To some business owners, marketing means selling and advertising. However, in this modern day and age we are able to see that marketing is so much broader than just selling and advertising your products and services. Businesses are aware that to be successful, they need to analyse the business as a whole in relation to their competition, customers, and to global, national, societal and regional trends and conditions.
If marketing is a key to your success, how will you communicate a meaningful difference about your business idea (product or service) to the people who might be most interested in buying it?
In this session, we have five questions that should be answered for every business:
- What is unique about your business idea?
- Who is your target buyer? Who buys your product or service now, and who do you really want to sell them to?
- Who are your competitors? As a small business, can you effectively compete in your chosen market?
- What positioning message do you want to communicate to your target buyers? How can you position your product/service in ways that will convince people that what you are offering is special?
- What is your distribution strategy? How will you get your product or service in the hands of your customers? Often your distribution method will provide an additional marketing channel, or give you the opportunity to promote more products as you provide the first one.
- Quality - do it better.
- Promotion - buyers must be aware of and motivated to purchase your product.
- Price - do it cheaper or provide best value for customer’s money
- Distribution - make it easy to get/access, or to get more supply of when needed.
WHAT’S YOUR UNIQUE BUSINESS IDEA?
The first test of any business, small or large, is its uniqueness when compared to its competitors. This doesn’t require your idea to be the “first” of a kind or 100% original. You can borrow a good idea from some other company and still build a successful business around it. What will make your product or service different from your competition are the innovations and improvements on what are currently out there.
For example, every suburb needs a certain number of dairy operations, and most of them look very much alike. However, if you examine the more successful dairies in your area, you’ll notice that each one tends to emphasize and promote something special.
It may be lower prices, faster service, longer hours, or more varieties of goods to choose from. Some of these business owners undoubtedly borrowed some of their ideas from other dairies or they are benchmarking with big supermarkets. The point is, successful businesses find ways to make their products or services stand out from the rest, or at least from similar businesses from the same geographic area. If your business provides a product, sources of uniqueness can range from pricing, packaging, distribution method, or feature differences, to the mere perception of a difference that may or may not exist.
Another example, diet carbonated drinks such as coke (Diet Coke/Coke Zero) and sprite (Diet Sprite/Sprite Zero) have important product feature and benefit differences such as “Lite” beverages. These differences help determine consumer purchase decisions.
- Features - are “descriptions” of a product or service (e.g., green colour, heart-shaped, inexpensive, fast, slow, etc.)
- Benefits - are the “advantages” you receive from using the product or service (e.g., low fat, sugar-free, feel better, look beautiful, etc.)
- How is your business different? Can you express it in terms of a concise statement, known as a “unique selling proposition” or USP that will form the basis for all your advertising, promotions, sales communications, and other marketing activities?
- Is this a difference that customers appreciate, so that they will prefer over your competitors?
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WHAT IS YOUR USP?
Rosser Reeves was the author of the phrase, “unique selling proposition,” or USP, which is a unique message about itself versus the competition that each business or brand should develop and use consistently in its advertising and promotion. USP does not mean a slogan or a phrase that will appear in your advertising, although that’s one possible use for it. USP is a tool to help you focus on what your business is all about.
If you can concisely describe the uniqueness of your idea (and create some excitement in potential users), you have a very good chance for a successful business.
There are several questions to ask about your business to determine a USP:
- What is unique about your business or brand vs. direct competitors? You’ll probably find a whole list of things and you have to decide which of these you need to focus on.
- Which of these factors are most important and attractive to the buyers and end users of your business or brand?
- Which of these factors cannot easily be copied or imitated by competitors?
- Which of these factors can be easily communicated and understood by buyers or end users?
- Can you construct a memorable message (USP) of these unique, meaningful qualities about your business or brand?
- Finally, how will you communicate this message (USP) to buyers and end users?
For examples of USPs, think about different brands of products you’ve seen advertised on TV. What’s the main message underlying the ad? Different brands and types of products utilize different primary themes, attributes, or ideas associated with each brand. For example, beauty products, burgers/pizzas, and supermarket advertising tends to sell brands based on emotional, “borrowed values,” instead of strictly product features. Users are encouraged to fantasize that they may accrue the “benefits” of sex appeal, taste or a more satisfying/fun lifestyle, perhaps portrayed by the famous or beautiful models used as spokespersons for a particular brand.
The simple test of determining whether you have constructed a good USP for your business is whether it sells for you! For example, if you decided to provide free delivery service to your customers because no one else in town is doing it, you’ve constructed a USP based on service that you are communicating to the intended target buyer. If, however, you offer free delivery service because everyone else in town does so and you need to provide it simply to keep up with the competition, it’s not something that sets you apart and should not be the focus of your USP.
Do Customers Value Your Uniqueness?
One of the surest ways to fail is to market a product or service that hardly anyone wants, needs, or understands. Find out if there is a real need for your idea. Who and how many people will pay for it, and how much will they pay?
You should always research and test your idea against the realities of the marketplace. If you have worked as an employee in the industry of your choice of business you will have seen firsthand what works and what doesn’t. If you are just starting out and are not sure of what business to look into, observe the marketplace that you can capitalize on (preferably something that you know about and are interested in) and note gaps and anomalies..
Example
Before Federal Express came into being, a great number of business people wished there were an affordable way to send important packages and documents overnight. However, the tremendous start-up costs (over $500 million) and logistics problems (coordinating a national fleet of trucks and planes to start business on the first day) made it seem an impossible dream until Federal Express showed the world how to do it
Now there are over a dozen different international companies that specialize in sending packages and documents anywhere overnight! Once the United States market had matured at around $14 billion per year, aggressive international service and marketing has grown the express “overnight” package delivery service to a $30 billion business today. The “anomaly” was the great unsatisfied need for overnight package delivery that everyone thought was impossible to do.
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WHO IS YOUR TARGET BUYER?
Do you know precisely who your prospective customers are? You may know many of them by name, but do you really know what type of people or businesses they are? For example, if you sell to consumers, do you have information such as their average income ranges, education, typical occupations, geographic location, family makeup, etc.) that identifies your target buyer?
You should also know their lifestyle (e.g., hobbies, interests, recreational/entertainment activities, political beliefs, cultural practices, etc.) on your target buyer.
This type of information can help you in two very important ways. It can help you make changes to your product or service itself, to better match with what your customers are likely to want. It can also tell you how to reach your customers through advertising, promotions, etc.
Example is a company that sells bicycles may know that its typical customer is also a cycling fan. Thus, if it can build shoes good enough to be worn by professional cyclists; it will have a convincing story about quality to tell. It can also benefit by using well-known cyclist as spokesperson in its advertising, and by placing advertisements in sports magazines where its customers are likely to see them.
How can you further refine your understanding of your own customer base?
- niche marketing - identifying the heavy users of your product so you can direct your marketing efforts more precisely to those users
- segmenting the market - dividing the existing market up into sections or segments that may become new niches for your business
Niche marketing means targeting, communicating with, selling, and obtaining feedback on the heaviest users of your business’s products or services.
Most marketers know that “20 percent of buyers consume 80 percent of product volume.” If you could identify that key 20 percent and find others like them, you could sell much more product with much less effort. The “heavy users of your product can be thought of as a market “niche” that you should attempt to dominate.
Segmenting the Market
Picking the right segment of the market would mean large sales volume and profitability that are:
- measurable in quantitative monetary terms
- substantial enough to generate planned sales volume
- accessible to your company’s distribution strategies
- sensitive to planned and affordable marketing activities
Other factors which are also important to assess for your business success are:
- strength of competitors
- similarity of competitive products in the buyers’ minds
- rate of new product introductions by competitors
- ease of entry in the market for your niche
- size of your target market
For example, selling a product or service that people may need only once in a lifetime (e.g., an indestructible shoes) may not be a sustainable business, unless a large number of people need it at any given time, or everyone needs it eventually (e.g., funeral services).
To find out more Register now for one of our marketing workshops