MARKETING Market research market strategy target market market mix Market Research

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1 MARKETING Marketing is the management process for identifying and anticipating customer requirements profitably. All company policies and activities should be directed toward satisfying customer needs. Those setting up their own business should remember that profitable sales volume is more important than maximum sales volume. There are four steps to successful marketing: 1. Market research may be carried out to determine the needs of potential customers 2. Analyze competitive advantages to develop a market strategy 3. Define your target market 4. Determine how to satisfy customer needs by identifying a market mix 1. Market Research Before undertaking any research you need to be clear about what you want to find out. Here are some of the questions you might want your market research to answer: What are your products/services? Is there a demand for your product/service? What is the euro size of your markets? You need to assess the profitability of the sector which you intend to enter. What is your sales and distribution setup? What geographic area will you sell to? How critical is location to your business? Profile your prospective customers look at population, demographics, income levels, etc. Study your competitors who are they, how many are there, what are their strengths/weaknesses? If you are able to answer these, and perhaps other questions satisfactorily, you should be in a position to estimate the amount of sales you are likely to achieve. The key question is will these sales be sufficient to allow you to operate a viable business? Successful marketing requires timely and relevant market information. An inexpensive research program, based on questionnaires given to current or prospective customers, can often uncover dissatisfaction or possible new products or services. Market research will also identify trends that affect sales and profitability. Population shifts, legal developments, and the local economic situation should be monitored to quickly identify problems and opportunities. It is also important to keep up with competitors' market strategies.

2 Conducting your market research: 1. Identity and define the problem Defining objectives is highly important to a marketing campaign. A lot of time can be wasted performing market research on the wrong problem. 2. Analyse the situation An analysis of the situation is an informal survey of what information is available in the problem area. It will help you prioritise the information you need. It is important to carry out secondary research before primary research, as an expensive primary research survey may be commissioned to provide information already available from secondary sources. Sources of information include: Government agencies such as Enterprise Ireland ( Shannon Development ( Údarás na Gaeltachta ( City and County Enterprise Boards ( Chambers of Commerce or Specialist Trade Associations Local libraries, business magazines and journals, census information, banks, etc. 3. Pre-study field research to ensure that you are seeking relevant information. Focus on facts, revert to your list of questions and see if you are answering them. Collecting interesting but irrelevant information is time-wasting 4. Data collection method - concept and test your questionnaire. Make sure that the questions are understandable and will give useful answers 5. Field research Asking the questions. It is important to select a varied sample group. Do not base market research only on the opinion of friends and family. You may not get honest opinions. 6. Data processing Analyse and interpret the information received 7. Reporting Presenting the information. Research findings and conclusions should be acted upon and should form a basis for the marketing plan 2. Marketing Strategy A marketing strategy identifies customer groups which a particular business can better serve than its target competitors, and tailors product offerings, prices, distribution, promotional efforts, and services toward those market segments. Ideally, the strategy should address unmet customer needs that offer adequate potential profitability. A good strategy helps a business focus on the target markets it can serve best. Getting your new products/services to market effectively and efficiently is the key to market penetration, sales growth and profitability. This requires detailed market planning including product launch and sales strategies and should be included within your business plan. A SWOT analysis is a structured approach to evaluating the strategic position of a business by identifying its strengths, weaknesses, opportunities and threats. It provides a simple method of synthesizing the results of the marketing audit. Once a SWOT analysis has been completed, thought

3 can be given as to how to turn competitive weaknesses into strengths and threats into opportunities. Be realistic do not select options which are not likely to be viable or which might be impossible to achieve. Your marketing plan should be based on the latest market intelligence and research, should detail your company s competitive position and consider both the opportunities and risks in the marketplace. You need to highlight your attributes: how can your company differentiate itself from the competition? Your marketing plan should also establish the most effective marketing actions required to achieve your objectives and goals. 3. Identify your Target Market Owners of small businesses usually have limited resources to spend on marketing. Concentrating their efforts on one or a few key market segments - target marketing - gets the most return from small investments. There are various methods used to segment a market: 1. Geographical segmentation - Specializing in serving the needs of customers in a particular geographical area. For example, a convenience store may send advertisements only to people living within one-half mile of the store. 2. Customer segmentation - Identifying those most likely to buy the product or service, (based on age, gender, education, occupation, income, status, values, attitudes and lifestyle, etc.) and targeting those groups. By targeting a specific market, strategies for designing, pricing, distributing, promoting, positioning, and improving your product, service or idea are made easier, more effective, and more cost-effective. 4. Marketing Mix Every marketing program contains four key components which are combined into an overall marketing program: Products and Services Price Promotion Place. Products and Services Defining the product or service you offer is a critical first step to marketing your business. Product strategies may include concentrating on a narrow product line, developing a highly specialized product or service, or providing a product-service package containing unusually high-quality service

4 Price - The right price is crucial for maximizing total revenue. Generally, higher prices mean lower volume and vice-versa, however, small businesses can often command higher prices because of their personalized service. Successful businesses maximise their profits by matching their pricing with the value customers put on their products or services. The price you charge will determine your margins and your own salary. Price is closely connected with the credibility and quality of your product or service. You should constantly survey the competition to monitor their prices. Once you have established your price, it is very difficult to increase it without losing customers. Promotion - Promotion strategies include advertising, personal selling, sales promotions, public relations, on-line marketing and direct customer interaction. Good salesmanship is essential for small businesses because of their limited ability to spend on advertising. Good telephone book advertising is also important. Direct mail is an effective, low-cost medium available to small business. Other methods of promotion include advertisements in regional newspapers, brochures, posters, participation in trade exhibitions, markets, etc. Place The physical criteria required for the successful operation of any business needs to be determined well in advance. How much space is needed? Consider your requirements: an office will need desks, phones, photo-copier, fax machine, reception, etc. A factory/work-shop may need to consider transport, loading/dispatch areas, electrical needs, weight of machinery, environmental issues, health & safety issues, etc. Is planning permission required? Will you buy or lease? What are the insurance costs? It is vital that you consult a solicitor before signing documents or make verbal agreements on property. A lot of research is needed before choosing the right location for your premises. You need to know about traffic flow (vehicles and pedestrians), parking, types of customers in the area and their spending patterns, what other traders in the area think of the location and you also need to be aware of any proposed developments in the area. The nature of the product or service is also important in making decisions. High traffic and visibility are critical for certain products. Location is less of a concern for products or services that customers are willing to go out of their way to find. The continuous advances in technology have enabled certain small businesses to operate from any location yet serve national or international markets. MARKETING PERFORMANCE Performance should be evaluated to understand how well or badly your marketing programme is working. Marketing is a continuous process. Standards are needed to compare with actual results. Researching industry norms and past performance will help to develop appropriate standards. The key questions are: Is the company doing all it can to be customer-oriented? Do employees ensure the customers are satisfied and leave wanting to come back?

5 Is it easy for the customer to find what he or she wants at a competitive price? Set realistic targets and measure your performance. What are your expectations for the first year in business? Are they being met? Is your customer profile accurate? Are you targeting the right type of customer? Are your marketing methods appropriate the market is continually changing, your marketing plan should anticipate these changes and be in touch with the latest trends. The right marketing plan can help deliver the vision you have for your business.