Know Your Market

A sound marketing plan is key to the success of your business. It should include your market your market research, your location, the customer group you have targeted, your competition, positioning, the product or service you are selling, pricing, advertising and promotion.

"You're in business to serve a customer need," says Derek Hansen, founder of American Capital Access. "If you're not sensitive to customers, don't know who your customers are, how to reach them and, most of all, what will convince them to buy your product or service, get help."

Before developing your plan, you must do your homework. Effective marketing, planning and promotion begins with factual information about the marketplace. Visit your local library, talk to customers, study the advertising of other businesses in your community (including that of your competition) and consult with any related industry associations.

Once you have all the necessary information, it is time to put your plan down on paper. It should accomplish the following:

1. Define your business - Your product or service; - Your geographic marketing area--neighborhood, regional or national; - Your competition; - How you differ from the competition--what makes you special; - Your price; - The competition's promotion methods; - Your promotion methods; - Your distribution methods or business location.

2. Define your customers - Your current customer base: age, sex, income, neighborhood; - How your customers learn about your product or service--advertising, direct mail, word of mouth, Yellow Pages; - Patterns or habits your customers and potential customers share--where they shop, what they read, watch, listen to; - Qualities your customers value most about your product or service-- selection, convenience, service, reliability, availability, affordability; - Qualities your customers like least about your product or service--can they be adjusted to serve your customers better? - Prospective customers like least about your product or service but whom you aren't currently reaching.

3. Define your plan and budget - Previous marketing methods you have used to communicate to your customers; - Methods that have been most effective; - Cost compared to sales; - Cost per customer; - Possible future marketing methods to attract new customers; - Percentage of profits you can allocate to your marketing campaign; - Marketing tools you can implement within your budget--newspaper, magazine or Yellow Pages advertising; radio or television advertising; direct mail; tele-marketing; public relations activities such as community involvement, sponsorship or press releases; - Methods of testing your marketing ideas; - Methods for measuring results of your marketing campaign; - The marketing tool you can implement immediately.

The final component in your marketing plan should be your overall promotional objectives: to communicate your message, create an awareness of your product or service, motivate customers to buy and increase sales. Objectives make it easier to design an effective campaign and help you keep that campaign on the right track. Plus, once you have defined your objectives, it is easier to choose the method that will be most effective.

The essential idea is targeted marketing--making sure your message reaches the people you want to persuade. Today's marketplace is too fragmented and diffused to reach everyone without the expenditure of vast sums of money. This makes the formulation of a specific customer profile all the more important. "Before, we always tried to get everybody and their brother to buy from us. Need-less to say, that approach didn't work. Then we started a marketing plan that targeted a specific geographic area." says one long-time business owner, "and it brought in all the business we hope for."