May 4, 2019 366
May 4, 2019 366
This article is to guide the businessman, who is not a professional, through the process of marketing. By following the process the reader is assured he or she will pay attention to crucial marketing activities which if unattended to or improperly handled, can make the difference between corporate success and failure.
It is very important for every company to have a clear vision. Your vision of your company is your mental image, picture or dream of the kind of company you are creating. It is a picture of that company you seek to build.
An entrepreneur can describe the vision in terms of what you want the company to be known for. A company may want to be known for “excellence”, “value for money’, “innovativeness”, “first-class service” “courteous service”, or “honesty”. A company may also be known for its inexpensive but functional products.
A vision is useful and, in fact, essential in every business. It defines the uniqueness that you want to create so as to give you an edge over your competitors. To be assured of survival in the market place, every company should seek to be different from others in some respects that are valued by the customer.
Therefore, every company should endeavor to have some distinctive competence or competitive advantage. There should be something the company does so well that gives it an edge over competitors.
A lawyer may be known for “closeness and good rapport with clients” or for that special talent in initiating and handling out-of-court settlements. A drugstore may be reputed for not selling fake or expired drugs. A spare parts dealer may be known for honesty and sale of “genuine” spares. Such a reputation comes from deliberate visioning and years of cultivating and nurturing such a vision. A good vision statement establishes a basis and a threshold for the company’s marketing activities.
Some examples of vision statements are:
Irrespective of products or services a company produces the users and potential users are likely to be a mixed multitude of people who differ in terms of socio-economic variables such as age, income, occupation, marital status, family size, location, education, social status, and religion. Or they may vary considerably in terms of their personality types.
Any of these variables then can be the basis for differentiating the users and potential users of the product and for deciding on the specific group or groups to serve. A transporter may specialize in passenger bus service as distinct from taxi-service and thus serve only that group that travels by bus.
A shoe manufacturer who chooses to make only children’s shoes or women’s shoes or even shoes for only high-income women has, by so doing, choose the group to cater to.
Finally, a company can choose to make or sell to two or more different customer groups or target markets or to just one group only.
A classic example of a business type that caters to multiple groups but with variants of the same basic service is the barbing saloon. Every barbing saloon gives different customers different hairstyles depending on their preferences.
Similarly, many shoe factories produce different kinds of shoes for different classes of customers. For example, some shoe factories produce for children and adults alike men and women, and for the low income and high-income classes.
Some private schools specialize in primary education only while others have a nursery, primary and secondary divisions. Some schools are for girls only while others are mixed. A law firm or private medical center may target high net-worth individuals and corporate clients only. A management consultancy firm may specialize in training or in market studies only thus targeting a particular group of clients.
Once a business has decided on the customer group to serve, it must design its products, price, promotion, and distribution to suit and serve the group effectively and efficiently. This principle is based on the idea that the business should provide and deliver satisfaction to the customer and that one way to do this well is to produce for, and concentrate on, a specific class or classes of customers.
It should be noted here that the decisions about which classes of customers to target has to be based on a thorough knowledge and understanding of customers and potential customers, their needs, preferences, income, willingness to pay, their motives for buying or not buying. It will also take into consideration the capabilities of the company and the perceived profitability of each segment.
Lastly, the size of each market segment is a major consideration in segmentation and target market selection.
New products are essential for corporate survival and growth. That is why we often say that in business the maxim is “innovate or die”. A firm that is not innovative can quickly become obsolete. There are many reasons why firms must innovate.
The decision to offer a product or service or to develop a new one has deliberated so as to ensure success. This is of particular importance because of the high mortality rate of new products.
Before a new product is added to the company’s product portfolio, it would normally have gone successfully through the following stages of development.
This elaborate process for developing new products underscores the need to thoroughly and critically collect and analyze data about the feasibility or otherwise of the proposed product before investing huge sums of money on it.
This is imperative for every new product or service, irrespective of the size of the organization. Many new products and new companies fail in the market place because management either did not bother at all to take them through the above process or they did a bad job of following the process.
A key determinant of product acceptance and therefore product performance in the market place is product design. The design of the product, in the case of goods (tangible products), concerns the following aspects:
In the case of services or intangible items such as those offered by fashion designers, legal, medical, tailoring, restaurant, banking, transportation, and retail businesses, product design will include:
Management needs to pay attention to these attributes, which, by and large, the determinants of the quality, image, performance, durability, reliability attractiveness, competitiveness, and acceptability of the product.
It should be noted also that goods and services offered by different establishments differ in these respects and therefore command correspondingly different levels and kinds of patronage. Product design is so crucial to business survival that many business enterprises are pre-occupied with ensuring that it is right.
Some even believe that a good product sells itself. There is no doubt that a good product is a lot easier to sell than one that is not good. But, it should be understood that what constitutes a good or a bad product depends on preferences, expectations, and evaluations by the customer or potential customer.
Irrespective of the quality of the inputs or the ingenuity of the designer the ultimate judge of the market-appropriateness of a product is the customer. A clear illustration of this principle or philosophy is to be found in the dressing patterns among today’s youths, especially among the female folk. What they put on may appear indecent, covering too little and exposing too much. But that is what they prefer and that is what market appropriate is. That is what sells!
We all know that every business must decide on the price tag for its product. We need to consider these few questions:
These and other related questions and the possibilities which they throw up should help to illustrate the complexity of pricing and the need to exercise care at price-fixing.
As a general guide in fixing or changing the price of a product, management should consider the following factors:
Whatever the case, it is not good practice to change your prices or fees too often. Management should, therefore, resist the temptation to change the price in response to every wind and tide. In addition, price changes should be planned, announced and publicized well in advance of their effective dates.
Finally, management should avoid the temptation to change its prices simply because competitors have altered theirs. Conditions facing your competitors may not be the same as yours. Therefore, what seems appropriate for one firm may be disastrous for another.
The distribution consists of all activities whose purpose is to get the product to the user safely, expeditiously and economically. Its goal is to get the product to the right place at the right time and in a cost-effective manner.
The four key issues which marketing management should be concerned about in distribution are channel choice and management, transportation, storage, and inventory management.
A distribution channel is a route in which the product and its ownership take on their way from the producer to the consumer. It consists of the producer, the consumer and all the intermediaries who take part in the transfer of the title (ownership) from the producer to the consumer or user.
In practice, the choice feeing the company is whether to use the services of independent wholesalers and retailers. The alternative is to dispense with their services and use company-owned wholesale and/or retail outlets as deemed appropriate.
This translates into the following three channel options:
The second area of management concern in distribution is the transportation of the goods from the factory or wholesaler or retailer to the final consumer. This can be achieved through the use of the road, rail water or air transport or any combination thereof.
In making a choice, the following factors should be taken into account: the nature of the product (in terms of size, weight, fragility perishability and value), the distance, cost, safety and availability of the specific means of transport. Other considerations are the reliability of the mode of transport, the speed, and the reach or coverage.
The third management concern in the area of distribution is storage or warehousing. Although storage can be discussed under inventory management, it has been singled out here to underscore its significance. Storage is necessitated by the fact that, in our economy, much of the production that goes on is in anticipation of demand. It is also the case that urgent demand cannot await fresh production; it has to be met from existing stock.
There are basic warehousing questions which management must address from time to time are:
Some of the factors that will determine corporate policy on this issue are the size and geographical spread of the market, the cost of building and renting warehouses and the preference of management. For the majority of small firms, only a relatively small warehouse is necessary for a view of either the scale of operation, the size of the market or the available capital. Consider, a small-scale factory which manufactures candlesticks or shoes for sale or a bookshop or a hardware store, there is usually no need for a large warehouse because the firm cannot afford to tie down so much capital in inventory. The desire, therefore, is to keep stock at a minimum.
With the popularity of just-in-time inventory management, the idea now is to order for needed items as close as possible to the time they are needed. The motivation for this is to keep down inventory cost, reduce the need to tie down much-needed capital and take advantage of the improvement in information manufacturing and transportation technologies.
Inventory management or stock control as it is sometimes called is concerned with the following basic questions:
In answering these questions the company seeks to minimize the total cost of placing and processing orders and the cost of holding stock. Small but frequent orders increase the cost of placing and processing orders but minimize the cost of holding large stocks of goods. To strike a balance between both types of costs and minimize overall cost while being mindful of the need to prevent unnecessary stock-outs and overstocking, the Economic Order Quantity (EOQ) has to be determined. While the details of EOQ are outside the scope of this book, even the small firm has to be mindful of all the issues raised above.
Generally, in formulating policies and making other decisions in the area of distribution, it is important to ensure that the goods or services being provided are made available to the consumer when and where he needs them and at reasonable prices.
In the special case of services, availability and accessibility can be achieved by the use of multiple branches, multiple service-points, weekend opening hours, 24-hour service or other extended opening hours and the provision of services to special clients in their homes/offices at an extra cost.
In today’s business world, every business needs to create awareness for its products. This is necessitated by the fact that a product produced in one town or country may be needed in other towns or countries.
Even though the market for the product is limited to one village or city, awareness creation is still a necessity in view of the intensively competitive environment in which every business operates today. This awareness is created through promotion. Promotion can also build up brand preference and brand loyalty as well as stimulate product trial, among other things.
Promotion is the process whereby an establishment, individual or group communicates with an audience of customers and potential customers with a view to:
Promotion is a careful and deliberate process of creating and delivering messages to the market about the promoter and his products. Its purpose is to create product awareness and a favorable image for the organization and its products. It can also be used to stimulate store traffic, product trial, repeat purchases, and brand loyalty.
Promotion can be achieved through any of the following component tools:
From the foregoing, it should be obvious that advertising sales promotion and public relations are distinct professions which are best practiced by experts’ area – namely advertising agencies and public relations outfits. They are adept in message conception, creation, delivery and control.
The small-scale entrepreneur some of the key points to note about promotion area follows:
There is a need to ensure that the company’s product policies and strategies promote a healthy and positive relationship with all stakeholders and the wider society.
There is a need for deliberate, constructive and purposeful communication with all the stakeholders of the firm with a view to creating awareness, knowledge, and acceptance of the company in the minds of all.
Rumors and misinformation about the company are destructive and need to be managed (prevented identified and dealt with) from time to time.
For a small fee, management can secure the services of advertising agencies and public relations consultants either on an ad hoc or partnership basis.
It is good business practice to choose your own business’ name (original) and your own brand name, develop them and create awareness for them through promotion rather than illegally using the brand name of some other popular manufacturer or firm.
Vote a proportion of your sales for promotion annually in order to ensure adequate funding.
A business card (also popularly called a complementary card) is now a necessity in business. It tells the world who you are, the business that you do and where and how you can be reached. Therefore, it should contain the name of your business or company, your business address, telephone, fax, and post-office box number and your designation.
Try to use good quality paper for the card. It should not be cluttered. The worst advertisement that you can give your company is that it is a jack-of-all-trades. Finally, the production quality of the card should be high.
Every business organization ought to have a signboard. A neat uncluttered board draws attention to the business.
Advertising and other promotional materials should be carefully designed and produced to appeal to the sensibilities of the consumer,
Promotional materials should use a single or a few appeals at a time. The appeal should present the unique selling proposition (U.S.P.) of the product. The unique selling proposition is that single compelling reason why buyers and users should prefer your brand to substitutes.
Not overcrowd or overload your promotional materials with messages, texts, and graphics. Use different font’s styles, sizes, and colors for contrast maximum readability.
Use the channel or medium that will most directly and most selectively reach your target audience. There is no point advertising a product sold locally on national radio or a national newspaper. A local medium will be more economical.
In all promotional materials, ensure that all your claims are truthful, substantiated or can be substantiated. Avoid puffery and exaggerated claims. Do not cast aspersions on competitors and their brands; it could backfire.
Participation in trade fairs and exhibitions can give your company the much-needed publicity and opportunity to meet new suppliers and distributors with whom you can do business.
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