Market Research:

What stage of development is the market? (mature, infancy, obsolete?) – different market stages allow different size businesses to start up, i.e. in a new market, lots of small businesses are created and get bought out as the industry develops, whereas in a mature market (such as banking), monopolies prevail and start ups are extremely hard – what stage is your target market at?

How to start your Market Research:

Successful marketing requires accurate market information at the relevant time.  Market research can show up trends affecting sales and profitability.

Population movements, legal developments in the country and industry, along with the local economic situation should be closely monitored to identify opportunities and threats to your business.

Your weaknesses will include competitor activity – this should be closely watched since changes here (i.e. price cuts, mass expansion in the area etc) can severely impact upon your success.

Market research reports:

such as Mintel, Keynote and others will provide a good starting point when you analyse the market you are looking to step into.

Areas to consider in order to achieve this include:

1. price – be more cost effective/competitive

2. product knowledge – sell your expertise

3. customer service (need I say more!)

4. location – who else is offering your product/service in a 40 mile radius?

5. demand – is there a demand for your product/idea?

Marketing Strategy:

A marketing strategy should show the customer groups your particular business can offer a better service than your competitors. This may be down to price, distribution or location, promotional opportunities you have identified, or the way your business differentiates and serves those market segments. Ideally, it should emphasise unmet customer needs and offering potential profitability. It should help your business focus on the target market you are most suited to.
Target Marketing:

For smaller businesses, the 2 methods used to segment a market usually are:

Geographical segmentation -  This Specialise in serving the needs of customers in a particular geographical location or neighbourhood. E.g. a local convenient store on a housing estate.

Customer segmentation – This identifies the people who are most likely to buy your goods or service and targeting those groups through the most suitable advertising means available.

Every marketing program contains four key components:

Products and Services :

This could include concentrating on a narrow and targeted product line, providing a product containing unusually high quality of service  or developing a very niche product or service.

Promotion :

These strategies include advertising and direct response from potential customers. Use all available methods to gain exposure of your company where possible. Good salesman are essential for small businesses because of the limited funds available for advertising. Good phone directory listings and Yellow pages advertising is important. Direct mail is an effective, low-cost medium available to small business – this can be used to target geographically and by demographic type – e.g. you are providing a loan referrals to banks for customers aged 18 – 30 who are C1 C2 D and E, these can be found geographically in areas around Universities etc as well as by finding which counties or cities in the country are less wealthy on average than others….

Distribution :

If you are manufacturing your product, working through established distributors or manufacturer’s agents is usually the easiest means for small manufacturers.  Small retailers should consider cost and traffic flow when choosing a location, especially since advertising and the cost of rent can be reciprocal: A low-cost, low-traffic premises usually means spending more on advertising to build a presence and customers. The nature of the product or service should also determine location decisions. If purchases are usually based largely on impulse, then high volume of people and a prominent location are critical to your success. If customers are willing to go out of their way to find a supplier of niche products, then location isn’t such a big deal. The recent availability of highly segmented email and direct mail lists, has opened many market enabled certain small businesses to operate from any location and serve national or international markets.

Price :

Selling at the price is crucial for maximising your total revenue. In general, higher prices mean lower sales volume and vice-versa; however, small businesses can often command higher prices because of their personalised service and because the niche market only has select customers who will pay whatever price to buy these goods.

Once you have chosen and implemented a marketing program, you must evaluate its performance. Comparing anticipated performance standards with actual results. Researching your industry norms should help provide a benchmark.

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