KUALA LUMPUR, Jan 14 — Marketing is a process by which a product or service is introduced and promoted to potential customers. The overall marketing umbrella covers advertising, public relations, promotions and sales.
The heart of your business success lies in its marketing and therefore most aspects of your business depend on successful marketing. Because one aspect of a marketing plan affects all of the others, co-ordinating your activities is critical to maximising your profits.
Without marketing, your business may offer the best products or services in your industry but none of your potential customers would know about it. Without marketing, sales may crash and companies may have to close down.
Marketing strategy is sorting out who your audience actually is, and then finding out what has meaning for them. What do they care about, and how does this relate to your offer? What message can you deliver that is both true and meet your consumer directly at the level of their needs?
Marketing strategy is the process of uncovering messages that can be heard. A marketing strategy looks at all of the areas of your selling activities and helps each one support the next, making sure the entire business is aware of what each department is doing.
Understanding how to create a sensible marketing strategy will help you make better decisions regarding specific marketing tactics.
Why is it critical?
For a business to succeed, the product or service it provides must be known to potential buyers. Unless your business is known in the community and has strong communication with your customers, you have to use sensible marketing strategies to create product or service awareness.
Without marketing, your potential customers may never be aware of your business offerings and your business may not be given the opportunity to progress and succeed.
Using marketing to promote your product, service and company provides your business with a chance of being discovered by prospective customers. A marketing strategy helps you create products and services with the best chances for making a profit.
This is because marketing strategy starts with marketplace research, taking into consideration your target customer, your competition and the current and forthcoming trends. Using this information, you determine the benefit customers desire, what they’re willing to pay and how you can stand out from the competition.
When you have a marketing strategy, different parts of your business can better work with each other, because they are all working on the same plan. As such, it is important that your advertising people communicate with your product development people to determine what message you should send about the benefits of your product or service.
Your sales people will talk with the people responsible for managing your image to determine if they can offer special discounts or rebates without damaging your brand.
Once you know what product features you’ll offer, who your target customer is and what your price points will be, you can select where you want to sell to maximise your marketing effectiveness.
For example, younger customers will be more likely to shop using a smartphone or on a website. Older customers might prefer to shop at retail outlets. If you don’t have a sales force, you can use a wholesaler or distributor if your market research shows you need to be in retail stores but you don’t have a sales force.
Getting the pricing right
Part of a marketing strategy is setting the right price for your product or service based on what you learned in your market research. If you learned that customers want a high-end product in your category, your pricing strategy might require you to sell at prices that create a high-end perceived value.
Choosing the right price for your product helps send the correct price-quality signal. Price signalling occurs when the cost of something reflects the product’s perceived quality. Whether or not your product is the best quality for the best price, your pricing strategy aims to convince the buyer that is the case.
Use premium pricing when you have a serious advantage over the competition. You can charge a high price for uniqueness. When you’re new to a market and need to gain customer loyalty, try penetration pricing.
That is set your prices extra-low to gain market share and then raise them later. When you start out with a competitive advantage, but know it won’t last, try skimming. This is the opposite of penetration pricing which allows you to make more profit in the beginning and then lower prices to remain competitive later.
Economy pricing is straight low price. This is keeping your costs low to keep the prices low and still turn a profit.
Generating higher sales
Once your product, service or company gets on the radar screen of your prospects, it increases your chances that consumers will make a purchase. As awareness becomes a reality, it is also the point where new customers start to spread the word, telling friends and family about this amazing new product they discovered.
Your sales will steadily increase as the word spreads. Without employing marketing strategies, these sales may not have ever happened; without sales, a company cannot succeed.
Marketing also fosters an environment in the marketplace for healthy competition. Marketing efforts get the word out on pricing of products and services, which not only reaches the intended consumers, but also reaches other companies competing for the consumers’ business.
Without competition, well-known companies would continue to sell while lesser-known companies or new companies would stand little chance of ever becoming successful. Marketing facilitates the healthy competition that allows small businesses and new businesses to be successful and grow in the marketplace.
Although marketing is hugely important for a business to succeed, it can also be very expensive. A company might spend as much as half of its sales on marketing programmes in its first year of sales.
A marketing budget can reach as much as 20 to 30 per cent or even more of the annual sales from the second year onwards. A marketing programme that gives your company the best chance is a healthy mix of different forms of marketing, such as website development and management, public relations, print and broadcast advertising, design and printing for all print materials, trade shows, exhibitions and other events.
Finally, it is important to address the best marketing channels to make the most out of every ringgit you spend on marketing.
* Dr Viraj Perera is the CEO of PlaTCOM Ventures Sdn Bhd, the national technology commercialisation platform of Malaysia which is a wholly-owned subsidiary of Agensi Inovasi Malaysia (AIM) formed in collaboration with SME Corp Malaysia.