What is Marketing?

Marketing is the art of appealing to people's needs and wants in a way that they become attracted to your business and interested in your products and services. Successful marketing involves researching your target market and competition to determine what the customer needs so that you may satisfy those needs. Once you determine your customers' needs, you must show your customers how your product or service offers them a benefit. For example, Revlon sells cosmetics through effective marketing. Revlon convinces customers that cosmetics will offer them a benefit - customers will look more attractive while using Revlon's cosmetics. Some organizations such as the Body Shop promote their products by promoting the effective use of the environment. The Body Shop uses natural ingredients in their products and frequently donates resources to environmental preservation projects.

Market Research

Effectively researching your market provides a relatively accurate base for making profit assumptions as well as developing short and long term goals. Market research also provides insight for alternate approaches to providing your products and services.

This part of your marketing plan will help you to determine who your customers are, where they live, why they will buy from you and how to inspire their loyalty.

Is there a group of people underserved in a particular area?

What are their needs and resources?

Is your service or product essential in their day to day activities?

Can your customer afford your service or product?

What areas within your market are declining or growing?

What is the general economy of your service or product area?

Many entrepreneurs collect market data through surveys, focus groups, local libraries and the chamber of commerce.

Some organizations collect demographic information and will share this information with you for a fee. One such organization is American Demographics, INC. P.O. Box 68, Ithaca, NY 14851.

Develop Product or Service Ideas

After you determine consumer needs and wants, the key to success is to develop a product or service that meets their needs. For example, you may live in an area which is visited by a large number of tourists each year but is lacking lodging. A bed and breakfast may represent a successful business opportunity for you.

Research the Industry

You will want to gather as much information as possible about the industry you want to enter, including industry trends. For example, as a potential bed and breakfast owner, you might want to know the history of the bed and breakfast movement. If you are a craftsperson, you might want to know which crafts are most popular now and what colors are in fashion. Resources to gather this information include professional associations and the public library system. A business reference entitled Standard and Poor's Industry Survey contains up to date information on various industries.

Research Your Competition

You will need to know who your competitors are, where they are located, and whether or not they are successful. You will also need to know price ranges for their products and services, special services offered, their reputations and how they promote their business. You need to know your competitors' strengths, weaknesses and how they compare to your strengths and weaknesses. You will need to know this information to develop ways to give your customer incentives to buy from you rather than your competitors.

Ways to Develop a Competitive Edge:

Research the Target Market

After you identify consumer needs, develop an idea, research the industry and competitors, you will need to define and research your target market, otherwise known as your primary market. You will also need to develop your secondary market. Your target market is a segment of the market that you feel your business can serve most effectively. Not everyone will be interested in your product or service, so you will want to target a very specific set of customers. Your secondary market consists of customers you do business with on a less frequent basis.

Answering the following questions will help you get a better handle on who you need to target.

1. Who will want to purchase my product or service?

Women? Men? Adults? Children? Singles? Couples?

2. What are their educational levels?

High School? College?

3. What age groups do they come from?

18-25?26-40?41-64?65+

4. What are their leisure activities?

Hobbies? Special Interests?

5. What kinds of lifestyles do they lead?

Travelers?

6. Where do they live?

Rural? Urban?

7. What are their incomes?

Less than $12,000? $12,000 - 20,000 etc.

8. What do they spend their discretionary income on?

Luxuries? Toys? Movies?

9. What are their occupations?

Homemakers? Professionals?

Test Your Product/Service Idea

One good way to test your idea for a product or service is to offer a free trial period to a small "focus group" - a representative group of your target market. This group can include friends, neighbors, or acquaintances. After they have tried your product/service, ask them for their feedback. Stress that their answers must be honest to help you with your evaluation. Ask your focus group for their likes, dislikes, preferences, whether they would be willing to purchase such a product and how much they would be willing to pay.

Based on the feedback you get from your focus group, you may find that you need to modify your product or service to make it more appealing to your target market so that it will stimulate sales. If your focus group tells you that they like the quality of the product but feel that it is to expensive, you will want to adjust your selling price.

Now it is time to figure out how to best appeal to your target market through a variety of promotional vehicles such as newspaper ads, radio, brochures, etc. In your three year business plan, you should budget money to be used specifically for marketing your business. Word of mouth alone may not be enough to attract the number of customers you will need to make the business successful.

To "get the most bang for the buck" with your advertising dollars, choose the most appropriate advertising methods for your particular target market and then develop a selling method that will attract readers/listeners. Your promotional efforts should be consistent, develop a distinctive image of your business, differentiate your business from other competitors and convince customers that your product is worth buying!

Notes:

T-Shirts

This section has provided you some basic marketing strategies. For more specific information you may want to participate in an advanced marketing workshop in the local area.

References:

Adapted from Entrepreneurship: Growing Success from the Ground Up (Western NC Entrepreneurship & Heritage Skills Education Committee of the NC Cooperative Extension Service) by Davina Hickman, Family and Consumer Agent, North Carolina Cooperative Extension Service, 1996.

Gerson, Richard F. PH.D., Writing and Implementing a Marketing Plan, Crisp Publications, Inc. 1991.

Mariotti, Steve, The Young Entrepreneur's Guide to Starting and Running a Business, Random House, 1996.