Marketing 101: Going back to basics

In this really busy world, it’s so easy to just dive right into the thick of things in our businesses, without following basic marketing principles. In business, as in most things, it pays to occasionally take a step back and look at the bigger picture. Preparing a very basic marketing plan can help us focus on targeting the right customers, prioritize our marketing efforts, set the best prices and so on.STP: the starting pointSTP stands for Segmentation, Targeting and Positioning. This is the starting point of your marketing plan. Ideally, one should start this process before a product or service is ever brought to market. It can still be a worthwhile exercise for an existing product or service. As a review of this process is helpful in itself.SegmentationSegmentation is just one way of saying that you need to identify your customer. Think of every possible customer that will buy your products or services. Now, start slicing that customer grouping into smaller, more defined segments–hence, the term segmentation.It’s a good idea to start big here,e.g., split individuals from businesses. Now, go into each segment and divide each further. One could split individuals further by gender, age, socio-economic status, geographic location, interests and hobbies and so on. At this point, we should try not to pigeon-hole ourselves by prematurely selecting segments. Remember, we’re trying to find meaningful groups of potential buyers that will exhibit similar buying behavior.Our goal here is to identify opportunities. Once we feel that we have subdivided the market finely enough, then we can proceed to evaluate each of those segments. Try to quantify how large those segments are, how reachable they are and how unique they are from one another (i.e. is there considerable overlap from one to the next?).TargetingThe next step in the process is to look at the segments we’ve just created and make some decisions as to which segments of the market we are going to go after. One of the first decisions to be made here will be whether to target a “mass” market or instead whether our marketing efforts will be more focused. That is to say, we are going for a larger, less defined segment or a smaller more defined segment.The general trend over the last decade has been to go after more defined segments. The extreme here would be to go after a “niche” segment. (I’ll deal with niche marketing in another post.)A nich market is just a term for a highly defined, fairly small segment. The main reason to go this way is that there will be less competition for those segment.The segment we choose will have a profound effect on everything else we do in our marketing efforts. We need to carefully evaluate the most appropriate route for our business. When deciding between different market segments, we want to try and identify the competition for that segment, the potential value of the segment (i.e. how large is it, how expensive will it be to reach it with advertising, etc.).PositioningSo, we’ve segmented the market and chosen the segment(s) that we are going to go after. The last part of our marketing plan will help define how we are going to “position” our product or service to our selected target market(s). This is where we will invoke another handy acronym the 4P’s of marketing–Product, Price, Promotion, and Place.ProductWe need to focus our product towards our selected target(s). What do the people/firms in a segment want or need? If you are working with an existing product, you need to make sure it fits your intended target market. If it doesn’t, can it be altered so that it does? It’s critical to match the right product with the customer.PricePricing is one aspect of marketing that is an art. We must consider many factors, such as the stigma different price points carry. For instance, being too inexpensive sends a message that our product may be cheap and nasty. Here, we also need to consider our competition here. It makes little sense to target the same market with a similar product at the same price as our competitors. Many books have been written on the subject of pricing alone. The important thing to keep in mind is that we can’t lock ourselves into a cost plus profit margin way of thinking. Instead, we should consider the price independently at first in terms of our competition and the value our offering brings to the customer.PromotionThis is what most people think of when they hear the word marketing. As you can see though, it takes a fair amount of work before you get to this point. Promotion is simply how you intend to get the message to your customers about your offering. Will you use commercials, magazine advertisements, radio, the internet, mass mailings? Or, a combination of these efforts?PlaceLastly, we need to think about how you will bring your product to market. This is sometimes referred to as marketing channels. That is to say, will we sell directly to the customer or will we sell to distributors (or retailers) who will then sell to our customers? Where geographically will we sell our product? Do we sell entirely on- line or in a traditional brick-and-mortar location? Or, a combination of both?Bringing it all togetherYou probably already have some or most of your marketing plan in your head. However, following this tried-and-true process can help you formalize your marketing strategy and can help you to identify holes in your business and it sometimes can help you identify opportunities that you might not have thought to exploit. It’s always good to take a step back and consider going back to basics.

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