Marketing Mix: 1. The product and service to offer your customers. 2. How you will make your products available to your customers. 3. How you will communicate the benefits of your products and persuade customers to buy them. 4. The price that you will charge your customers. This is called the marketing mix. It consists of everything you can do to influence the demand for your products or service. Every entrepreneur must develop his own marketing strategy on the basis of these four elements. 1. PRODUCT/ SERVICE 2. PROMOTION 3. PLACE 4. PRICE The entrepreneur has control over the marketing mix and can vary it to suit the needs of his customers and the resources of his business. Customers are continually matching their need with the products offered by your competitors. You know your target market and their needs and from analysing your competitors you can identify what they offer the consumer through the marketing mix. This determines what your marketing mix and your competitive advantage will be. All of the marketing mix elements must reinforce the image of the product or service that the business portrays to the potential customer. Product / Service A trade mark is used to distinguish a product or service from similar competitive products. Trade marks facilitate the identification of products at the point of sale and ensure the customer of a uniform quality product. Product sale also relies heavily on a good trade name, consumers usually associate a quality product with a quality name. Selecting a good trade name needs to be based on a few simple guidelines. It may tell something about the product (Rent-a-Car), try to keep it as simple as possible spelt and remembered easily (Ford), it may indicate high quality (Exclusive Cars), it could indicate a personal name (Johnnie Walker), it may also be a foreign name ( Nestle, Lux). Trade marks facilitate product diversification. A new product can be added with ease to a known product line as compared with one which has no trade mark. Packaging your product is an important aspect for most products. A well designed, attractive package can help catch the customers eye and boost sales. Product packaging is important to the consumer, especially tamper proof packaging, protection, storing and physical handling of products. Aspects such as safety, convenient sizes, hygienic storing and convenience of re-use are important. Effective packaging is a highly rated tool to attract consumers and to help retailers to realise maximum turnover. Promotion Advertising on a regular basis is a critical element in sustaining a healthy, growing, vibrant small business. Because the lifeblood of every business is sales, the typical small business cannot prosper without a unified advertising programme. advertising can be an effective means of increasing sales by informing customers of the business and its goods or services, by improving the image of the firm and its products or by persuading customers to purchase the firms goods and services. Adverts encourage customers to visit the companys shop, in turn boost sales of merchandise. The entrepreneur can create consumer interest by advertising how their goods may benefit them. Once a small business establishes a solid reputation in the business community, the entrepreneur must use advertising to maintain an adequate volume of sales. Manufacturing businesses use adverts in trade journals and newspapers or direct mail campaigns to sell the company name and product line. Creating a good image will help sales representatives to close the deals. Engaging in a certain amount of institutional advertising designed to inform the public about the company, also called attitude advertising is also sometimes useful. Attitude advertising creates public awareness of the business name as well as its services or products, creating goodwill and customer confidence. There is no single formula for determining the ideal advertising medium to use, but there are several characteristics that make some media more suitable than others. But first consider the following questions: 1. How large is your business trading area? 2. Who are your customers and what are their characteristics? 3. What are your budget limitations? 4. Which media do your competitors use? 5. Is continuity of your advertising message important? 6. How much does the advertising media cost? Whatever your advertising media is depending on the above questions an effective advertising budget has to be established. The most common method is the simple percentage-of-sales-approach, which relates advertising expenditure to actual sales results. Most small businesses find it useful to plan their advertising expenditure on a monthly basis, and a simple calendar will help. Usually 6% of potential sales is a good start to work out your monthly budget. (FORMULA: Potential sales x 6% of sales = budget. e.g. $8000 x 6% = $480). Place You have told your customers how your products or services can satisfy their needs and what benefits they can offer them. Now, you have to make your products available to them. If you do not plan to start a business that you can operate from home then locality can be critical. Depending on the nature of your business and the products or services you sell will determine your locality. For example, plumbers are contracted by phone and work is performed on site. a hairdresser, travel agency or barber shop needs to locate themselves in high traffic areas to sell their products or services. Pricing One must consider what the customer is willing to pay and what the customer is likely to expect for that price. The price must be set high enough to cover costs and low enough to attract consumers and generate adequate sales profit. Pricing is a complex matter, visiting the Turtle Herb Estate website you will find articles specifically about pricing and various ways to price your products or services under advertising and marketing. |
