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Marketing is that herculean task of defining what business the company is in. It is the process of defining the product characteristics, the company brand strategy, identifying the target customer, selecting the right marketing channel, establishing the price, and the overall management of sales activities relating to all products and services.
Too many organizations stray from this simple concept and allow sales activities to dictate marketing strategy. Why is this wrong? Well, let’s see. The salespeople want to hit their sales goals, that’s understandable. But they have no brand goals, channel goals, or product development goals.
They live and die by their sales. All the recommendations of the sales staff will be about hitting their numbers to achieve their performance bonuses for this year (and most times they recommend a price reduction). A sales plan is part of the marketing plan. If sales are not working then something is wrong with the overall marketing plan.
Some Basic Marketing Tips for Large and Small companies
Choosing an Ad Agency
Weighing Strategy Versus Creative in Basic Marketing. In baseball, there is the old adage that good pitching beats good hitting. This means that on any given day in the ballpark, a great pitching staff will win more games than a lineup of hitters. Yet, if we recall the history of baseball, most of us will think about players like Babe Ruth, Hank Aaron, or some of the asterisk home run kings of today. Sandy Koufax, Bob Gibson, and Dizzy Dean don’t usually head the list. It seems we are genetically pre-determined to focus our attention on the long ball hitters rather than the players that actually win the game.
It’s the same way in selecting an ad agency. Large and small companies seem to prefer “break-through” creative rather than swooning over the thought process that develops a brand position or a product differentiation insight. Yet, the advertising landscape is littered with the memory remains of “great” creative that failed to sell a product. And isn’t sales the bottom line of any advertising campaign?
Advertising creative is the four-bagger of the agency pitch. Both sides may talk about the importance of strategic thinking and results-based marketing, but creativity is what the client remembers. Friends, neighbors and family never comment on a well-constructed business strategy, but they will smile, pat you on the back, and tell you how much they like your advertising.
It takes a disciplined approach to business to review a series of agency pitches and focus on the business thinking behind the pitch and not make the creative the decision-maker. But, in the end, strategic thinking beats creative home runs. Think of it this way, when a pitcher wins a no-hitter, it’s usually a very quiet day in the stands. Until the last inning that is, that’s when the pitcher gets the standing ovation for winning the game.
Will the Web become a basic marketing component for small businesses? Although the Web may be a large part of the marketing mix of large corporations, it is slow to find a home in small business marketing according to a recent report from Opus Research. The major objections from small business owners included time, budget, and manpower. The online survey drew nearly 1,200 responses from across the globe.
According to the results:
25 percent believed online advertising was too expensive
20 percent thought that internet marketing was too difficult
18 percent thought the internet didn’t work for their business
On the positive side, most small business owners believed that some online presence, even a static Web page was necessary for any business. Also, many owners thought that local business review sites had a positive impact on their business.
Sometimes the Package is More Important Than the Product for Small Business. Product packaging is often given little attention by small businesses in the rush to get a new product to market. Product development takes so much time, effort, and money that the packaging is only developed as the final, hurried step before the product hits store shelves. What many companies don’t realize is that people make decisions based as much on package design as product performance. For a new product, this may be the main factor in the buying decision.
As an example, go to a local “dollar” store and look at the second tier, unknown brand products. You’ll find that the labels seem almost generic in design, with washed-out colors and bad layouts. Yes, these products are targeting bargain shoppers who are focused on price, but if more thought was given to design, a wider market could be available. These second-tier package designs suggest both low price and low quality.
Most small business owners tend to pick packaging artwork that is attractive to him or her. I worked with one company that was targeting young females, with an executive staff comprised of middle-aged women. Invariably, they picked a design that was popular when they were young and were surprised when the product performed poorly in the marketplace.
How to Design Packaging
There is only one rule here: ask the customer. A focus group with your target audience will give you a better understanding of their emotional reaction to your package and your message. Even if you market online, it’s beneficial to see your customer’s reactions face to face. Now, remember, your customers will not have rational reasons for their preferences, they will “like” a design or “not like” a design based on criteria that they probably can’t express.
Focus Group Questions
Bring several different design options (even those you dislike) and display them all together and ask your group these questions:
Which product looks better made? (Remember, they are only seeing the packaging, not the product.)
Which product looks more expensive?
Which packaging has the most attractive colors?
Which product looks like it is of very poor quality?
Which product looks like a bargain?
Which product would you be most likely to try-out?
The answers from these questions give you an idea of the consumer’s emotional reaction to each package design. You don’t care which package looks the best, you want to know which package design will most likely influence a purchasing decision. This is also an interesting experiment for a small business owner to conduct with existing products.
See Your Business Like A Customer
One of the most basic marketing research activities is to monitor customer interactions with your company. One of the oldest, and perhaps, the most insightful technique in this arena is to use mystery shoppers to evaluate how effectively your employees work with customers when you are not present. It seems easy enough, just hire someone to come into your store, pretend to be a customer, and report back to you on the quality of that experience. If it were that easy, mystery shopping would be used far more than it is today. Most of the time, however, mystery shoppers provide unactionable reports, using undefined performance measurements that give no direction and result in an alienated workforce who believes that the boss is “spying” on them.
With all the possible hazards that mystery shopping can bring, it is still the best way to understand how your staff performs in your absence. I know of one manufactured home dealer whose mystery shopper discovered that a sales staff member was directing customers to the lotto tour the units on their own. Telling the customer to, “let me know if you have any questions”. This was a critical failure that probably resulted in many lost sales that cost the owner thousands of dollars. This problem could have persisted for many months until an accidental revelation informed the owner of this critical failure in performance. A timely discovery by a mystery shopper, however, helped save the business from an unprofitable year.
Follow these guidelines and you can reap the benefits and avoid the pitfalls of mystery shopping
Define Your Goals
What do you want to know and what measurements will you use? What customer service techniques have you taught your staff? Greet the customer within 30 seconds? Use the customer’s first or last name? Always give them a brochure? You probably train your employees to execute a dozen or more activities with your customers, and you should always measure against what they have been trained to do, not what you might have done. As the owner, you have complete freedom to choose novel ways to work with customers, your employees do not. You should never criticize employees who are working with customers according to the rules that you gave them. You can use the mystery shopper reports to improve or expand training – without telling them they have been performing poorly. There will be many problems in customer service that are the result of poor training – it’s not the fault of your employees if your training didn’t cover a newly discovered shortfall.
1. Let Everyone Know – No Secrets
Alert your employees at hiring and once a year thereafter, that you use mystery shopping to find ways to improve the business – not to spy on individual employees. No one should be surprised that a mystery shopping event has occurred. This will lessen any feelings of a “big brother” watching over them.
2. Pick a Mystery Shopper Who Knows the Business
The best mystery shoppers are people who have experience in your field. They can see things that someone who is a complete novice can not see. Additionally, when they spot a problem, they have the background to suggest solutions – you get more value from this type of report.
3. Reward Your Employees
A mystery shopping experience usually discovers much more that is right than is wrong. There will be some things you will want to correct, but much more that you will want to reward. Turn your mystery shopping research positive and reward employees for doing things right, and add training to improve performance shortfalls. Positive motivation is always the best choice in assuring that your staff remains committed to the success of your business. Only after repeated failures in two or more separate mystery shopping research experiences should you meet with a disappointing employee, privately, to discuss a shortfall in performance and take any necessary action.
4. Create or Approve the Final Report in Advance
Go over the form that the mystery shopper will be using with the mystery shopper in advance. You both have to understand and agree on how each category will be monitored and graded. Don’t wait until the report is in your hand before you try to interpret it. Complete understanding of how everything will be measured helps assure an actionable report that you can use to improve your business.
Mystery shoppers can provide a keen insight into how your customers see your business and understanding your customers is the most basic marketing tool at our disposal.
Real Live Customer Service
Perhaps one of the most important customer service advantages that a small business enjoys compared to large corporations is the ability of the customer to call the company and actually talk to a person. Big companies have dropped any pretense of wanting to actually talk to their customers and have created an intricate system of Internet forms and VRUs to funnel the customer into cost-efficient “interactions”.
Customers, of course, hate this method. It is time-intensive for the customer and provides little or no closure to the problem. Will someone respond to my complaint or question? Only time will tell.
Of course, customers can try the small business alternative of these behemoths, they know that there’s somebody at the other end of the line to talk to. Even in online marketing, it’s the owner who’s responding to the email, not an employee. Isn’t one to one marketing the key advantage of small business marketing?
Marketing Execs Point to an Online Future
A global survey of 410 marketing executives conducted by the McKinsey consultant group found universal agreement that online marketing would increase by 2019. For those of us in small business who thought that online marketing already had conquered the marketing world, the modest results are a little surprising. By 2019, these execs expect to see 10% of their revenue come from online sales compared to about 5% today.
European companies are slightly ahead of their American counterparts in using online marketing tools, although high-speed Internet development in Europe lags behind the access level in the United States.
Additionally, 15% of respondents said they are already experimenting with selling products in virtual worlds. More familiar marketing techniques such as emails, display ads, and paid keyword advertising are still the dominant online marketing tools.
One unexpected finding reported by McKinsey was that the importance of online advertising in the brand building was seen as just as important as sales. Many of these respondents are using blogs to test new product ideas among potential customers.
The increasing use of blogs is one trend that will be interesting to watch in the future of small business marketing. More information is available on the McKinsey or other Global management consulting company.
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