It’s Friday again! As usual, we’re giving you another free audio chapter of How to Turn Your Idea into a Multi-Million Dollar Business. Here’s Chapter 5!
You can buy a copy in hard copy or kindle version. But before it gets released to iTunes and to Audible, we’d like to give it to you as a free trial. We hope you look forward to some of the other things that we’ve got that you’re going to get absolutely free here and at www.moreprofitlesstime.com.
CHAPTER 5: MARKETING & SALES
- Step 17: Overview of Marketing
- Marketing Orientation
- Competitive Strategies
- Marketing Objectives
- Unique Selling Proposition (USP)
- Market Types
- Step 18: Customer & Competitor Research
- Identifying Customers
- Identifying Competitors
- PEST Analysis
- Step 19: Marketing Research & Planning
- SWOT Analysis
- Marketing Planning
- Business Description
- Market Segmentation
- Marketing Mix
THANKS FOR LISTENING!
Until next time!
TRANSCRIPT: BONUS EPISODE 6
Title: How to Turn Your Idea Into a Multi-Million Dollar Business (Chapter 5)
Date Published: October 2, 2015
Running Time: 15:54 minutes
Hi, this is John Millar. I’m the Naked Business Coach, stripping business back to its bare basics. As a special bonus, we’re giving you a free copy of all the chapters in How to Turn Your Idea into a Multi-Million Dollar Business.
Now this is available in Amazon and you can buy a copy in hard copy or kindle version. But before it gets released to iTunes and to Audible, I thought I’d give it to you as a free trial. I hope you enjoy it, took me some years to write. And I hope you look forward to some of the other things that we’ve got that you’re going to get absolutely free.
Thanks so much and welcome to The Naked Business Coach Podcasting Channel.
The Entrepreneur’s Guide Series
How to Turn Your Idea into a Multi-Million Dollar Business (And Avoid the Mistakes that Send Most Business Owners into Bankruptcy)
By John Millar
Chapter 5: Marketing & Sales
I must admit: this is my favorite subject and one that is too often neglected and or misunderstood by almost every new business owner who doesn’t come from a sales and or marketing background. In my early teens, I started off working after school and weekends selling door-to-door home security products, which in the early 1980’s was a new market with extremely expensive products, so selling security systems was a difficult prospect but one I excelled at.
I learned early on that if you don’t understand people (and what motivates them), you don’t understand marketing and sales, so all the gimmicks and clever closes in the world will not help you sell. You must guide people to buy with emotion and give them a logical justification for their purchase. There are no magic bullets here; rather, there are lots of very simple low to no-cost things you can do to maximize your sales and marketing results. Admittedly, to the uninitiated, some of this can appear to be “magic.”
I have written a book that addresses this subject in depth, and it will be available soon. For now, just understand that it is important to have at least a general understanding of the basic marketing and selling processes when starting your business. We can build on these fundamental concepts later when you gain proficiency on the subject.
In this chapter, you can find information about conducting market research, market planning, and the goals of selling. Engage these topics before you hire a salesperson or develop sales training programs for your employees.
Step 17: Overview of Marketing
The purpose of marketing is to gain a balance between creating more value for customers and making profits for the organization. Notice that there is a distinction between the activities of “marketing” and plain old “advertising.” I use the phrase “creating more value” because marketing includes that while advertising may not. In order to achieve this balance in your business, you first need to understand some of the basic concepts and activities related to marketing.
A marketing orientation involves focusing your business on identifying and understanding your customers’ preferences in terms of needs and wants, and delivering them more effectively and efficiently than competitors. Exceed their expectations and they will become your raving fans for life.
Competitive strategies allow businesses to effectively engage their particular environment and successfully compete in the marketplace. Since all business situations are different, there is no single strategy that best fits all organizations. In fact I work with my coaching clients to create at least 10 low and no cost strategies that can be implemented over time and sustained indefinitely. There are quite literally hundreds of low and no cost strategies, so don’t be sucked into expensive campaigns that may not offer you a strong return on your investment.
Quite simply, I can answer this by quoting the great Henry Ford. He said, “Only half of your marketing ever works. The problem is I don’t know which half.” The important thing to remember is that if you underpin your marketing or sales strategies on just one thing you may be setting yourself up for a catastrophic failure. However, there are three types of competitive overarching strategies or ideals that you can adopt depending on your position in the market and particular objectives:
1) Cost Leadership – Organizations that follow this strategy aim to provide their products and services at a lower cost than any of their competitors.
2) Differentiation – Organizations that follow this strategy concentrate on creating a highly differentiated product line and marketing program in order to become the class leader in their industry.
3) Focus/Niche – Organizations that follow this strategy are usually smaller firms that focus their efforts on serving a few market segments effectively rather than dealing with the entire market.
I have seen over the recent years that niches are getting smaller and smaller so my personal favorite is a blend of differentiation and focus/niche. It allows my businesses and those of my clients to be different and stand out in a sea of mediocrity while focusing on a niche where I can be the absolute expert rather than trying to be all things to all people and ending up a master of none.
Marketing objectives define what is to be accomplished through your marketing activities. When setting objectives, ensure that your objectives are: Specific, Measurable, Achievable, Realistic, and Time-specific.
This gives the appropriate acronym “SMART.”
The ‘SMART’ approach allows you to (1) effectively manage your marketing activities and (2) determine how successful they have been and (3) determine whether they have delivered the particular benefits you seek.
Unique Selling Proposition (USP)
A USP makes your product or service stand out from your competitors and is generally the reason customers purchase your product or service over those of your competitors. Some of the common USPs are “best service,” “lowest price,” “best value,” and “most advanced technology.” The aim is to identify these factors and convey them effectively in the marketplace.
If you aren’t unique the only thing you can compete on is price and that means discounting which means lower profits which is more often than not a really bad thing.
Who wants to work harder and make less money?
Certainly not me!
We have training and tools to help you identify your USP. These are located in our coaching and training programs.
The success of your marketing strategy also depends on you gaining a comprehensive understanding of the particular markets you serve. These markets can either be consumer markets or business markets.
- Consumer markets – involve the purchase and sale of goods and services to consumers for their own use rather than for resale.
- Business markets – involve sales and purchases of goods and services to various businesses, governments, and market intermediaries to facilitate the finished product which is generally then re-sold to an end user.
Step 18: Customer & Competitor Research
For your marketing efforts to be successful, you need to understand your market and focus on identifying your consumers, competitors, and the external factors that may influence your business. You may also need to conduct market research to identify trends and perform various types of analysis to identify your business’ internal strengths and weaknesses and the external opportunities and threats.
Your market may consist of different customers with different buying patterns. Some may prefer impulse purchasing while others may prefer taking their time and getting assistance from others. Getting a good understanding of how consumers think, what their buying habits are and what factors influence these habits is essential for you to make the most of your marketing opportunities.
In simple terms, your competitors can be identified as those companies that offer similar products or services at comparable prices to the same group of customers. These can be either direct or indirect competitors.
- Direct competitors – These are businesses that sell products or services that are identical or nearly identical to those you sell. For example, Kodak identifies Fuji as a major or direct competitor for camera products.
- Indirect competitors – These are businesses that sell products or services that are similar but not identical to yours. For example, Kodak and Fuji identify Apple as an indirect competitor because it offers iPhones with digital cameras as an integrated feature.
PEST analysis helps you identify and understand the various environmental factors that can impact your business and its marketing activities. These include political and legal factors, economic conditions, social and cultural values, and the technological environment in which your business operates. PEST analysis also assists you in adjusting your marketing efforts with external changes that occur over time.
Step 19: Marketing Research & Planning
Marketing research is the process of planning, collecting, and analyzing information related to a marketing decision you must make. Marketing research is vital as it provides you with the specific data you need to break up or segment markets, decide on which areas to target, and identify the best way to position your business relative to your competitors. It can also help you understand trends in the market and can assist you in forecasting future sales and anticipating events and market changes that can impact your business.
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis helps you understand the internal strengths and weaknesses of your business as well as the external opportunities and threats. The goal of a SWOT analysis is to identify the critical factors affecting your organization and then build on your strengths to reduce your weaknesses, exploit opportunities, and avoid the potential threats.
Marketing planning starts with deciding on a business description and involves segmenting your market, targeting the most profitable segments, and positioning your products and services effectively in the marketplace. It also involves choosing the right marketing mix for your business to maximize the effectiveness of your marketing efforts.
A business description allows you to get your ideas, plans, and visions down on paper before you go any further. It is important to have a business description as it provides a thorough explanation of what your business is and the direction that you intend it to follow.
Market segmentation involves grouping your various customers into segments that have common needs or that will respond similarly to a particular marketing action. Understanding the concept of segmentation is central to marketing because each customer group will require a different marketing mix strategy. You can segment your market based on demographics, psychographics, behavior, or geographical locations.
Once you have segmented your market based on different characteristics, choose one or more target market segments. Developing different marketing strategies for different customer groups is very important as no single strategy will satisfy all customer groups since they have differing characteristics, lifestyles, backgrounds and income levels; however, the following are three general strategies for selecting your target markets:
1) Undifferentiated targeting – This type of targeting is when you merge your general target market into one big pool and hope something sticks.
2) Concentrated targeting – This type of targeting is when you focus on a single niche or specific market. As an example, in my own business, accountants who look after start-up, small, and medium-sized businesses make up my biggest target market. Why? Because they are doing business with the people I want to do business with, and if they trust me to help their clients, their clients will trust me to help them too.
3) Multi-segment targeting – This type of targeting allows you to direct your marketing efforts at multiple markets simultaneously and is particularly effective when those different segments have a common thread. For example, I mentioned earlier that my biggest focus is on accountants who service start-up and small to medium-sized businesses. I also focus on franchise groups and industry groups whose memberships are predominantly startups and small to medium-sized businesses.
Prior to selecting a particular targeting strategy, you should perform a Cost Benefit Analysis between all available strategies and then develop a collaborative plan that supports your goals, and budgets.
“Positioning” a product or service refers to the act of creating an image or concept in the customer’s mind about the product or service or developing a perception of the experience the customer will enjoy by purchasing your product or service. You can positively influence the perceptions of your chosen customer base through strategic promotional activities and by carefully defining the marketing mix of your business.
Once you have decided on your overall competitive marketing strategy, you can then focus on planning the details of your marketing mix. A marketing mix is a set of controlled variables that formulate the strategic position of a product or service in the marketplace. The primary goal of marketing is to optimize and offer the best possible combination of the Four P’s:
Then work out the best way to maximize the effectiveness of your marketing efforts. Check out the online training programs we have developed at www.moreprofitlesstime.net and look up the Business Essentials Series, Modules 3, 4, 5, 7, 8, 9, 10. They cover all of the fundamentals you will need to work with before you do anything more. The series includes a DVD, CD, Workbook and tools that will help you.