Marketing strategy SME entrepreneur
Note: This is an electronically generated translation. It may not be 100% perfect.Read more.
Marketing Strategy is the figurative mate of your company.
Without a marketing strategy and marketing objectives you have in fact no fixed target..
You do not know where your company stands for and what you want to achieve. You do to much on ad hoc basis and miss out most of the opportunities, with all its consequences for the continuity . For example you have a great product but no customers or the competition is fierce and there is hardly any profit made. Some good reasons to think about a marketing strategy before you dive in the deep. An SME company with a thoughtful marketing strategy is always in advantage of the competition.
Your marketing strategy begins and ends with whether or not to have customers. All other activities are of minor importance!
The customer buys a product or service, but simultaneously assesses the functioning of the entire organization. When something goes wrong in the chain than his sensors tell him that and he turn around to the competition. The customer is not only flown to the competition, but this customer will also give you negative publicity. This can be fatal in today’s Internet age in which a disappointed customer can bring a barrage of negative publicity. The number of potential customers decreases very rapidly, resulting in potential lost revenue, rising costs and the bottom-line will red.
Know more of the customer, then the customer of himself.
If you want to be successful, then make sure you know more of the customer, then customer of himself.
Who is your customer, age, gender, education, occupation, estimated annual income and family composition? What motivation plays a role in purchasing product or services? Is it reliability, prestige, power or perhaps affection which plays a roll in the motivation or are other other motives? What motivates customers to buy from you and not from the competitor? Analyse your target market first and then work out a plan how you can effectively reach your target group. Every action you take should be at least fulfill the expectations of the customer.
Market research is the use of subjective and objective research to gather information and analyse the revenue impact.
Brief, the gathering of information and knowledge which the turnover and gross profit are dependent on.
- Product Policy: what do you do on product development? Is your product range in line with market demand? Have you or do your competitor’s have patent rights to certain products?
- Price Policy: strong what are the price levels of the product range? What discounts are given? What are the cost prices? What conditions are applied?
- Distribution Policy: What distribution channels are available? Who are purchasing the products?
- Order Policy: How does the sales organization look like? In which countries and regions are you and the competition active? How is the support of the sales force organized?
- Promotion Policy: which target groups are actively worked on? What message do you have for the various target groups? What promotional tools are applied?
The aforementioned policies together forms the marketing policy.
On all policies separately a competitive analysis made, what are the strengths and weaknesses of the company compared to the competition. What are the opportunities and threats for the company? On the basis of information gathered and the knowledge obtained from the market will be determined how the company is going to profile itself. In this way there is guidance given to the company. Market research is certainly not perfect, but it reduces a number of uncertainties and reduced the risk of doing business.
Click above and determine by systematic market research to whom, how and where you are going to deliver your products.
- The company conducts research on sales and gross profit in the countries or regions where the company wants to be active.
- The company brings the price differences between countries and / or regions in card.
- The average selling price of the products and/or services in € …. per country/region.
- The average cost price of the products and/or services in each country/region € …..
- The average gross profit of the products and/or services in € …. per country/region. Sources of information mentioned.
- Which characteristics does the customer have in a specific country and / or region? (customer characteristics)
Age, male / female, annual income, family composition, educational level, profession, etc. Sources of information mentioned.
- Describe the general characteristics of your target group in different countries / regions and indicate the source of information.
- Why do the customer buys in a certain country and / or region? In other words what are the emotional drivers: peace, respect, power, affection.
- Describe the emotional motivations of your target group in different countries / regions and indicate the source of information.
- The company will be in the following countries / regions become active.
Substructure your choice.
Analyse the market on the basis of the following examples:
Click above for information, product policy, price policy, distribution policy, order policies, promotion policy, who is the customer, competitive analysis and sales analysis.
Product marketing policy
Your ambitions for your business is in line with of the marketing strategy.
Where do you want your company to be in about five years time? You probably have an idea what you want to accomplish with the company. The goal you have in mind must be translated into a marketing strategy. A good starting point for formulating your marketing strategy is through the marketing policy; product, price, promotion, orders, procurement and distribution policy.
Your product is the starting point of your marketing strategy and is probably the reason that you’ve started a company.
In itself is a good motivation, but keep in mind that a product unchanged not last forever. A product has a life cycle because users demands other technical and/or comfort desires. How long the life cycle of a product last is influenced by for example if the production costs can be reduced? Or is it possible to modify the product with enhanced features, which the user can appreciate?
Click above to study the life cycle of a product.
- What does the customer expect from the product or service?
- Which features has to meet the requirements of the customer?
- How and where will the customer use it?
- What are the characteristics of the product, dimensions and colours?
- What is the product name?
- What is there to say about the brand name?
- How is it differentiated versus your competitors?
How do you develop your product in the coming years?
How do you want the product portfolio of your company looks like in about five years time? Also remember what that means for the product development. What is needed to develop new products, where do you get the ideas from? Developing a product usually goes through the following phases: development, investment , testting and finally the product is launched..
Click here for a schematic views of product development.
Each product has a price. But the difference between cost and selling price is not just a standard calculation.
Price is what you pay. Value is what you get. – Warren Buffet 1930-, Americans investor
- What is the value of product or service for the buyer?
- Are there any price indication for the products or services in the market?
- Is the customer price sensitive?
- What discounts are offered to attract customers?
- What is your price position compared to your competitors?
The price component of the marketing strategy is associated with the added value of your product and/or service for the customer. what is the customer willing to pay for your product or service? Decide what price you can ask when you take into account the desired position in the market.
The selling price of a product is determined by market mechanism and not by the producers.
Customers are buying products if they need it and the price is an acceptable level. The only thing the supplier’s control is the total cost price that the supplier needs produce and apply it on the market. The total cost of a product consists of two components, the direct production costs and a portion allocated. The allocated part is a percentage of the total overheads and selling expenses. The cost price is an important indicator that tells you how efficiently the company uses the resources.
Click here for a schematic overview of a price breakdown.
The cost price of a product has multiple functions:
- The cost price indicates the sales price it must be sold to make profits, but beware if your selling price too high their no byers in the market for your products.
- The cost price is a means to determine how efficiently the company can put the products in the market.
- The cost price do you need to be able to determine the operating profit.
- The cost price do you need to determine the working capital (current assets) .
- The cost price you need to decide, do it yourself or outsource.
Promotion is highlighting your products with the aim to have a positive influence on turnover. An optimal promotion is therefore an important part of the marketing strategy.
How are you going to promote your product with advertising and other means of communication to bring the products of the attention of your potential customers? Think also of the various sales opportunities, such as the deployment of sales staff and / or internet sales. This part of the marketing strategy should determine the sales and promotion budget.
- How and when do you bring your marketing message to the target group?
- How do you want to reach your customers advertising, website etc.?
- What is the best season to promote products/services?
- What does your competition offer? And how does it affect your choice of promotional activities?
There are various possibilities to advertise, regional or national newspapers, magazines, radio/tv etc.
The decision to advertise is primarily depending on whether the target group is reached and, secondly, the effectiveness of the advertising. Is the turnover hereby positively influenced and at what cost?
The sales representative is in direct contact with the potential customer and is therefore ideally suited to exercise positive influence on sales.
The benefits of a sales representative, business relationships are maintained, explaining the details, answer directly on questions,close orders, and has an important signalling role in feeding back information to the company. The salesperson is the business card of the company, It is important how the employee presents himself and what kind of supporting tools he / she has.
Publicity means getting attention for products and or enterprise without any financial compensation in return.
All information about newsworthy products and whether the company will be eligible for editorials. Editorial articles have a great benefit because objective outsiders give the information. So be very alert on all new developments in your company and try to get editorial articles posted in the major media.
Sales promotion activities aimed at the purchasing behaviour of customers to have a positive influence on short term.
The sales promotion is designed to actively encourage consumers to purchase. Sales promotion is achieved through incentives and rewards that consumers must convince to “buy now” rather than later. A good example is, “buy now and pay next year”.
Order obtain policy
Order obtain policy is actively acquiring orders by the sales representative.
The sales representative is the business card of the company, the face to the outside world and therefore image is decisive for the company. In addition, the salesperson is always under pressure because orders must be booked. The sales representative must have special qualities in order to be successful in closing orders. The sales representative is selected on the following qualities, relationship builder, empathy, problem solving ability, should be able to recognize buying signals and closing the order. It goes without saying that the selection of the salesperson can not be left to chance, but that extreme caution is taken at the selection procedures. Be aware that the turnover of the company is dependent on the qualities of the salesperson..
Distribution is to determine which outlets the company is going to use to put the products into to market.
- Where does buyers expect to buy the product or service normally?
- If it’s a store is, what kind of store?
- How can you get access to the right distribution channels?
- Increases a sales force the turnover?
- What does your competition do, and what is it to learn from them and how to differentiate?
It is important to consider in your marketing strategy through which distribution channels you sell your products. Do you use intermediary parties such as the wholesale channel, or are your products directly sold to the end user? Or is it perhaps a component of an another product? In which regions are you active and for whom is your product is intended?
Each distribution channel is forcing the company to take into account the promotion policy, how will the market goals be achieved? Which promotions activities are being implemented? What is the pricing policy which discounts etc., in short there must be a well thought through promotion plan for each distribution channel.