Managing a Small Business: Marketing
Marketing is the process businesses use to create and increase the number of products sold in the marketplace to a specific group of people that a business would target.
With marketing, you use knowledge of the environment and act on it in a particular way.
An official definition you may learn at an MBA class describes marketing as: "the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organisational goals." - Dictionary of Marketing Terms
Any business needs sales to be able to sustain the business. Money made from sales needs to cover staff salaries and many other costs required to run your business.
Also, marketing presents the outside face of your organisation and it is important to make a good impression in the marketplace. This makes your target market group feel positive about your business, which is your own brand. The target market is the specific group of people you are aiming your product.
There are four major factors in any good marketing plan:
- Product - (the item, or service you present to the market)
- Price - (the amount you charge for the product, service or item)
- Place - (how and where you distribute the product)
- Promotion - (how you communicate with the marketplace to let them know about your product)
These four are also called the Marketing Mix or the 4Ps.
If you know what it is that your target market needs and have the right product to match that, this means you have fulfilled the first requirement, namely Product. Your product fills a market gap that is not being addressed. To get this right, it is important to know your target market, and what they want and need. The saying, "the customer is always right", has lots of truth to it, where they the customer will talk either with their wallets or publicly about your product. It is therefore important to listen to them and act responsibly as a marketer to take their changing needs into account.
This is the second P of basic marketing. The question to ask yourself is whether you have made sure that you have the best price for your product? If you charge too much for your product, the target market group will not be able to buy it. They may not be able to afford it, or the value of your product in their minds does not match that price, so they will not pay for it. If you charge too little, the target market may think there is something fake or cheap and they may not want to associate with such pricing.
Also, it is vital to know what your competitors are charging. Your competitor may have their prices wrong, and perhaps you can provide a better product at a better price! It is a mix of gut-feel and science.
This is the third P which concentrates on how you get your product to your customers, from development to the stage where it is 100% ready for purchase. For example, you may be manufacturing in a specific area, where you need space, and therefore it becomes very important that you have good distribution to get your product where it needs to go.
Depending on your product, you will have different needs. For example, fruit growers will need a team of air-conditioned trucks to get produce to the correct sites.
The other aspect of this is that you need to ensure that your product is being sold in the correct places. If you have them on the wrong sites, then you will not be reaching your main target market.
This is the method you use to persuade your target market to buy your product. There are various methods to do this, the most well known aspect of promotion is advertising. This is when you employ an advertising agency to design ads for your product and put them in the papers or, if you have loads of advertising budget, on TV. Advertising is also called "above-the-line" marketing.
Other effective types of promotion are:
- Sales promotion - "marketing activities that stimulate consumer purchasing and dealer effectiveness through a combination of personal selling, advertising, and all supplementary selling activities" from www.ad-up.com/new/adup_ad_defs.html
Examples of sales promotion are: In-store banners, promotional and corporate gifting and using a famous sportsperson to promote product at a mall promotion event. This also used to be called "below-the-line". Today many ad agencies speak of themselves as "through-the-line", providing clients with all aspects of promotion, while others are "niche", providing very specific services to clients.
- Public Relations (PR) - the process of making a special effort to communicate with your target market group through articles in the newspaper about your product and through special events, which will raise the awareness of your product and make positive associations with your product.
As a client, you will hire a PR agency to always be on the lookout for PR opportunities for the product of the client.
All these forms of promotion cost your business money, so you need to be aware of how much return on investment you are getting for your expenditure. It needs to create sales growth for you, or there is a problem with the promotion aspect of the marketing mix.
For you, your ad agency and the PR agency to know the best ways to talk to your consumer or target market group, it is important that from time to time you conduct market research. This is when you design questions about your product to find out how the market sees it. From market feedback, you are able to make adjustments in your marketing plan and sometimes even your business plan to improve the business as a whole.
Research can be large scale or small scale and can use quantitative (numbers) or qualitative (descriptive) measures.
- Municipal Demarcation Board: Maps, demographics, statistics, municipal profiles and other useful information for market research. (www.demarcation.org.za)
- Bureau of Market Research (BMR), UNISA: Marketing and socio-economic research. Training is also provided in research methodology. (www.unisa.ac.za/Default.asp?Cmd=ViewContent&ContentID=2359)
- Africa Business Direct: Africa Business Direct is a trade and investment facilitation firm with its principal offices of operation in Johannesburg, South Africa. With the aim of helping to create Africa-based multinationals, the company's focus is on providing training, consulting and market intelligence to enterprises seeking to expand on the African continent or to establish joint ventures and investment initiatives on the continent which will link Africa to other parts of the world. Through an online business development focused portal, ABD also assists both Africa-based and non-Africa-based enterprises in crafting their trade and investment expansion strategies. (www.africabusinessdirect.com)
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