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Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)
Products and services are platforms for delivering some idea or benefit.
Social marketers are busy promoting such ideas as Friends Dont Let Friends Drive
Drunk and A Mind Is a Terrible Thing to Waste.
A challenge facing businesses today is how to identify and satisfy needs and wants of
consumers through exchange process. This particular challenges stress the need for
businesses to carefully draft marketing plans which will complement the business plan and
that prudent marketing plan worked out by focusing on expected market trends always get
good results.
-
Small businesses should start with a market plan that will target one year. This, after
some time, can be graduated to 2 4 years plan.
Marketing plans require a great amount of effort in terms of time, strategy and
credibility.
Devising marketing plans for a business involves collective efforts. It should be
planned so that it boosts the profitability of the business.
The marketing concept rests on the importance of customers to a firm and states that:
1. ALL company policies and activities should be aimed at satisfying customer needs, and
2. PROFITABLE sales volume is a better company goal than maximum sales volume.
To use the marketing concept, a business should:
i.
Determine the needs of their customers (Market Research);
ii. Analyze their competitive advantages (Market Strategy);
iii. Select specific markets to serve (Target Marketing); and
iv. Determine how to satisfy those needs (Market Mix).
Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)
Market Research
In order to manage the marketing functions successfully, good information about the market
is necessary. Frequently, a small market research program, based on a questionnaire given to
present customers and/or prospective customers, can disclose problems and areas of
dissatisfaction that can be easily remedied, or new products or services that could be offered
successfully.
Market research should also encompass identifying trends that may affect sales and
profitability levels. Population shifts, legal developments, and the local economic situation
should be monitored to enable early identification of problems and opportunities.
Competitor activity also should be monitored. Competitors may be entering or leaving the
market, for example. It is also very useful to know what your competitors' strategies are
(i.e., how they compete).
The marketing concept means that an organization aims all its efforts at satisfying its
customers at a profit. The marketing concept is a simple but very important idea.
Fig. 1.1: The Marketing Concept
Customer
satisfaction
Total company
effort
The
marketin
g
concept
Profit (or another measure
of long-term success) as an
objective
Fig. 1 above describes the essence of the marketing concept. It shows that marketing
concept is about garnering efforts by the business to satisfy customers with a view to
achieving the objective of profit making.
Marketing Strategy
Kotler describes marketing strategy as a consistent, appropriate feasible set of principles
through which particular business hopes to achieve its long-run customer profit objectives in
a particular competitive environment.
Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)
Alfred Chandler (1992) states that strategy is the determination of the basic term goals and
objectives in an enterprise and the adoption of courses of action and the allocation of
resources necessary for carrying out these goals.
The survival of a business depends on the appropriate determination of strategy which
involves the examination of the general situation pertaining to the business as a whole and
decides upon necessary changes of fundamental nature.
- Ironically, managers of business are frequently unaware of the importance of such
strategic planning and thus, on several occasions resort to guess works.
- It is therefore important for a business to define from on set its type of business and
the market it wants to satisfy.
Target Market
A business may decide to go for either the mass or niche market strategy in selecting its
target market.
Mass target market strategy is a situation where all potential customers in a product-market
are assumed to be sufficiently similar in responsiveness to a marketing program positioning
strategy.
However, in Niche target market strategy, the firm assumes that people or organizations
within a product-market vary in terms of responsiveness to any marketing program
positioning strategy.
- A niche strategy can be implemented by going after a single niche or by designing a
separate marketing program for each of two or more niches.
-
The niche strategy can afford businesses with the opportunity to greatly increase
profitability and strength over competition through more effective use of the firms
capabilities and limited resources.
Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)
In figure 1.2 above, the customers is represented by the letter C which is at the centre of
the diagram. The customer is surrounded by the controllable variables that we call the
marketing mix. A typical marketing mix includes some products, offered at a price, with
some promotion to tell potential customers about the product, and a new to reach the
customers place.
It should be noted that a marketing strategy specifies some particular target customers. This
approach is called target marketing to distinguish it from mass marketing. Target
marketing says that a marketing mix is tailored to fit some specific target customers. In
contrast, mass marketing the typical production-oriented approach vaguely aims at
everyone with the same marketing mix. Mass marketing assumes that everyone is the same
and it considers everyone to be potential customer.
Target Marketing
Owners of businesses have limited resources to spend on marketing activities.
Concentrating their marketing efforts on one or a few key market segments is the basis of
target marketing. The major ways to segment a market are:
1. Geographical segmentation -- specializing in serving the needs of customers in a
particular geographical area (for example, a neighborhood convenience store may send
advertisements only to people living within one-half mile of the store).
2. Customer segmentation -- identifying and promoting to those groups of people most
likely to buy the product. In other words, selling to the heavy users before trying to
develop new users.
Market Segmentation
One of the key elements in strategic marketing for small businesses is deciding what market
to serve.
- Market segmentation can be seen as the act of evaluating, selecting and concentrating
on those market segments that a company can serve most effectively.
-
It can also be described as the sub-dividing into distinct subsets of customers, where
any conceivable customers be selected as a target market to be reached with a distinct
marketing mix.
Markets can be segmented based on groups of consumers with similar characteristics, such
as
- Geographic (location or regional spread),
- Demographic (age, sex, occupation, educational qualification, etc.),
- Psychographic (Lifestyle traits, personality styles, attitudes, activities, and values)
and behaviorist variables.
Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)
Product
Place
Price
C
Promotion
Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)
Product as shown in figure 3 is concerned with developing the right product for the target
market. It must meet customers taste and preferences. The customer must believe that the
product is the one that is suitable to them.
Place is concerned with all the decisions involved in getting the right product to the target
markets Place. A product isnt much good to a customer if it inst available when and where
its wanted. A product reaches customers through a channel of distribution. A channel of
distribution is any series of firms (or individuals) who participate in the flow of products
from producer to final consumer. Sometimes a channel system is quite short. It may run
directly from a producer to a final user or consumer. This is especially common in business
markets and in the marketing of service. The channel is direct when a producer uses an
online website to handle orders by target customers, whether the customer is a final
consumer or an organization. So, direct channels have become much more common since
the development of the internet.
On the other hand, often the channel system is much more complex involving many
different retailers and wholesalers (see figure 1.4). When a marketing manager has several
different target markets, several different channels of distributions may be needed.
Promotion has to do with getting the customer informed that the product is available. It is
the business of communicating with consumers. It involves providing customers with
information that will assist them in making a decision to purchase a product or pay for
services. Channel used here include the print media, electronic media, signboards, visual
display devices, etc. Promotion includes personal selling, mass selling, and sales promotion.
It is the marketers job to blend these methods of communication.
Personal selling involves direct spoken communication between sellers and potential
customers. Personal selling usually happens face-to-face, but sometimes the communication
occurs over the telephone. Personal selling lets the salesperson adapt the firms marketing
mix to each potential customer. But this individual attention comes at a price; personal
selling can be very expensive. Often this personal effort has to be blended with mass selling
and sales promotion.
Mass selling is communicating with large numbers of customers at the same time. The main
form of mass selling is advertising any paid form of publicity and unpaid form of nonpersonal presentation of ideas, goods, or services is another important form of mass
selling. Mass selling may involve a wide variety of media, ranging from newspaper and
billboards to the internet.
Sales promotion refers to those promotion activities other than advertising publicity, and
personal selling that stimulate interest, trial, or purchase by final customer or others in the
channel. This can involves use of coupons, point-of-purchase materials.
Price is the element that creates revenue. It is determined by the discovery of what
customers perceived is the value of the item on sale. This implies that researching into
customers opinion about pricing is important as it indicates how they value what they are
looking for as well as what they want. A business manager/entrepreneur must also try to
Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)
estimate customer reaction to possible prices. Besides this, knowledge of current practices
as to markups, discounts, and other terms of sale is required.
Customer is not a part of the Marketing Mix
The customer is shown surrounded by the four Ps in figure 1.3. Some students assume that
the customer is part of the marketing mix but this is not so. The customer should be the
target of all marketing efforts. The customer is placed in the center of the diagram to show
this. The C stands for some specific customers the target market.
All four Ps are needed in a marketing mix. In fact, they should all be tied together. But is
any one more important than the others? Generally speaking, the answer is no all
contribute to one whole. When a marketing mix is being developed, all (final) decision
about the Ps should be made at the same time. Thats why the four Ps are arranged around
the customers ( C ) in a circle to show that they all are equally important.
The Product area is concerned with developing the right product for the target market.
This offering may involve a physical goods.
We develop a Product to satisfy target customers. We find a way to reach our target
customers Place. We use Promotion to tell the target customers (and others in the channel)
about the product that has been designed for them. And we set a Price after estimating
expected customer reaction to the total offering and the cost of getting ot to them.
Marketing Strategies For Entrepreneurs Elikwu Michael I. (B.Sc. M.Sc., PhD in View)