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Business Owner's ManualMarketingMarketing plays a crucial role in the success of any business venture. Whether you are in the start up or expansion phase of your small business, an effective marketing strategy will ensure that you reach the goals you have set for your enterprise. Marketing is an ongoing process. It starts with a thorough understanding of your business environment, and as your business is growing it needs to be continually refined and updated to accommodate changes in the marketplace. The American Marketing Association defines 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 organizational goals." Simply put, marketing is about finding and keeping customers and fulfilling their needs. The key to successful marketing is a solid understanding of the environment in which your business operates, your position in the market place, your products and services, your competition, and your customers. Because researching your market is such an important aspect of marketing, you should at least become familiar with the essential steps of the market research process. In this chapter you will learn how to:
SOURCES: Thierry Delvigne-Jean, SIBL Small Business Team WHY DO I NEED A MARKETING STRATEGY? The benefits of a carefully planned marketing strategy are numerous. Too often, small business owners rely solely on their intuition to make business decisions. While this informal knowledge is certainly an important aspect of the decision making process, it may not provide you with all the facts and data you need to achieve the best results. Developing a marketing strategy will force you to think about the various aspects of your business. In fact, you should really think of the "marketing strategy" as a set of strategies — for positioning, pricing, distribution, and promotion — developed with one goal in mind: to lead your enterprise to the destination you have chosen.
The four P's of marketing Traditionally, marketers have referred to the four "P's of marketing" to explain the importance of a well-planned marketing strategy. In essence, the main purpose of marketing is to help you identify the needs and wants of your target market so that you can develop promotional strategies that will allow you to provide your customers with the "right" product at the best price.
THE MARKETING PLAN In the start-up phase of a business, the marketing plan is often incorporated into the business plan, which could be defined as the "road map" of your enterprise outlining the "who, what, when, where, why, and how" of your business.
Structuring the Plan As your company grows, however, the marketing plan often becomes a separate strategic tool in the implementation of new products or services. In this sense, the business plan deals with the entire business while the marketing plan covers a specific products or services. The structure of your marketing plan will differ according to the characteristics of your business, products, or services you intend to sell, etc. Whether it is simply a part of the business plan or used as a separate strategic tool, your marketing plan should at least cover the "four P's of marketing" mentioned in the previous section. Basically, the plan describes how you intend to achieve your goals, with measurable objectives. For a description of the essential components of a marketing plan, refer to the market analysis and marketing strategy sections in Writing a business plan. The basis for this information will be drawn from your market research process.
Media Strategies Identify the media habits of your target consumers:
Find the best media channels for your products:
MARKET RESEARCH In order to write your marketing plan and develop effective marketing strategies you will need to gather facts about your business environment. Market research is simply the systematic process of collecting and analyzing data to find answers to questions you may have regarding your customers, your competitors, and your industry.
Getting Started Market research doesn't need to be costly. The Internet has become an important tool for gathering marketing information, and a number of free market research sources are available to small business owners. While many business sites offer free access to their online resources, you may still find that the most current and valuable information comes at a price: fee-based online resources are increasingly common. Your local library or, when available, a business library can also prove invaluable. There are a variety of useful business and industry resources that can be found in libraries, including company and trade directories, electronic databases, industry surveys, etc. The New York Public Library's Science, Industry and Business Library also offers a free public class on doing market research, which includes an overview of the library's print and electronic resources for gathering market research data and hands-on training in the use of these tools.A complete list of courses and the weekly class schedule can be found on SIBL's Web site.
Two Types of Market Research There are two main types of market research: primary and secondary research. In general, secondary research is the method used most often by small business owners since it is cheaper and less time-consuming than primary research. The choice will depend on many factors such as your budget, the products and services that you are selling, available time, etc.
Secondary research involves the use of existing data that has already been compiled by someone else and is available in published form (e.g. demographic data that is compiled by the U.S. Census Bureau). This section focuses mainly on doing secondary research. For more information on conducting primary research, see the peerspectives.org Web site. Market research reports published by marketing firms are available for many industries, products, and services. If you don't have the time to conduct your own research, a number of directories can help you to locate current market reports covering your industry. Keep in mind, however, that market reports published by professional marketing firms can cost thousands of dollars, depending on the industry and the length of the report. Findex, a worldwide directory of market research reports, is available both in print format and on the Web. The American Marketing Association's GreenBook includes the full range of marketing research companies and services worldwide. MarketResearch.com Academic also provides access to full-text market research reports on various products and services. Access to the MarketResearch.com Academic database is available for free in the Science, Industry and Business Library's Electronic Information Center. Before you begin doing your actual market research, you should consider three main questions: 1.) Who are my potential customers? 2.) Who are my competitors? 3.) What is the current state of my industry? Customers In order to market a product or service, it is essential that you identify and define your target market. Remember that the more you know about your consumers, the more effective your marketing strategy will be. Your target market is simply any group of current or potential consumers of your product or service. For more information on targeting your market, see the peerspectives.org Web site. Once you have identified your target market, break it down into smaller segments so that you can direct your marketing and sales efforts at the segments that are most likely to buy your products or services. Try to define your "typical" customer or target audience, in terms of demographic, psychographic, and lifestyle characteristics:
In order to identify your target consumers and segment your market, you can use Mediamark Research or Simmons Study of Media and Markets. These two publications, available both in print and as a fee-based service on the Web, use an Index number to measure the performance of a particular market segment as compared to the total U.S. population. By selecting the highest Index number for some of the major categories, you can create a fairly detailed composite profile of a hypothetical consumer of your product or service. demographics:
purchasing power:
buying habits:
psychographic and lifestyle characteristics:
By now, you should have developed a fairly good profile of your target consumers. Remember that the more you know about your customers, the more you will be able to fulfill their specific needs.
Competitors Finding what your competition is up to is crucial to the survival of your business. Identify your main competitors, review their business operations, analyze their weaknesses and strengths, their pricing strategies, their market share, etc. Who are their customers? What are their sales volumes? This information will help you assess the position of your company in relation to your competitors. If you find out that the market your are targeting is too competitive, for example, you might want to reconsider your initial decision or adopt a new strategy. The Internet offers a wealth of free resources, from news clips and press releases to stock quotes and company profiles. In some cases, fee-based Web services, like Hoovers, will also provide limited access to certain parts of their Web sites for free. Financial statements such as annual reports and 10K filings, as well as other public reports, can be found on a number of sites like FreeEdgar or Tenkwizard. Also, remember that you can collect a lot of useful information just by visiting your competitors' Web sites. As a small business owner, you will most likely need to research small and medium-sized companies. This kind of information — on small, private companies — is much harder to find. Often the best (and sometimes only) way to find information on small businesses is to search for articles published about the company in magazines, trade journals, and newspapers. An Internet search may be used as a starting point, but for more comprehensive information electronic business databases are usually better sources. The Science, Industry, and Business Library provides free access to Business Dateline, General Business File, Dow Jones Interactive, Nexis, Business and Industry, Advertising Redbook Online, and a variety of other business and periodical databases. Company directory databases like Dun & Bradstreet and Reference USA will also help you locate competitors in the area you have chosen for your business. You can search these electronic directories by industry, geographical area, size of the company, etc. They provide basic company information, such as address, key officers, lines of business, number of employees, and, when available, credit ratings.
Industry Trends Analysis An in-depth analysis of the environment in which your business operates is an essential part of marketing research. Ask yourself how your business fits in the marketplace: What are the current and future trends? What is the size of the market? Is the market big enough? Is it shrinking or growing? What is the demand for my products or services? In some cases you may need to look closer at economic, political, legal, or technological issues affecting your industry. Some questions to consider might include the following: What laws and regulations will I have to comply with? How are new technologies going to impact my business operations? Trade journals can be used to keep track of trends within an industry. Your local business library may have subscriptions to the journals for your particular industry. Below are some of the directories which list trade journals for different industries.
Trade associations can also provide useful marketing information such as industry reports, statistics, market surveys, etc. Keep in mind, however, that you may have to pay membership fees to get access to the information. The Encyclopedia of Associations, a directory that covers regional, national, and international associations, lists trade associations in different industries. The American Society of Association Executives also provides access to its Gateway to Associations Online. This database of U.S. trade associations on the Internet is searchable by keyword, category, or geographic location. ADDITIONAL LIBRARY RESOURCES While it is possible to find some industry and market information on the Internet, many of the most comprehensive and up-to-date resources are still fee-based services. These online databases provide access to a wealth of marketing information, industry surveys, statistics on specific markets, market share rankings, articles on companies, analyses of market trends, etc. Although most of these services require a subscription fee, they may also be available for free at your local library. Some of the more comprehensive databases for industry information include General Business File (Gale), EBSCO Host, Business & Industry, Stat USA, and Dow Jones Interactive. Listed below are some of the print, electronic, and Internet resources which you can access for free at the Science, Industry and Business Library. Check the New York Public Library catalogs for the availability of print items: CATNYP for the research libraries; or LEO for circulating books. Check SIBL's database list for descriptions of the electronic databases available for free at the library.
Print Resources
Electronic Resources Several electronic databases are available in the Electronic Information Center for finding articles, statistics, and other marketing-related information.
Free Public Classes SIBL offers a free public class on doing market research, which includes an overview of the library's print and electronic resources for gathering market research data and hands-on training in the use of these tools. Classes are also given at the library on searching directories, finding company information, and other marketing-related topics. A complete list of courses and the weekly class schedule can be found on SIBL's Web site.
Selected Internet Resources
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