Seven Critical Elements of Marketing

Seven Elements explained

1. The Benefit to Consumers

The only products or services that succeed are those that offer a benefit to consumers that is greater than their cost. In our rapidly evolving consumer-based society, understanding the answer to this can unlock the potential of your marketing campaign. As soon as you can distinguish between wants and basic needs, as soon as you understand how to talk directly to the consumer's psyche, you can begin to establish your role in their life. Mastering the list of what people want and communicating the benefits of your product are crucial steps in understanding marketing.

2. Your Positioning in the Marketplace.

It is much easier to succeed when you create a product or service that people really want. Successful marketers identify genuine need on the part of customers to use their service. They offer a clear and distinct benefit, and position themselves to reach consumers with a personal message about how their lives would be better once they use this product or service. The hard part is figuring out what sort of product or service people are going to line up for. When Microsoft creates a new word processor, they go through more than 10,000 hours of consumer testing, surveys, and feedback. Not saying you should put in this amount of work if you are starting a small business, but you should at least ask your best customers for ideas for new products and services.

3. Your Target Market.

Once you've established the benefits of your product, you've implicitly identified a target market. There are few products that appeal to everyone. Identify exactly who wants your product the most. Think about people's age, income, shoe size, race, musical taste, height or what ever differentiates your market. Once you've identified your target market, it's time to test your thinking. You'll need to find a dozen or so members of your target market and assemble them for a focus group. This is a method of getting feedback on your ideas. Ask them questions about what they use now to achieve the benefits you're offering, what they like about the product or service and what they don't like, and find out how much they pay for the benefit you're offering. You can do this in person or through an online computer service or a mail-in survey to get feed back.. This will help you find the benefits you're offering to your target market. Turn this knowledge into a one- or two-sentence marketing statement that makes it clear what you have to offer and to whom you are offering it. This precision is critical in reaching your market.

4. Your Advertising Strategy and Positioning.

The concept behind positioning is simple: Find a hole and fill it. People pick one or two attributes to associate with a product or service, then file that information away. When they need those attributes, the product or service comes to mind. Take a minute to understand how the competition affects your ability to offer your benefit to your target market. With so many products on the market (and thousands more being introduced every year) and the countless advertisements that promote them, consumers have become virtually immune to traditional marketing tactics. They just don't have enough room in their brains to store every piece of information about every product. Instead, they either categorize a product or ignore it. Finding your niche is essential. In virtually every market, there is an opportunity to reposition the competition and create your own niche. List the brands that are competing for your consumer. Next to each brand, outline that product's position---who it is tailored for, and how it is different from its competitors. Describe your proposed niche in one short phrase or sentence.

Finding the right position for your company only works if you back it up. You have to follow up with conviction and sell your position. Every aspect of your marketing plan should reflect the special niche you fill. Keep in mind that positioning without substance never works in the long run. Stress the basics and the simplicity of your product or service.

5. Computing Your Budget

Many entrepreneurs wonder why they need a marketing budget. They figure they'll run a few ads and as business comes in, run some more. This myopic thinking almost always leads to disappointment. Every business has a natural rhythm, levels of sales and marketing that are self-sustaining. If you don't do enough marketing, you whither. Do too much and you waste marketing dollars or generate more business than you can handle.

The first step in creating a marketing budget is determining what percentage of sales you'll be able to devote to marketing. A good rule of thumb is 10%, but some businesses require more. If your business is regional, as a successful non-competitor in a different region to share data with you, or you can call the trade association for your industry to get the inside scoop.

Whatever is the standard in your field, plan to increase that number by a few percentage points. Leaders often spend more on marketing, and it helps them grow. Under no circumstances should you create a marketing plan that is built around spending a smaller percentage of sales than your competition.

Determine the value of each customer over his or her lifetime to establish how much you might be willing to spend to acquire a new customer. This also helps you realize how much it costs to lose an establish customer. Do this by estimating how long the customer will patronize your business, how much the customer will buy in the average year, and what's your gross margin.

6. The Tools and Techniques You'll Use to Reach Your Audience

Advertising Agencies: If you're doing more than $50,000 a year in advertising, you should seriously consider hiring a full-service agency. In general, ad agencies are paid by the media, not by you. Many agencies are willing to take on small clients if the ads they create will help improve their visibility and win awards. Good Sources for ad agencies would be Adweeks' Agency Directory and the Standard Directory of Advertising Agencies.

Newspaper Advertisements: The number one use of small business marketing money is newspaper display advertising. Newspapers combine local access with near universal impact. They also offer a high degree of flexibility in that you can decide to run an ad or make changes in it up to a couple of days before the ad runs. It's also a medium that is easy to test and gives the consistency and repetition that make an ad campaign successful. Determine which newspapers overlap your market the best and then test an ad in as many of them as you can. Use coupons in your ads. Have each coupon make a different offer, and request in the ad that the customer bring the coupon when coming to your place of business, or mention the coupon when calling you or ordering online. By measuring the responses, you'll soon see which newspapers---and which coupons---work the best for you. Repetition is the key for successful advertising. For every three advertisements viewed, the average consumer will ignore two. It takes an average consumer nine exposures to an ad before the ad is readily remembered. Thus, a specific ad should be run at least 27 times in media directed toward a specific consumer niche before the ad is changed. Run ads on days your store is open. Make sure you have a strong headline.

Magazines: Magazine advertising has been the linchpin for many successful small business. The single most important reason people patronize one business over another is confidence. Magazine advertisements breed confidence by instilling familiarity and giving credibility. A properly produced magazine ad gives a small business more credibility than any other mass marketing medium. Take advantage of the split runs offered by many magazines.

Remnant Space: If a radio show has twenty minutes of advertising available but only sells fifteen, five minutes are gone; the industry calls it remnant space, and sometimes it sells for as little as five cents on the dollar. If you buy a slate of ads with a radio station, insist on getting remnant space thrown in for free. For example, you could by ten ads on Saturday at regular price, and ask for fifteen more ads to run, at the radio station's convenience, during the next three days. The ad might run at 3 in the morning or at noon, you never know. Local TV stations, obscure cable broadcasters, and late night shows on network affiliates all have leftover space. It's not unusual to get a minute of air time for as little as $100. You'll get a better deal if your network affiliates frequently have remnant space as part of the bargain. Local network affiliates frequently have remnant space as well.

Radio: Radio advertising is one of the most powerful tools available. Radio stations are receptive to remnant and barter deals, and they usually need what you have to offer. With radio, you can create a sense of urgency that just doesn't happen in print.

Television: Television advertisement has an impact more than any other medium, TV can generate an emotional reaction in viewers and with the average household watching seven hours of television everyday, you are guaranteed an audience. Television can serve to build company traffic, establish a brand name, or position yourself with consumers.

Outdoor Ads: Billboards and subway and bus advertising get great exposure, and they build image and credibility. People sitting in traffic or waiting for a bus have nothing to do. Their brains are hungry for information. The first billboard in sight burns itself in the prospect's mind. Billboards convey a sense of stability and give your message a larger-than-life appearance. Billboards don't move, so your message is guaranteed to hit the same commuter every day at about the same time. Billboards deliver repetition. The price of billboards varies widely depending upon their location and whether you want to advertise on a superhighway or a local back road. Bus shelter, subway ads, and airport signs can be inexpensive and give you more than a split-second to convey your message. Someone waiting for a bus has at least ten full minutes to read your ad.

Co-Op Advertisements: If you are a retailer you may advertise all of the brands your business offers and have each manufacturer pay for some of the advertising. Most manufacturers have co-op programs and most are eager to provide retailers with advertising funds.

Other forms of advertisements may include: Business Cards, Brochures, Video Brochures, Banners and Signs, Posters, Newsletters, Take-One Boxes, Circulars, Door hangers, Gift Certificates, Order Forms, Stationery, Customer Mailing Lists, Direct Mail Postcards, Inserts, Direct Response Mail Order, Direct Mail, Catalogs, and Database Marketing.

7. A Month-by-Month Implementation Timetable.

Once you've ranked the tools that appeal to you, determine your media plan. Chart out the various tools you will use for advertising and date them by the months you will run them.

Remember:

Before spending a dollar on media, ask yourself these questions to be sure you're ready to start:

What benefit do you offer the consumer? Exactly who is your consumer? What is your position relative to your competitors? What barriers exist to keep others from stealing your market shares? How will you personally communicate with your customers? How will you measure the response of your promotions? Do you have sufficient inventory and manpower to deal with increased demand? Have you worked through the non-media tools to ensure that you've established the framework for a successful media campaign? What is your month-by-month plan? Have you planned for enough frequency with your target market? Do you have enough money budgeted to support the plan even if initial sales are weak? Does your media meet your tactical and strategic goals?

Three Reasons Why Marketers Fail:

1. Lack of Commitment: If you don't believe in your product or service, or if you're not consistent and regular in the way you promote it, the odds of succeeding go way down. The primary function of the marketing plan is to ensure that you have the resources and the where withal to do what it takes to make your product work.
2. Lack of a Clear Benefit: It seems so obvious, but few marketers understand that you must SELL SOMETHING PEOPLE WANT. Without getting close to your customer, doing the research, and looking hard at what you have to offer, you're unlikely to stumble onto a hit. Too often, companies look at their skills or their factory and invent a new product or service that will be easy for them to make. That's the last reason to offer a product. Customers don't care about your skills or inventory. They want to know what's in it for them.
3. Poor Positioning: Sometimes there is no position available in a crowded or depressed market. Markets where there are no positions available are few and far between. More often, marketers make the mistake of going up against a market leader on his own turf. As the marketing plan takes you through the positioning segment, pay careful attention. The best product and the best execution won't help if a market leader is selling the same benefit in the same way for half the price.