SMART AND EFFICIENT MARKETING

A Seminar for Small Business Arlington Chamber of Commerce Presented by Eaton & Co. March 24, 2004

What’s Marketing?

 Marketing is an activity designed to reach

TARGET CUSTOMERS

and effectively communicate

COMPETITIVELY SUPERIOR FEATURES

of your

PRODUCT

or

SERVICE

that directly respond to

CUSTOMERS’ NEEDS

.

This definition immediately raises questions:

1.

2.

3.

4.

5.

6.

Who is a target customer?

What are his needs?

What features of my product/service are competitively superior?

How do I reach my target customers?

What’s the best communication vehicle that increases an awareness of my product and makes it look “marketable”?

How do I measure my marketing campaign?

This effectively breaks the whole marketing exercise into three key stages:

I.

Learn about your product, your customer, and your market.

II.

Develop a marketing campaign.

III.

Execute and evaluate this campaign on its financial results.

Stage I – Learn about your product, your customer, and your market.

Competitors Product

Customer

Your Company Overall Market Conditions

Product / Service

      Who uses this product?

What are key features of the product desired by customers?

How often should this product be updated?

Can the product become obsolete?

What is the frequency of usage for this product?

What is the product cost and can it be eventually cheaper?

Target Customer

       Who is that, a company or an individual?

Who is a decision-maker?

Who is an actual user?

Do users differ by any characteristics: • • • • • • • Demographics Size of the Company Geography Income Frequency of Usage (heavy or light users) Size of Transaction Related Purchases What are true needs for the product?

How much is a customer satisfied with current offerings?

What are yet unsatisfied needs in this area?

Suppliers of the product (you and competitors).

       Who is supplying the product?

What’s their size, market share?

Does it differ by geographic market or a sub-group of customers?

How do these companies differ?

What’s the customer’s opinion of major suppliers?

What’s a customer’s opinion of your company vis-à-vis other competitors?

What are key requirements for success in the marketplace: • • • • • • Product Features Price Service Dependability/Reliability Brand Image ?

   Where do you feel you are superior to competitors: • • • • • Cost Manufacturing Unique Source of Supply Outstanding Personnel ?

What are major customer strategies in the marketplace?

What are competitive threats to you?

Overall Market Trends

 Is the market growing or flat?

 Are there changes in market conditions (e.g., shortages, weather-related, new market channels, etc.)?

 Any new groups of customers entering the market?

 Tactics accepted in the marketplace (e.g., price discounts, cross-promotions, etc.).

Your Company

Once this assessment is done you have to look at yourself and decide what’s your marketing strategy: - Growth Acquisitions New Product/Service Partnership New Market Expansion - Increased Customer Base Loyalty Programs New Customer Incentives Different Channels - Increased Profits Cost-Cutting Programs Emphasis on High-Margin Products Supply Chain Evaluation - Defense Against Competition Pricing Promotion New Products

AND THEN

Stage II - Development of the marketing campaign.

 Key elements of the marketing campaign.

– Advertising – – Promotions Public Relations

Example:

A Saab car dealer learns that his cars are best sold to affluent young to middle age white collar customers. However, BMW and Mercedes basically target the same customer base. The strategy for the Saab dealer is to retain its customers and increase the customer base by aggressively going after the competition.

 Here is what he can do in his marketing campaign: – ADVERTISING – Saab is a durable car best used on the rugged terrain. Advertising may position it as an ultimate sports car that still can accommodate the whole family. This may appeal to the middle-aged customers who still want a “sports” adventure without giving up space and the family convenience.

– In addition to the car features, a dealer will advertise its own services emphasizing quick delivery of new custom-made vehicles (his market research indicated that this is a “bone of contention” with BMW and Mercedes)

Example:

– PROMOTION – This dealer faces two challenges: to bring new customers and to retain the old ones. Therefore, he has to create two different programs:  Program A – Loyalty Program This program would reward loyalty of current customers by giving them special gifts every time they use a dealership for service or purchase. These gifts may be done on an accumulated basis such as free miles, products from the catalogue or free services.

 Program B – New customers This program would offer an incentive to try Saab/switch from a competitive model. Such an incentive should combine a first-time user discount with another series of lucrative gifts, e.g., a discount for a vacation trip into a “rugged terrain” to try the Saab performance (ski trip into the mountains, for example).

Example:

– PUBLIC RELATIONS – This would be designed to increase a goodwill among potential customers and enhance the image of a dealer as a caring member of the community. Sponsorship of the Little League game would do that plus would enhance the image of the Saab as a sports-related car.

– DIFFERENT CHANNEL – in order to increase its presence the Saab dealer partnered with a major Health and Fitness club in the area and set-up its representative right there on the club premises. Every hour, the closed circuit TV would run the Saab advertising for the clients and a representative would offer a trial ride in a Saab four times a day.

Stage III - A MOMENT OF TRUTH: Execution and evaluation of campaign effectiveness on a financial basis.

 Once the campaign is in progress a timely evaluation is key: – – – Check for inconsistencies in execution or an impact on the consumer.

Monitor competitive reactions to the campaign.

Analyze cost/benefit ratio.

 Financial results are evaluated along the following lines: 1.

How much new volume was generated?

2.

3.

What was the cost of the marketing activities?

What’s a return on investment by each promotional program?

Case Study 1

A CPA who served middle-class corporate personnel has noticed that his sales are going down. He has analyzed the market and learned the following: – – His customers are retiring and moving South or have been hurt by the economy and lost their jobs.

The new people moving into the area represent a younger ethnic-oriented crowd, blue-collar, who prefer to be served by members of their own community.

The CPA has two options: 1.

2.

Change/expand his services to attract new customers.

Look into different markets.

   What marketing conditions should he analyze?

What marketing strategy and plan should he develop?

What should be his goals, both marketing and financial?

Case Study 2

A small restaurant owner has a place at the Galleria that attracts a shopping crowd. However, since the economy hurt mall attendance, he decided to open another location in Arlington.

Unfortunately, he only found a place in the business area that closes down at 5pm and his new customers are coming for lunch only.

How can he bring customers for dinner and compete with more centrally –located larger restaurants with already established local reputations?

Case Study 3

A grocer is hurt by the Wal-Mart expansion into the area. He can not fight the Wal-Mart prices, especially in the dry goods area.

How can he defend himself?

He has two options: To identify products/services where he can be superior to Wal-Mart.

To develop special loyalty programs for customers that would offset higher prices but still would be cost effective for him.

What would be his marketing campaign?