Marketing is one of the most underutilized and misunderstood disciplines of small business. The objective of marketing is to own real estate in the mind of the prospective customer. Building a visible brand and image is critical to the long-term success and viability of any business. Great businesses are built on great brands. Close your eyes for a minute and think of some of the businesses that you patronize today. Do you remember their logo? Do you remember the color scheme in their store? Do you remember the quality of service you receive? All of these things factor into the brand and image of your company. Your brand and image should differentiate you from your competition. Your brand and image should reflect your products and what you stand for. Your brand image should be memorable.
Brand and image is just one part of a marketing plan. Another key component is customer identification. Have you answered the question, “who is my customer?” Have you completed a demographic analysis of your customers? What is customer demand for your product? These are all questions that are part of preparing a marketing plan.
Every business has competitors. The competitive bar in every industry sets the pricing, customer expectation, and the processes and procedures by which products and services are delivered. It is essential that every business understands their competitive environment and diligently seeks ways to differentiate themselves from their competitors. Businesses that don’t differentiate themselves from their competitors will ultimately fail. We’ve recently engaged a client in the food service industry whose business was failing miserably. In comparing their pricing and operating costs to their competitors offering the same type of restaurant services it became immediately apparent they were uncompetitive. The quality of their service did not meet industry standards, their pricing was not appropriate for their market and the quality of their food presentation was marginal. This business was doomed to failure because they did not meet their competitor’s standards. This particular business had not studied and understood the operational and financial metrics of the food service industry. Understanding key performance metrics in your industry will help you remain competitive in your marketplace.
Every business needs to do a certain amount of advertising and promotion. There is considerable debate and discussion about what type of advertising promotion is the most effective. Much of that discussion hinges on the type of business. Advertising and promotion for a construction company is considerably different from that of a grocery store. Some very successful businesses can spend in excess of 20% of their budget on marketing and advertising. One Weavers client in the window replacement business spent 18% of their income on advertising. Their business generated in excess of $800,000 of pretax operating profit.
A solid marketing plan also defines the price points for your products and services. Establishing the selling price of your company’s products and services is critical. If your prices are too high, products won’t sell. If your prices are too low, you will fail to make a profit.
Finally, every business in today’s marketplace should have a website. A website is not necessarily required as a sales tool; however, a business today without a presence on the internet has virtually no credibility in the marketplace. Any business that expects to grow and prosper in 2010 and beyond must develop a robust web presence.