West Virginia Department of Commerce Identifying Your Market

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Identifying Your Market



Going Into Business in West Virginia
GOING INTO BUSINESS IN WEST VIRGNIA    

IDENTIFYING YOUR MARKET

NO MATTER HOW GOOD your product or service is, what the customer thinks is what really counts. Even if your product or service is well liked, you need to be sure that your customers will buy from you often enough, and in large enough quantities, to consistently generate the revenues needed to support and maintain your business. That is why a marketing plan is vital to your success.

Who is Your Customer?
4 Step Marketing
What is your "USP?" Unique Selling Position
Marketing Worksheet

Planning, for the most part, isn’t fun. But if you don’t plan your marketing, you’ll spend lots more than you have to. And likely not have the results you want for your efforts. Planning is the first step to marketing smart!

There are only three ways to increase sales:
  • Get more customers.
  • Get current customers to buy more often.
  • Get current customers to spend more on each visit.
Customers — this is the key. It’s cheaper to keep a customer than add a new one; so what can you do to maintain your customer base?

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WHO IS YOUR CUSTOMER?

Most businesses sell to consumers via the Internet, or person to person. That’s the consumer market: business to consumer. But there are two other types of markets: The industrial market (business to business) and the reseller market. These additional markets maybe something to think about to expand your sales, but they take different marketing strategies.

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4 STEP MARKETING

Why would a customer want to buy your product or service? Do you fill a need? Are you convenient? Do you help solve a problem? Let’s go through this four-step plan to help you narrow your marketing.

1.  Identify why your customer wants to buy your product or service.
Can you identify the opportunity or problem your product or service will solve for a customer? If not, you need to try and figure it out.

This is Problem Number 1 when starting to develop a marketing strategy for your business. Most people will point to a feature, and expect customers to “get it.” However, what really sells, either a service or a product, is the benefit of the product, not its features.

According to Allen Weiss, founder and publisher of MarketingProfs.com, the first thing to note is that product features reside in the product, while benefits reside in the customer. For example:
  • A car can have 4-wheel drive (a concrete attribute) and provide a benefit to a customer of being able to go various places.
  • A computer can have a microprocessor with a fast clock speed (a concrete attribute) and provide the benefit of being able to get your job done faster.

Benefits are always abstract, and they are often the result of a cluster of product attributes, some of which may be abstract attributes. For example, think of safety (say in a car). There is a cluster of concrete product attributes (e.g., air bags, brakes, and body construction) that give rise to the more abstract concept of the benefit of safety. But note that “safety” can also be applied to the car (so it’s an abstract product attribute). Many times, abstract product attributes are closely related to benefits. When they are, you do not get much benefit out of making a distinction between attributes and benefits.

Given this discussion, you can see that it is often easier to think about what a customer buys by thinking along the continuum of concrete versus abstract ideas, regardless of whether we label it an attribute or a benefit.

2.
Segment your overall market. Research your market and break it out into market segmentation: Geographic [location]; Demographic [age, education, et al]; Psychographic [gender and lifestyle]; and Behavioristic. To help with your market research you might use SBDCNet at sbdcnet.org.

Demographics: Age, education, income, minority status.

Psychographic: According to Nilofer Merchant, the CEO of Rubicon Consulting in Silicone Valley, after doing good research and finding some natural “clumps” of interests, usages, priorities, or purchase drivers, we typically end up with three to five segments for any particular product, service, or solution area. For example, most technology firms catering to consumers have four or so groups that look like this:
  • Technology enthusiasts. Typically male, 30–45 years old.
  • Families with children. Price-sensitive, focused on protection and safety.
  • Older with money. They may tend to be price insensitive but need guidance on what to purchase and how to use/service it.
  • Teens and entertainment addicts. Low threshold for boredom, on the go, want the latest.
Generally you can identify difference in purchasing:
  • Male/female.
  • Healthy lifestyle.
  • Conservative with money.

Behavioristic: brand loyalty; shopping for bargains and using coupons. Did you know that:
  • Women make 83 percent of all buying decisions.
  • American women write 80 percent of all checks and pay 61 percent of all bills.
What is the impact of this on your advertising? But we’re not all alike. Our broader world is changing so that users can be a market of one: not a part of some bigger market segment, but a singular person, unique and appealing, to market to in and of himself or herself. Rather than knowing of an individual’s interest in photography, you might also know that they care about many things at once.

For example:
  • Cleaning products that are non-chemical.
  • Furless dogs to avoid allergic reactions.
  • Fonts that are sans serif.
  • High-quality paper and ink.
  • Fountain pens that don’t dry out while you’re waiting for inspiration.
  • Shoes in patent, peep toe styles.
  • E-mail access 24/7 from anywhere.

This list may seem unrelated to a marketer of any one product, but what is incredibly important and relevant is this is how people really are. It’s vitally important to marketing effectiveness. And this is why it is critical that you know your customers!

3.
Research your market. What effect did 9/11 have on businesses? The weather, the economy, holiday sales; some of these things you can not foresee. But if some weather event happens, do you need to do some quick advertising to say you are open? Consider external factors, like weather, road construction, and other things you have no control over. How can you use advertising to help reach customers despite external factors?

When researching, again use SBDCNet, Census.gov, maybe surveys, interviews, certainly observe your customers. And ask them! Only 9 percent of the population refuses to give personal data when asked.

You can conduct much of your market research using online services and information. Start with the major consumer online services, which offer access to business databases. Here are a few to get you started:
  • KnowThis.com’s marketing virtual library includes a tab on the site called “Web links” that contains links to a wide variety of market research web resources.
  • BizMiners.com lets you choose national market research reports for 16,000 industries in 300 U.S. markets, local research reports for 16,000 industries in 250 metro markets, or financial profiles for 10,000 U.S. industries. The reports are available online for a nominal cost.
  • MarketResearch.com has more than 250,000 research reports from hundreds of sources consolidated into one accessible collection that’s updated daily. No subscription fee is required, and you pay only for the parts of the report you need with its “Buy by the Section” feature. After paying, the information is delivered online to your personal library on the site.

Join any state or national/international trade associations and use any data they can give you on trends. If you use distributors or wholesalers, ask them about trends for your area. Certainly the Internet is a source of news. Don’t forget local, state or national business publications.

4. 
Identify your competition. Competition is not bad; it just means there is a need for your product or service. Look at Wendy’s: they will traditionally build a new location only if there’s a McDonald’s close. Why? Kids want McDonald’s! But parents can pick up a Happy Meal, and then take themselves over to Wendy’s. So not only is competition a sign that there is demand for your product or service, it also means that you may have the ability to benefit from your competitors’ weaknesses.
  • How are you different from your competitor? e.g. hours, services, etc.
  • What do you do that is unique?
  • What value do you offer? Being the cheapest will lose you more customers than you gain. Think of value in terms of additional value.
  • What is the image of your company?
  • What is the public perception of the quality and honesty of your business?

Wal-Mart is a competitor, but there is one thing to learn from them: P.O.C.K.E.T.S.
  • Price: Quality and needs of customers.
  • Operations: Continually improve.
  • Culture: Your philosophy.
  • Key product: Diversify, ask customers.
  • Expenses: Profit sharing for employees.
  • Talent: Hire the best.
  • Service: is #1.

These ideas are from an Edward Jones-sponsored Webinar, “Service is #1 at Wal-Mart.” You might disagree, but these are their corporate ideals that are not necessarily translating down into store operations. But that doesn’t mean they’re bad ideals.

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WHAT IS YOUR "USP?"
UNIQUE SELLING POSITION

Most businesses know their uniqueness. They’ll even tell you their point of difference in a conversation. Yet, you won’t find it on the front page of their Web site. It’s swept under the carpet in their brochures and newsletters. When they stand up to speak, they forget to make it an important part of the spiel.

Get your uniqueness where it can be seen on a consistent basis. Not hidden under a bushel. In one concise statement, communicate your business’ most compelling offer and benefit so the customer can answer “What’s in it for me?”

Invent your USP. The owners of the following businesses all invented their own uniqueness.
  • Subway — Seven subs with “6 grams of fat or less.” When did a restaurant start telling you how much fat was in their food?
  • Federal Express — When it absolutely, positively has to be there overnight. Overnight delivery was a new concept when Fed Ex started.
  • Domino’s Pizza — 30 minutes, or it’s free! Pizza in 30 minutes? Before Domino’s, it didn’t happen.

Consumers see or hear more than 2,200 messages each day. Make yours stand out in the crowd. Use the marketing worksheet at the end of this chapter to begin looking at what tools are available, what you have done, what you are doing and what you can do. How many of these tools are inexpensive and effective?

Use the marketing information you gather in your plan to develop an advertising budget, which is discussed in the following chapter. Contact your local SBDC for help in putting your marketing plan together. Find you local center on the SBDC here.

The marketing information contained here is based on comprehensive research and best practices identified from national and international marketing experts and sources.

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MARKETING WORKSHEET


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Going Into Business in West Virginia
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