To succeed, entrepreneurs must attract and retain a growing base of satisfied customers. Marketing programs, though widely varied, are all aimed at convincing people to try out or keep using particular products or services. Business owners should carefully plan their marketing strategies and performance to keep their market presence strong.
What is Marketing?
Marketing is based on the importance of customers to a business and has two important principles:
- All company policies and activities should be directed toward satisfying customer needs.
- Profitable sales volume is more important than maximum sales volume.
Determine the needs of their customers through market research
Analyze their competitive advantages to develop a market strategy
Select specific markets to serve by target marketing
Determine how to satisfy customer needs by identifying a market mix
Successful marketing requires timely and relevant market information. An inexpensive research program, based on questionnaires given to current or prospective customers, can often uncover dissatisfaction or possible new products or services.
Market research will also identify trends that affect sales and profitability. Population shifts, legal developments, and the local economic situation should be monitored to quickly identify problems and opportunities. It is also important to keep up with competitors’ market strategies.
A marketing strategy identifies customer groups which a particular business can better serve than its target competitors, and tailors product offerings, prices, distribution, promotional efforts, and services toward those market segments. Ideally, the strategy should address unmet customer needs that offer adequate potential profitability. A good strategy helps a business focus on the target markets it can serve best.
Owners of small businesses usually have limited resources to spend on marketing. Concentrating their efforts on one or a few key market segments target marketing gets the most return from small investments. There are two methods used to segment a market:
- 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.
- Customer segmentation Identifying those people most likely to buy the product or service and targeting those groups.