Chapter 1 A Helicopter View of the Marketing Process In This Chapter Understanding the meaning and role of marketing Differentiating small business marketing from big business marketing Jumpstarting your marketing program Y ou 9re not alone if you opened this book in part to find the answer to the question: cWhat is marketing anyway? d Everyone seems to know that marketing is an essential ingredient for business success, but when it comes time to say exactly what it is, certainty takes a nose dive. If you pick up the phone and call any number of marketing professors, mar- keting vice presidents, or marketing experts and ask them to define market- ing, odds are you won 9t get the same answer twice. In fact, if you look the word up in different dictionaries, you 9ll find many different definitions.
To settle the matter right up front, here is a plain-language description of what marketing 4 and what this book 4 is all about. Marketing is the process through which you create 4 and keep 4 customers. Marketing is the matchmaker between what your business is selling and what your customers are buying.
Marketing covers all the steps that are involved to tailor ... more. less.
your products, messages, distribution, customer service, and all other business actions to meet the desires of your most important business asset: your customer. Marketing is a win-win partnership between your business and its market. Marketing isn 9t about talking to your customers; it 9s about talking with them.<br><br> Marketing relies on two-way communication between your business and your buyer. 05_578391 ch01.qxd 12/28/04 8:54 PM Page 7 COPYRIGHTED MATERIAL Seeing the Big Picture If you could get an aerial view of the marketing process, it would look like Figure 1-1. Marketing is a nonstop cycle.<br><br> It begins with customer knowledge and goes round to customer service before it begins all over again. Along the way, it involves product development, pricing, packaging, distribution, adver- tising and promotion, and all the steps involved in making the sale and serv- ing the customer well. The marketing wheel of fortune Every successful marketing program 4 whether for a billion-dollar business or a hardworking individual 4 follows the marketing cycle illustrated in Figure 1-1.<br><br> The process is exactly the same whether yours is a start-up or an existing business, whether your budget is large or small, whether your market is local or global, and whether you sell through the Internet, via direct mail, or through a bricks and mortar location. Just start at the top of the wheel and circle round clockwise in a never- ending process to win and keep customers and to build a strong business in the process. CUSTOMER, PRODUCT & COMPETITIVE RESEARCH PRODUCT DEVELOPMENT PRICING SALES LABELS & PACKAGING CUSTOMER SERVICE DISTRIBUTION ADVERTISING, PROMOTIONS & PUBLIC RELATIONS THE MARKETING PROCESS Figure 1-1: The marketing cwheel of fortune. d 8 Part I:Getting Started in Marketing 05_578391 ch01.qxd 12/28/04 8:54 PM Page 8 9 Chapter 1: A Helicopter View of the Marketing Process As you loop around the marketing wheel, here are the actions you take: 1.Get to know your target customer and your marketing environment.<br><br> 2.Tailor your product, pricing, packaging, and distribution strategies to address your customers 9 needs, your market environment, and the com- petitive realities of your business. 3.Create and project marketing messages to grab attention, inspire inter- est, and move your prospects to buying decisions. 4.Go for and close the sale 4 but don 9t stop there.<br><br> 5.Once the sale is made, begin the customer-service phase. Work to ensure customer satisfaction so that you convert the initial sale into repeat business and word-of-mouth advertising for your business. 6.Talk with customers to gain input about their wants and needs and your products and services.<br><br> Combine what you learn with other research about your market and competitive environment and use your findings to fine-tune your product, pricing, packaging, distribution, pro- motional messages, sales, and service. And so the marketing process goes round and round. In marketing, there are no shortcuts.<br><br> You can 9t just jump to the sale, or even to the advertising stage. To build a successful business, you need to follow every step in the marketing cycle, and that 9s what the rest of the chapters are all about. Marketing and sales are not synonymous People confuse the terms marketing and sales.<br><br> They think that marketing is a high-powered or dressed-up way to say sales. Or they mesh the two words together into a single solution that they call marketing and sales. Selling is one of the ways you communicate your marketing message.<br><br> Sales is the point at which the product is offered, the case is made, the purchasing decision occurs, and the business-to-customer exchange takes place. Selling is an important part of the marketing process, but it is not and never can be a replacement for it. Without all the steps that precede the sale 4 without all the tasks involved in fitting the product to the market in terms of features, price, packaging, and distribution (or availability), and without all the effort involved in developing awareness and interest through advertising, publicity, and promotions 4 without these, even the best sales effort stands only a fraction of a chance for success.<br><br> 05_578391 ch01.qxd 12/28/04 8:54 PM Page 9 10 Part I:Getting Started in Marketing Jumpstarting Your Marketing Program Business owners clear their calendars for the topic of marketing typically at three predictable moments: At the time of business start-up When it 9s time to accelerate business growth When there 9s a bump on the road to success, perhaps due to a loss of business because of economic or competitive threats Marketing: The whole is greater than the parts Advertising. Marketing. Sales.<br><br> Promotions. What are the differences? The following story has cir- culated the marketing world for decades and offers some good answers for what 9s what in the field of marketing communications: If the circus is coming to town and you paint a sign saying cCircus Coming to the Fairground Saturday, d that 9s advertising.<br><br> If you put the sign on the back of an elephant and walk it into town, that 9s promotion. If the elephant walks through the mayor 9s flowerbed, that 9s publicity. And if you get the mayor to laugh about it, that 9s public relations.<br><br> If the town 9s citizens go to the circus, and you show them the many entertainment booths, explain how much fun they 9ll have spending money there, and answer ques- tions, ultimately, if they spend a lot of money at the circus, that 9s sales. Because marketing involves way more than mar- keting communications, here 9s how the circus story might continue if it went on to show where research, product development, and the rest of the components of the marketing process fit in: If, before painting the sign that says cCircus Coming to the Fairground Saturday, d you check community calendars to see whether conflicting events are scheduled, study who typically attends the circus, and figure out how much they 9re willing to pay and what kinds of services and activities they prefer, that 9s market research. If you invent elephant ears for people to eat while they 9re waiting for elephant rides, that 9s product development.<br><br> If you create an offer that combines a circus ticket, an elephant ear, an elephant ride, and a memory-book elephant photo, that 9s packaging. If you get a restaurant named Elephants to sell your elephant package, that 9s distribution. If you ask everyone who took an elephant ride to participate in a survey, that 9s cus- tomer research.<br><br> If you follow up by sending each survey par- ticipant a thank-you note along with a two- for-one coupon to next year 9s circus, that 9s customer service. And if you use the survey responses to develop new products, revise pricing, and enhance distribution, then you 9ve started the marketing process all over again. 05_578391 ch01.qxd 12/28/04 8:54 PM Page 10 11 Chapter 1: A Helicopter View of the Marketing Process Your business is likely in the midst of one of those three situations right now.<br><br> As you prepare to kick your marketing efforts into high gear, flip back a page or two and remind yourself that marketing isn 9t just about selling. It 9s about attracting customers with good products and strong marketing communica- tions, and then it 9s about keeping customers with products and services that don 9t just meet but far exceed their expectations. As part of the reward, you win repeat business, loyalty, and new customer referrals.<br><br> Marketing a start-up business If your business is just starting up, you face a set of decisions that existing businesses have already made. Existing companies have existing business images to build upon, whereas your start-up business has a clean slate upon which to write exactly the right story. Before sending messages into the marketplace, know your answers to these questions: What kind of customer do you want to serve?<br><br> (See Chapter 2.) How will your product compete with existing options available to your prospective customer? (See Chapter 3.) What kind of business image will you need to build in order to gain your prospect 9s attention, interest, and trust? (See Chapters 6 and 7.) A business setting out to serve corporate clients would hardly want to announce itself by placing free flyers in the grocery store entrance.<br><br> It needs to present a much more exclusive, professional image than that, probably introducing itself through personal presentations or via letters on high-quality stationery accompanied by a credibility-building business brochure. On the other end of the spectrum, a start-up aiming to win business from cost-conscious customers probably wouldn 9t want to introduce itself using full-page, full-color ads, because prospects would likely interpret such an investment as an indication that the advertiser 9s fees are outside the range of their small budgets. To get your business image started on a strong marketing footing, define your target customer 9s profile and then project communications capable of attract- ing that person 9s awareness and prompting the feeling that, cHey, this sounds like something for me.<br><br> d Pay special attention to the chapters in Part I of this book. They can help you identify your customers, determine price and present your product, size up your competition, set your goals and objectives, establish your market position and brand, and create marketing messages that talk to the right prospects with the right messages. If you haven 9t already settled on your business name, see Chapter 20.<br><br> 05_578391 ch01.qxd 12/28/04 8:54 PM Page 11 12 Part I:Getting Started in Marketing Marketing to grow your business Established businesses grow their revenues by following one of two main routes: Grow market share by pulling business away from competitors. (See Chapter 4.) Grow customer share by increasing purchases made by existing cus- tomers, either by generating repeat business or by achieving larger sales volume at the time of each purchase. (See Chapter 19.) Almost always, the smartest route is to look inside your business first, work to shore up your product and service offerings, and strengthen your existing customer satisfaction and spending levels before trying to win new prospects into your clientele.<br><br> Part V of this book offers a complete game plan to follow. Scaling your program to meet your goal Whether you 9re launching a new business or accelerating growth of an exist- ing enterprise, start by defining what you 9re trying to achieve. Too often, small business owners feel overwhelmed by uncertainty over the scope of the marketing task.<br><br> They aren 9t sure how much money they should dedicate to the effort, whether they need to hire marketing professionals, and whether to create ads, brochures, and Web sites. They may have all kinds of other questions that get in the way of forward motion. And they delay launch- ing their marketing efforts as a result.<br><br> Here 9s the solution: Rather than worry about the tools you need to do the job, first put the task in perspective by focusing on what it is you 9re trying to accomplish. Ask yourself: How much business are we trying to gain? How many clients do we want to add?<br><br> A social service agency might set a goal to raise $100,000 in donor funds. An accounting firm might want to attract six corporate clients. A retailer might want to build an additional $50,000 in sales.<br><br> A doctor might want to attract 100 patients for a particular new service. A weekly newspaper might want to gain 500 new subscribers. By setting your goal first (more on this important step in Chapter 5), the process of creating your marketing plan (see Chapter 22 for how to write a plan in ten easy steps) becomes a focused, goal-oriented, and vastly easier activity.<br><br> 05_578391 ch01.qxd 12/28/04 8:54 PM Page 12 13 Chapter 1: A Helicopter View of the Marketing Process How Small Business Marketing Is Different All marketing programs need to follow the same marketing process, but the similarities between big business and small business marketing stop there. Budgets, staffing, creative approaches, and communication techniques vary hugely between an international mega-marketer like, say, Coca-Cola, and a comparatively micro-budget marketer like, well, like you. This book is for you.<br><br> Here 9s why. Dollar differences As a small business, you already know one difference between your market- ing program and those of the corporate behemoths that loom over you in all directions: The big guys have the big budgets. They talk about a couple hun- dred thousand dollars as a discretionary line-item issue.<br><br> You talk about a couple hundred dollars as an amount worthy of careful consideration. The advice in this book is scaled to your budget, not to the million-dollar jackpots you see referenced in most other marketing books. Staffing differences Look at the organization chart of any major corporation.<br><br> Nearly always, you find a marketing vice president. Under that position you see a bunch of other professionals, including advertising directors, sales managers, online market- ing managers, research directors, customer service specialists, and so on. In contrast, strong small businesses blend marketing with the leadership func- tion.<br><br> The small business organization chart puts responsibility for marketing in the very top box, where the owner, in the essential role, oversees the process as a hands-on task. Creative differences The top-name marketers routinely spend six figures to create ads with the sole purpose of building name recognition and market preference for their brands 4 often without a single word about a specific product or price. Small businesses take a dramatically different approach.<br><br> They want to develop name recognition just like the biggest advertisers, but their ads have to do double duty. You know firsthand that each and every small business 05_578391 ch01.qxd 12/28/04 8:54 PM Page 13 marketing investment has to deliver immediate and measurable market action . Each effort has to stir enough purchasing activity to offset the cost involved in creating and running the ad in the first place.<br><br> The balancing act, discussed in Part III of this book, is to create consistency in your marketing communications so that they build a clear brand identity while at the same time inspiring the necessary consumer action to deliver sales 4 now. Strategic differences In big businesses, bound copies of business plans grace every bookshelf, whereas in many small businesses, the very term marketing plan provokes a guilt pang. If you just felt this typical reaction, turn to Chapter 22 for the anti- dote.<br><br> It provides an outline for putting your plan in writing 4 without any mysterious jargon and with advice and examples scaled specifically to small businesses like yours. Truth is, creating a marketing plan is pretty straightforward and reasonably manageable. It 9s one of those pay-a-little-now-or-pay-a-lot-more-later proposi- tions.<br><br> If you invest a bit of time up front to plan your annual marketing pro- gram, then implementation of the plan becomes the easy part. But without a plan, you 9ll spend the year racing around in response to competitive actions, market conditions, and media opportunities that may or may not fit your business needs. The small business marketing advantage As a small business owner, you may envy the dollars, people, and organiza- tions of your big-business counterparts, but you have some advantages they envy as well.<br><br> The heads of Fortune 500 firms allocate budgets equal to the gross national products of small countries to fund research into getting to know and under- stand their customers. Meanwhile, you can talk with your customers face to face, day after day, at virtually no additional cost at all. Because the whole point of marketing is to build and maintain customer rela- tionships, it stands to reason that no business is better configured to excel at the marketing task than the very small business.<br><br> 14 Part I:Getting Started in Marketing 05_578391 ch01.qxd 12/28/04 8:54 PM Page 14 Making Marketing Your Key to Success How many times have you heard small-business people say that they just don 9t have time for marketing? Think of it this way. It 9s the simple truth that without customers, a business is out of business.<br><br> Because marketing is the process by which your business gets and keeps customers, that means marketing is the key to keeping your business in business. Put in terms like that, marketing is the single most important activity in any business 4 including yours. The fact that you 9re holding this book means you 9ve made a commitment, and that gives you an edge over many of your competitors.<br><br> Go for it! 15 Chapter 1: A Helicopter View of the Marketing Process 05_578391 ch01.qxd 12/28/04 8:54 PM Page 15 16 Part I:Getting Started in Marketing 05_578391 ch01.qxd 12/28/04 8:54 PM Page 16