Marketing Starts with Your Customers
Your marketing plan details how you intend to meet your customers’ needs and communicate the benefits of your products or services to them. When deciding about market positioning, pricing, promotions, and sales, your customers should be top of mind.
The Four Key Components of Your Plan
Your marketing plan should describe how you will segment your target market, how you will position your products or services compared to your competition, what your pricing strategy will be, and how you will effectively reach and influence your customers.
1. Your Target Market
Your target market is a group of customers that has a similar need for a product or service, money to purchase the product or service, and willingness and ability to buy it.
To identify your target market and best serve your market, you need to:
- Know your customers
- Understand what your customers need
- Why they buy
Because you have limited time, resources, and budget, you cannot be everything to everyone. To effectively reach customers, you need to segment your target market into one primary market on which you focus most of your energy, and at most three secondary markets.
You can segment your target market along four key characteristics:
Psychographic: Why do they buy? Include information such as:
- Social class (lower, middle, upper)
- Lifestyle (leisure activities, exotic vacationer, saver)
- Personality (gregarious, authoritarian, ambitious)
2. Your Market Positioning
Positioning is the image of your product or service that you create in the mind of your target market. Your goal is to create an image that’s unique, differentiated, and definable in the mind of your customers. To position your product or service, try the following:
It’s essential that all of your marketing materials support the position or image you are creating.
It’s also critical for you to know your present and potential competitors, both direct and indirect. Examine their strengths and weaknesses relative to yours. This will help you select a market position that provides a competitive advantage.
Your overall position should emphasize those factors that your customers value most, and those which make you stand out from your competition.
3. Your Pricing Strategy
Price is a very important factor in your marketing plan. It affects:
Key factors that affect your pricing strategy include:
4. Your Promotion Strategy
Promotion is the activity of informing, persuading, and influencing your customers’ purchase decisions.
The type and scope of promotional activities that you need to undertake will depend on what the promotion is intended to do, and what goals and objectives you want to achieve. There are a number of reasons for promotional activities:
Your choice of promotional activities will be determined by a number of factors, including:
There are four general types of promotional activities:
1. Advertising. There are three core reasons for advertising:
2. Sales promotion. Sales promotions focus on short-term incentives to encourage sales of your products and/or services.
3. Publicity and Public Relations. Also generally known as PR, publicity and public relations exercises expose your company to the public:
4. Personal Selling. This type of promotion involves a direct, face-to-face relationship with your customer. It includes explaining or demonstrating the features and benefits of your products and/or services in an attempt to persuade the customer to buy.
- Behaviouristic: How do they buy? Include information such as:
- The purchase occasion (household staples, special occasion)
- Benefits sought (quality, service, economy)
- Consumption status (from never having tried your product to frequent purchaser)
- Usage frequency (light, medium, heavy)
- Loyalty (not, somewhat, devout)
- Readiness to buy (unaware, aware, informed, interested, desirous, intending to buy)
- Attitude toward product (enthusiastic, positive, indifferent, negative, hostile)
- Create a list of your competitive advantages. Advantages might include higher quality, lower cost, or better technical support.
- Select the “right” competitive advantage for your product orservice.What you choose, or which “bundle of benefits” you choose, will depend on who amongst your competitors has chosen the same position. Some competitive advantages might be too costly to develop, inconsistent with other services or products, or simply not strong enough in the marketplace.
- Your sales volume and profits
- The actions of your competitors
- The image of your products and/or services, your company, and your presence in the marketplace (i.e., your retail location, your website, etc).
- Your customers’ ability and willingness to buy. Ability to pay is determined by your customers’ income level. Willingness to buy is determined by your customers’ taste, need, perceived value, and where your products and/or services rank on your customers’ level of importance.
- Perceived value of your product or service. You can determine the perceived value of your product or service by asking your customers how much they would be willing to pay for the same service in a different setting. Or, if you are contemplating adding a new feature or benefit to your product or service, ask them how much they would be willing to pay for the improvement. It is perceived value that decides the price that your customers are willing to pay.
- Your costs. Your prices must cover both your fixed and variable costs, and allow you a reasonable margin for profit.
- Your competition. How do your prices compare to similar products and/or services offered by your competitors? Do you offer extra features or benefits for which you can charge a premium? Have you clearly differentiated your business and your products and services from those of your competitors (both direct and indirect)?
- Introduce a new product or service
- Enter a new market
- Obtain a new dealer outlet (for manufacturers or distributors)
- Increase or maintain sales
- Build or maintain the image of your business and of your products and/or services
- Support other selling efforts
- Reach customers inaccessible by your salespeople
- Educate the public
- Product/service type
- Market segment
- Stage in the life cycle
- Competitive activity
- Distribution channels utilized
- Information. If you are opening a new store or introducing a new product, you must build consumer awareness of your existence. Promotion of a new store(s), or products that are early in their product life cycle, should be geared towards providing information.
- Persuasion. You want to persuade potential customers that you have the product or service that best their needs.
- Awareness/Reminder. You want to regularly remind your customers that your product or service is still available, the unique benefits of your product or service, and/or where they can purchase it.
- Consumer promotions include samples, coupons, rebates, contests, and demonstrations.
- Trade promotions include buying allowances, free goods, co-operative advertising, and dealer sales contests.
- Sales force promotions include bonuses, contests, and sales rallies.
- Trade shows allow you to show your product, meet new buyers, learn more about your competition, and monitor changes in your industry.
- Publicity are programs and activities that give your company exposure through news releases, feature stories, and editorial comments. To obtain this exposure for your business, it can be helpful to research effective campaigns/events of others in a related industry.
- Public relations is the promotion of your company’s image and identity. The intent of PR is to create goodwill, a good reputation, and positive word-of-mouth by promoting your company’s good work or services. Remember, word-of-mouth from a satisfied customer is one of the most persuasive forms of promotion.