One of the greatest needs of managers of
business is to understand and develop marketing programs for their
products and services. Business success is based on the ability to build a
growing body of satisfied customers. Modern marketing programs are built
around the "marketing concept," which directs managers to focus
their efforts on identifying and satisfying customer needs - at a profit.
Marketing continues to be a mystery . . . to those who create it and to
those who sponsor it. Often, the ad that generates record-breaking volume
for a retail store one month is repeated the following month and bombs. A
campaign designed by the best ad agency may elicit a mediocre response.
The same item sells like hotcakes after a 30-word classified ad, with
abominable grammar, appears on page 35 of an all-advertising shopper
tossed on the front stoops of homes during a rainstorm! The mystery eludes
solution but demands attention.
Your marketing results can be improved through a better understanding
of your customers. This approach usually is referred to as the marketing
concept.
Putting the customer first is probably the most popular phrase used by
firms ranging from giant conglomerates to the corner barber shop, but the
sloganizing is often just lip service. The business continues to operate
under the classic approach - "Come buy this great product we have
created or this fantastic service we are offering." The giveaway, of
course, is the word we. In other words, most business activities,
including advertising, are dedicated to solving the firm's problems.
Success, however, is more likely if you dedicate your activities
exclusively to solving your customer's problems.
Any marketing program has a better chance of being productive if it is
timed, designed and written to solve a problem for potential customers and
is carried out in a way that the customer understands and trusts. The
pages that follow will present the marketing concept of putting the
customer first. Marketing is a very complex subject; it deals with all the
steps between determining customer needs and supplying them at a profit.
The Marketing Concept
The marketing concept rests on the importance of customers to a firm
and states that:
All company policies and activities should be aimed at satisfying
customer needs, and
Profitable sales volume is a better company goal than maximum sales
volume.
To use the marketing concept, businesses should:
Determine the needs of their customers (Market Research);
Analyze their competitive advantages (Market Strategy);
Select specific markets to serve (Target Marketing), and;
Determine how to satisfy those needs (Market Mix).
Market Research
In order to manage the marketing function successfully, good
information about the market is necessary. Frequently, a small market
research program, based on a questionnaire given to present customers
and/or prospective customers, can disclose problems and areas of
dissatisfaction that can be easily remedied, or new products or services
that could be offered successfully.
Marketing Strategy
Marketing strategy encompasses identifying customer groups (Target
Markets), which a small business can serve better than its larger
competitors, and tailoring its product offerings, prices, distribution,
promotional efforts and services towards that particular market segment
(Managing the Market Mix). A good strategy implies that a business cannot
be all things to all people and must analyze its markets and its own
capabilities so as to focus on a target market it can serve best.
Target Marketing
Owners of small businesses have limited resources to spend on marketing
activities. Concentrating their marketing efforts on one or a few key
market segments is the basis of target marketing. The major ways to
segment a market are:
Geographical segmentation - developing a loyal group of
consumers in the home geographical territory before expanding into new
territories.
Product segmentation - extensively promoting existing
best-selling products and services before introducing a lot of new
products.
Customer segmentation - identifying and promoting to those
groups of people most likely to buy the product. In other words, selling
to heavy users before trying to develop new users.
Managing the Market Mix
There are four key marketing decision areas in a marketing program.
They are:
Products and Services,
Promotion,
Distribution, and
Pricing.
The marketing mix is used to describe how owner-managers combine these
four areas into an overall marketing program.
Products and Services
Effective product strategies for a business may include concentrating
on a narrow product line, developing a highly specialized product
containing an unusual amount of service.
Promotion
This marketing decision area includes advertising, salesmanship and
other promotional activities. In general, high quality salesmanship is a
must for small businesses due to their limited ability to advertise
heavily. Good yellow-page advertising is a must for small retailers.
Direct mail is an effective, low-cost medium of advertising available to
small businesses.
price
Determining price levels and/or pricing policies (including credit
policy) is the major factor affecting total revenue. Generally, higher
prices mean lower volume and vice-versa, however, small businesses can
often command higher prices due to the personalized service they can
offer.
Distribution
The manufacturer and wholesaler must decide how to distribute their
products. Working through established distributors or manufacturers'
agents generally is most feasible for small manufacturers. retailers
should consider cost and traffic flow as two major factors in location
site selection, especially since advertising and rent can be reciprocal.
In other words, low-cost, low-traffic location means you must spend more
on advertising to build traffic.
Marketing Performance
After marketing program decisions are made, owner-managers need to
evaluate how well decisions have turned out. Standards of performance need
to be set up so results can be evaluated against them. Sound data on
industry norms and past performance provide the basis for comparing
against present performance.
Owner-managers should audit their company's performance at least
quarterly. The key questions to ask are:
Is the company doing all it can to be customer-orientated?
Do the employees make sure the customer's needs are truly satisfied and
leave them with the feeling that they would enjoy coming back?
Is it easy for the customer to find what he or she wants and at a
competitive price?
