Value proposition
This is a simple statement about what it is you offer customers, and why they should buy from you. It’s also at the core of developing your brand. You need to answer these questions:
- What is it you offer to the market that creates value for the customer?
- What are the benefits from a customer perspective?
- How will you differentiate your product or service from others in the eyes of your customer or prospective customer, even if it’s unlikely to be unique?
- What else can you offer (for instance, product features, services, price) that will enable your product or service to stand out?
Target customers
You need to set boundaries about what type of customers you are targeting by answering questions such as:
- What customers are you targeting and why?
- What are the purchasing and other behavioural habits of those target markets?
- Are your target customers decision-makers, or are there others who influence the decision-making process that you need to consider?
- What will make those target customers consider your product?
Instead of identifying a large, broad market, it’s necessary to narrow your focus to the “addressable market”, which is the market segment or segments. You need to define:
- What is your “addressable” market?
- How big is that market?
- What are the underlying trends?
Route to market
You need to make some decisions on what channels you need to use to get your product to market. A so-called “route to market” strategy will address the following questions:
- What distribution channels will you use to reach your customers?
- Will you sell directly? (And, if so, how?)
- Will you sell online? And, if so, will it be through your own eCommerce site, through third party sites or both?
- Will you sell through agents, retail outlets or other channels?
The marketing mix (7Ps)
Value to customers is created by what’s termed the ‘7Ps’. This stands for a series of seven ‘P’ words, each of which will create and deliver a market benefit to the target audience.
Product
Although originally designed to cover products, ‘product’ now embraces service. You need to determine if your product or service meets an existing or potential customer need.
You also need to identify whether your product or service is on a par, or better, than that of your competitors. Consider, too, how you can win an advantage by “packaging” your product or service better. Even if your business is well-established, you need to continually consider whether your product or service continues to meet a market need.
Price
Research shows that price is rarely the most important reason affecting buying behaviour. Consumers will pay more for products or services that they consider to be of a higher value than others, and if they believe a particular brand is superior to another.
Pricing a product or service should not only be considered in financial terms, but in terms of value to customers and how prices relate to others in the market. You should arrive at a pricing decision by evaluating:
- The economic and marketplace conditions
- Competitors and their pricing models
- The positioning of the product or service in the marketplace
- Customer reactions to particular price points, special offers and other incentives
Promotion
This term, sometimes called marketing communications (or ‘marcomms’ for short), covers everything that needs to happen to promote awareness for a product or service.
That includes the creation of a logo, signage and other marketing materials or collateral, as well as the use of various marketing channels (see below). It is essential to create a consistent brand image and to know the key messages you are delivering.
Place
That’s covered under the ‘Route to market’ heading above. Place is the channel or collection of channels you use to get your product or service to the market.
People
Customers are loyal to businesses which have excellent customer service. What’s more, they are likely to tell others about it. So ensure that your people are your business’s best ambassadors, that they understand what customers want and are fully knowledgeable about your products and services.
What’s more, ensure that you have systems in place whereby customer feedback, both positive and negative, is gathered by your staff and acted upon.
Process
This is all about delivery and the journey a customer has to take from learning about your product or service to the actual transaction. From an initial introduction, to handling of queries through taking an order and making payment, you need to look at all the processes from the perspective of your customer.
Physical evidence
Customers evaluate brands not just on the basis of the actual product or service delivered, but on the total end-to-end package: the logo, the sign over the door, the website content, how the staff are dressed, and the surroundings in your shop, factory or office.
Marketing channels
You need to focus time and whatever budget you have on the marketing channels which offer the widest possible reach. Large businesses use specialist media buyers and data analytics to make those type of decisions. But what about a business that doesn’t have access to that type of data or expertise?
Firstly, don’t spread yourself thinly. Instead, concentrate on a few channels that are likely to have the broadest reach with your target audience. Get as much data as you can to back up your decision to do a promotion on a particular channel.
Digital channels, from email to pay per click campaigns, are more easily tracked than campaigns on traditional channels. But don’t necessarily dismiss traditional media, particularly if you want to reach mass audiences.
Marketing plan
A marketing plan is an essential tool in any business. It should be consistent with your business plan and provide a structured way for you to identify:
- Marketing objectives that support your overall business goals and which are SMART: specific, measurable, attainable, realistic and timely
- Your target markets
- Who your target customers are, their habits and motivations
- The marketing channels you will use
- The steps you need to take to put your marketing plan into action
