating on thin ice.<\/p>\n
As I mentioned earlier, market research can almost be conducted on any level–so long you find out two things:\u00a0 what your customers want and whether your product is what they want.\u00a0 Ask your customers questions about what they’re looking for in a product, delivery requirements, price, level of service, and the type of promotional material that catches their eye.<\/p>\n
If you are a small company you will have to set some priorities amongst your segments, applications, and marketing activities.\u00a0 It is impossible for you to do an excellent job on everything.<\/p>\n
In the past marketing has been defined as the four P’s:\u00a0 price (credit, retail margins), product (quality, product range, packaging), place (where your product is available and how it is distributed), and promotion (how consumers will find out about your product and be persuaded to buy it).\u00a0 The steady growth of service companies has however added three new “P’s” to this marketing mix:\u00a0 people (staff involvement), process (the way in which you provide your service), and physical (the environment in which you offer your service).<\/p>\n
Just how important these P’s are to your company depends on your line of business.\u00a0 Pricing is more important for the consumer goods company than companies in the service or industrial sectors where reliability and after-sales support are tantamount.\u00a0 Getting people to try your product will be harder if you’re an industrial or service company, because these consumers tend to be more conservative than ones in the consumer goods sector.\u00a0 However, once industrial or service customers have bought from you, they’re more likely to buy again than consumer goods customers.\u00a0 Achieving a high level of distribution is more important for the consumer goods company as most of the industrial and service based companies have direct distribution routes for their products from suppliers to end users.<\/p>\n
Products have a life cycle similar to humans:\u00a0 birth, growth, maturity, and decline.\u00a0 Before you can define your product policy you must know what stage your product is in.\u00a0 For instance, the sales graph of toys is often very angular, with sales going up and down quickly.\u00a0 This means that your return on investment will be fast, with a high starting price, and subsequent discounting to maintain your sales at a reasonable level.<\/p>\n
Some options you may want to consider in your companies future product goals are (a) abandoning products or activities; (b) holding your own sales position; (c) increasing your market share by lowering prices, stepping up promotion, changing distribution channels, buying out a competitor, branding your product; (d) opening up a new market either regionally or nationally; (e) changing your product, which could mean altering its characteristics, expanding your product range, or making it suitable for a different sector of the market.<\/p>\n
When you’re first starting out keep a tight reign on your research and development of new products.\u00a0 These cost time and money, and may lead you nowhere.\u00a0 Although the success of new products is central to your company’s long-term growth, remember that only a few come out as winners.<\/p>\n
Direct distribution of your product ensures that you maintain control over your product and its pricing.\u00a0 The drawbacks are that it limits market coverage, and the costs can be high if you have a whole bunch of small customers spread out over a large area.\u00a0 Your indirect distribution options are (a) commission agents–useful with companies selling high mark-up products and having a restricted selling capability; (b) franchising; (c) appointed dealers with specific areas and exclusive distribution rights can help you widen your distribution base; and (d) wholesalers can also expand your sales, but be prepared to forfeit control over your pricing policy.<\/p>\n
Try not to jump the gun by arranging for more distribution vehicles than you need.\u00a0 It may be cheaper for you to use haulage contractors or specialized distributions firms.\u00a0 A good rule of thumb is not to buy your own unless your needs exceed more than ten vehicles.<\/p>\n
When discussing your inventory policy keep in mind these factors:\u00a0 level of service required in holding stock, available space, cost of storing stock, economic production quantity, shelf life, seasonality of demand.\u00a0 Small business owners must remember that service may be what sets it apart from the rest of the pack, and promptness is a strong selling point.\u00a0 However, stock levels also make up a big part of a young company’s working capital, therefore you would be wise to reduce it as much as possible.<\/p>\n
You may find it helpful to include a table showing the build-up of dealers and representatives by month, as well as each dealer’s expected sales.\u00a0 Another good idea is a selling schedule and a sales budget that includes all marketing, promotion, and service costs.<\/p>\n
You may want to include a three-year projected sales forecast for your product.\u00a0 Your sales for each year should be broken down into number of units, selling price, expected key accounts, total sales in dollars (sales revenue), and a description of where your major sales will occur geographically (optional).<\/p>\n
Many businesses follow the eighty\/twenty rule–eighty percent of their business comes from twenty percent of their customers.\u00a0 The loss of one customer can mean a ten or even twenty percent loss of sales–and for some, this can spell zero profitability.\u00a0 Try to reduce your dependency on any one customer.<\/p>\n
Strive to maintain a consistent company image.\u00a0 Quality, reliability, service, and response time are key parts of your image, and they should fit in with your other sales strategies.\u00a0 For example, it wouldn’t make sense to sell a high quality teddy bear at rock-bottom prices.\u00a0 The same is true for advertising and promotion.\u00a0 You might look out of place advertising a PTA recipe book in Bon Appetit magazine.<\/p>\n
Be sure you know how raising or lowering your price will affect your total sales.\u00a0 Each market has a different price sensitivity or elasticity (the percentage drop in sales that each percentage point increase in price relative to the competition will produce).\u00a0 The greatest price effects are felt in commodities and the least in services.\u00a0 Some small businesses do not explore different pricing options, and end up selling their products for lower prices than they have to.<\/p>\n
Your product’s quality will also determine how much you can charge for it.\u00a0 Studies have shown the most profitable solution is to make products which are slightly better in quality than your competitors’, and sell them at a slightly higher cost.<\/p>\n
Branding your products has its advantages:\u00a0 helps you become known more quickly, lets you charge a higher selling price.\u00a0 The disadvantages are you may have to spend more money on promotion, and branding often excludes products from distribution channels.<\/p>\n
Don’t be too easy on your discount policy.\u00a0 Discounting may seem like the easiest way of overcoming sales resistance, but remember it will also damage your cash flow and may weaken your future bargaining power.\u00a0 Stable prices are one sure-fire way of letting consumers know you believe in your product.<\/p>\n
Credit cards are big in today’s society.\u00a0 Most people have at least one.\u00a0 It would be difficult for you to sell items costing more than twenty dollars without offering some credit terms to your customers.\u00a0 Industrial companies also offer other credit options, leasing for instance.<\/p>\n
Keep an open mind toward your advertising campaigns.\u00a0 Ads are only as good as the number of extra sales they bring in.\u00a0 Newspapers, magazines, radio, poster and television advertising tend to increase long-term sales, while leaflets, point-of-sale, catalogues, brochures, exhibitions, and trade gifts boost short-term sales.<\/p>\n
Graphs are an effective way of presenting your schedule and cost of promotion and advertising.<\/p>\n
Anybody can cut prices, but it takes brains to make a better article.\u00a0 Alice Hubbard.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Your marketing analysis needs to be supported by facts and figures.\u00a0 Simply giving ball-park figures on your market size and projected market share is skating on thin ice. As I mentioned earlier, market research can almost be conducted on any level–so long you find out two things:\u00a0 what your customers want and whether your product […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":34,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-94","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/entre-plan.com\/index.php\/wp-json\/wp\/v2\/pages\/94","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/entre-plan.com\/index.php\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/entre-plan.com\/index.php\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/entre-plan.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/entre-plan.com\/index.php\/wp-json\/wp\/v2\/comments?post=94"}],"version-history":[{"count":2,"href":"https:\/\/entre-plan.com\/index.php\/wp-json\/wp\/v2\/pages\/94\/revisions"}],"predecessor-version":[{"id":172,"href":"https:\/\/entre-plan.com\/index.php\/wp-json\/wp\/v2\/pages\/94\/revisions\/172"}],"wp:attachment":[{"href":"https:\/\/entre-plan.com\/index.php\/wp-json\/wp\/v2\/media?parent=94"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}