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Marketing

Marketing your business idea and your product involves several steps. You need to know who you are selling to, who your competitors are, and how to get the word out. This information will help you get started:

Researching Your Market
Identifying the Competition
SellingYour Product or Service

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Researching Your Market

Classifying the Customer
In order to know what your customers will want to buy from your business, you must first know who your customers are.

• Demographics such as age, sex, marital status, size of family, income, and population are useful in deciding what products to sell and where to sell them.
• Psychographics, or what makes people buy things, are also valuable facts. Why will people come to your store? Is it in a convenient location? Are your prices lower than your competitors'? Observations and surveys can yield answers to these and other questions. Customers have reasons to buy the things they buy, and knowing those reasons can be profitable to your business.

Getting to Know the Industry
Researching facts about other businesses in the industry may help you run your own. Observe the price of similar goods and services. Knowing what competitors charge will help you formulate a pricing strategy. Do you want your product or service to appear pricey and luxurious, or inexpensive and lower quality? These are not the only two possible images, of course. Also pay attention to any changes that may be taking place in the industry and determine how they may help or hurt you in the future.

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Identifying the Competition

Direct and Indirect Competition
The most obvious competition to your business is direct competition. These competitors sell similar products or services in your area. They can easily be identified by looking in the yellow pages in the phone book or in newspaper advertisements. An example would be McDonald's and Burger King, which are both fast-food restaurants that sell similar food items.

Indirect competitors produce products and services that may be substitutes for what you're selling. These businesses are often ignored because they are not recognized as competition. An example is McDonald's and Pizza Hut: not the same product, but you probably wouldn't have both hamburgers and pizza for the same meal.

Competitive Strategies
Identifying strategies used by competitors will help you position yourself in the market. Ask yourself these questions:

• What key features does the competition offer to customers?
  
• How does the competition get customers to buy their product or service?
  
• Does the competition offer any special deals to consumers?
  
• Is there anything uniquely different about my product or service that could be advantageous?

Develop and promote any strengths your product or service may have over the competition. If your competitors appeal to one group of consumers, perhaps you would like to direct your marketing efforts at another. Speaking with a marketing consultant may help you find a market niche that's right for your product or service.

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Selling Your Product or Service

Product Presentation
How a product looks can have a great deal of impact on the consumer's decision whether or not to buy it. If you're a manufacturer, designing a product's packaging is very important. It should be eye-catching and include pertinent information such as benefits of the product, instructions for use, and the company name. If you're in the retail business, you need to consider where you place each product. Sale items and frequently purchased goods should be placed at the end of aisles or in special displays so that the customer can find them quickly and easily. Also, items such as candy that are often purchased on impulse should be placed in checkouts or other regularly traveled areas of the store.

Advertising and Promotion
Deciding where to advertise your product or service and what medium to use can affect who sees the ad. If you're the only business of your type in the area, you may want to advertise outside of your city to draw customers from surrounding towns. If you have many competitors in your area, you probably can't justify advertising to consumers several miles away who can get the same products locally.

Knowing who your customers are gives you a better idea of how to reach them. If your product appeals to the general public, newspaper ads may be right for you. If you're targeting your advertising at young people, posters around college campuses or ads on pop radio stations might be a good idea. Decide what market you're trying to sell to and find out where you can contact those people. It may be beneficial to track your sales before and after each different ad is run. Determining what works and what doesn't can prevent advertising mistakes in the future.

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