One thing is paramount for the success of any business. It can often be overlooked by startups and new entrepreneurs getting to grips with developing a strategic plan to grow the business. What is this? This is marketing! Many mistake marketing for advertising but, it encompasses many more concepts and functions, of which advertising a small component of.
Many budding entrepreneurs get stuck into planning on how they are going to sell their product of service. They fail to stop and think, who the market really is, what the market likes, and how the market will respond. The key part of this is market analysis, which can often be little to non-existent in many entrepreneurs plans. Understanding the market and your audience is the most important part of marketing, period. If you do not understand your market in every small detail possible, you won’t have the understanding to produce the most effective strategy to draw the market in and sell your product or service to them, you will essentially be sailing into the fog.
If you have the urge to set up your own business and lack the fundamental understanding of marking principles or feel like you just need a brush-up, then all is well! We have selected the key marketing theories and principles that will help you to succeed in your business venture.
Review Your Business Environment
Step 1: Research The Macro Environment And Create The Next BIG Thing…
Understanding the environment you are competing in is crucial to business success. Every startup including large businesses must review their environment on a continuing nature to understand where forces may arise that may affect the business, and where opportunities mat lay, for future growth and development. A trend analysis is essential in maintaining that key business decision makers develop a strategy that works. Experts in marketing use the PESTLE analysis to carry out this part of a market review. PESTLE stands for; Political, Economic, Social, Technological, Legal, Environmental.
How do experts use PESTLE? Simply identify and analyse all significant current and potential future policies that may emerge. They must relate to your business and affect it someway. From this analysis, you must identify whether there are any significant risks or possible opportunities to advance upon. This is especially significant for an established business. A startup must also identify whether the boundaries to entry are too great for their own capacities.
Step 2: Analyse The Microenvironment To Stay Competitive
Many experienced executives fail to understand some of the basics of market analysis. When they take on new roles that require in-depth understand of their micro-environment, they fall flat. The microenvironment analysis is the starting basis to determine how to grow your business.
The crucial theory the experts use is the SWOT analysis, standing for; strengths, weakness, opportunities, threats. Simply identify the factors that fit int0 each category that directly relates to your business.
Your strengths should be a key factor that helps drive your business success, it could be an identifying factor that makes your business unique compared to the competition. But, it’s more than that. It allows you to identify factors that you must act upon to maintain or increase in market share.
To best utilise this concept experts advise developing this analysis further. What to do next:
Use this SWOT to identify Critical Success Factors (CSF’s are not standard goals to success (i.e. increase revenue, generate high-value clients) but, actionable, and attainable factors that the company could potentially execute).
To determine your critical success factors use your SWOT analysis, and link them in a way that’s set out in the points below:
- How to use strengths to capitalise on opportunities.
- How to use strengths to minimise threats.
- how to remedy weakness so we might take advantage of opportunities.
- How to remedy weakness so that we might minimise threats.
Developing Your Brand Platform
Step 3: Identify Your Scope: Remembering Your a Business and Not Superman
The scope focuses on your businesses functionality and capabilities. What it is you have to offer! Why is this important? Many businesses may deviate too far from what the market considers the business to be. This may ‘wash down’ the core identifier that your business has relied upon to remain competitive. You cannot be everything to everyone!
Second, as your business grows there may be capabilities that your business could utilise to advance growth, as long as it fits with the business identity.
Determine The Capabilities That Can Rake In The Money
First, identify all of your businesses resources. A resource is any asset (human, physical, financial, knowledge) that can be utilised to perform a business process. Second, identify how to bundle these resources to produce a business capability that has value and can be utilised for a revenue stream for the business. Often, capabilities are overlooked or underutilised by managers, which could reduce the businesses competitiveness in the market.
Assert The Business’ Core Competence And Put Your Foot Down
Next, identify the main capability that the business has expertise in, produces the majority of revenue, or is the main identifier that your market relates to your business.
As a general rule, it is best not to deviate far from your core competence, doing so can challenge the market’s perception of your business in a negative way.
Step 4: Identifying Your Target Market Takes Thought…
Now if there is one thing to take away from this, it is to identify and understand your target market and audience, as previously mentioned. We state target market and audience for a reason, as they are different; we will get on to this later.
Your target market is the specific group of people, a specific type of business, or specific industry sector that your business services.
There are many factors we must consider when identifying a target market for a startup or new business operation, first, however, it must be a quantifiable market to determine market capitalization. Some addition factors to consider include:
- Market size
- Market value
- Market longevity
- Market profitability
- Does the market suit with services offered?
- Rivalry between competitions
- Knowledge of the sector, industry experience, and expertise
- Feasibility of market acquisition (barriers to entry)
- Expected growth and market share
- Fit with brand positioning/brand identity
- Fit with business goals and vision
Primary & Secondary Market Then One Day the Whole World
Your business could operate across multiple markets, as many business capabilities can be serviceable to a number of groups or industries. Segmenting the market allows you to identify individual market trends and needs. Giving you the necessary data and equipping you with the knowledge to create a targeted marketing strategy for each, thus, maximising the marketing outputs effectiveness and efficiency.
Audience: Hopefully Somebody Getting The Messages
While we may have one or two target markets, our audience can be larger and varied. What’s more, is that your audience may not be the primary consumer of your product or service, in some cases not at all. So why would we communicate to them? We’ll explain…
First, for effective communications, it’s imperative to know who you are communicating with specifically. This is the foundations of any marketing communication activity. Knowing who it is we are directing our efforts towards.
Secondly, is this person the user of the product or service themselves, or are they a key influencer who recommends or has key involvement in purchasing decision making.
Example: If you are a toy producer, your target market could be retail chains or consumers who purchase the toy.
Your audience for the retail could be a procurement manager. If you are targeting the consumers themselves, then there are two categories minimum here, first, is the children who use the product, then the parents who purchase them. The children are a key influencer, while the parent is the key decision maker. Each has their own characteristics, needs, and intent. You must understand the traits, characteristics, needs, and intent of each audience to create effective communications.
In the instant of parent and child and the toy industry; if you leave out any one of these audience members within planned communications, your wider sales objectives will likely not be met. The child needs to want the toy for them to influence their parent. Therefore your communications must be sufficient to influence the child into wanting the toy. Second, you must convince the parent that the toy’s features meet their standards i.e. safety, price etc.
Demographic/Psychographics: The More You Know The Better
So here it is…Demographic and psychographic breakdowns will give you the understanding of how to communicate with your audience, by identifying the type of person they are, what they like, how they live, etc.
Spend time researching and analysing the demographics and psychographics of your audience/s in detail, you will be rewarded for it long-term.
Descriptor: Ever Played Guess Who?
Now describe your audience – the typical person that you are communicating towards, and remember there may be more than one. This is perhaps one of the best exercises for a marketer to really identify and understand who it is they are directing their efforts towards and to maximise their efforts intent.
Step 5: Finding Your Positioning
The brand positing is the place in which a brand sit within the market, and more importantly the perception of where the brand sits within the consumer’s mind. A strong brand positioning implies a brand is unique, identifiable, credible, and has a sustainable position within the consumer’s mind.
The positioning should be built around the capabilities or core competence, something that the business has an expertise in or has a tangible differentiator from the competition. You should then build the brand around this, which is a softer intangible differentiator.
What you need to do next is to develop a brand promise, brand essence, and brand persona to make the brand personality shine:
Make A Brand Promise and Stick To It
This is the tangible benefit that makes your product of service desirable. A brand promise should be the benefit you can deliver time-after-time to your consumers. It can be verbally communicated to your audience or subtly communicated through the expression and delivery of the brand experience. A great example that was visually and verbally communicated was an ad by FedEx: “When it absolutely, positively has to get there overnight” – a clear, direct promise it presents to this day.
The Identification and communication of the brand promise can cause two effects; first, is to solidify the unique benefit that the brand will deliver, within the consumer’s mind, in FedEx’s case: overnight delivery guaranteed. Second, it gives the business a focused proposition to which it can develop upon, and that will help to maintain a competitive edge within its market; in FedEx’s case, it has cemented itself as a market leader in multinational courier delivery services. FedEx has the biggest air fleet than any courier company in the world, with over 6oo aircraft and over 300 destinations worldwide. All forces operationally have gone into maintaining and improving upon their brand promise and as such has solidified their brand position and propelled the company’s financial performance.
So keep your brand promise, as your reputation and often sales rely upon it!
Brand Essence: The Words That Come To Mind
Listing three or four words that best describe your brand and three or four words that your brand could potentially be described as but, in which you don’t want it to be label as. What this does is aligns the marketing strategy towards a direction that can easily be described. If you can not describe your brand in a few words, how is your audience going to identify what your brand represents?
Brand Persona: There’s a Person In Every Brand
Brands have a persona! This persona is important to convey in all of your communication toward the consumer. A strong, consistent persona builds trust withing the consumer’s mind. Many businesses will create a brand, build it over time but, fail to acknowledge the full persona of the brand. This will give them missed opportunities in developing strategies to communicate to their audience.
A great exercise is to describe your brand as though it is a person. What traits and characteristics will it have? What ‘age’ would your brand be? How would it act, dress, and communicate to its peers?
A quick exercise to substantiate this is to think of words that fit the persona for a brand within the banking industry… a conservative, reliable, middle age/senior, highly educated, articulate, dressed in formal wear and an honest individual…well, maybe not honest I guess?
Now do the same but for a brand within extreme sports industry… what words come to mind? Youthful, energetic, progressive, spontaneous, risk-taker, dressed in casual wear. Do you understand the point we’re coming from?
By fully identifying your brand persona you can solidify your position within your consumer’s mind, maximising the effect that your branding and communication has when engaging with your audience.
This article is part one of a two part guide to building a marketing plan. Continue in the link provided, for part two of the marketing plan guide.
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