Archive for price:

Is there a difference between Marketing and Business?

By kphmc June 27th, 2011 business growth, marketing strategy, What is Marketing 1 Comment

Had a couple of interesting conversations with prospects this week and both commented that they didn’t realise marketing covered products, pricing and goals.

It reminded me that many people only consider Promotions as marketing. This is only one P in the marketing mix. The short list consists of the Four Ps – Product, Price, Place and Promotion. It is extended for Service Marketing to the seven Ps. The four plus People, Process and Physical Evidence. and, that’s enough of the theory for today

Marketing, as defined by the Chartered Institute of Marketing, is

The management process responsible for identifying, anticipating and satisfying customer requirements profitably.

I’ve always liked the CIM definition because it encompasses much more than an ad campaign, producing leaflets, flyers or going on Twitter.

Small business owners think about the management process responsible for identifying, anticipating and satisfying customer requirements profitably. But, it’s thought about as something different to marketing.

Perhaps this is where Business coaching comes in. And, because it stops before the P for promotions, the advice and guidance can fall down or not be followed through.

Still, turning back to Marketing as the CIM defines it.

To be able to identify, anticipate and satisfy customer requirements, there are a few activities and let’s break them down.

Identify Customer Requirements

We start off with creating a customer profile. And, there is a different profile for each type of customer the business serves. For example,

For an IT company who services computers for both consumers and businesses, there will be at least two profiles

Sam has broadband at home. There is a family machine that is a bit old but does the job of keeping the household accounts etc and it’s linked directly to the broadband connection. Each child in the household has a laptop to do their homework, keep in touch with their friends and download music and videos. Sam isn’t particularly technical; has success in plugging stuff together and it works. Sam knows that backing up and security is important yet, it remains low down the list of chores to do when home from work.

Charlie started the business a few years ago and it now has 7 staff. In the beginning it was pretty easy, and problems few. Now, there’s a server for file sharing, internal emails, shared printers and keeping all the software up to date and keeping the staff up to date with using it effectively. Charlie knows that if the computers went down, it wouldn’t be long before the business suffered. Charlie has to make sure there is a continuity plan and that it works should the unthinkable happens.

Once these profiles are drawn, they become people. So, everything done can be run past Sam and Charlie. Would they like this? Would it serve their needs? Would they pay for it? And, how much?

Creating the customer profile comes from identifying common themes from your existing customer base. And, when you want to go into a new segment, then some market research is required to find out what the profile would be. Of course, this would be tested and retested fine tuning the profiles and gaining better results.

Anticipate Customer Requirements

You may be thinking, surely this is the same as identifying.

Once the customer profile is complete, attention can turn to what’s happening out in the world and what will be the reaction of your customer profile.

Everything is moving so fast, and people adopt new things at different stages. So, for some of the customer base, being informed of the impact of the latest trends on them would be vital information and a trigger to repurchase. Their opinion of your company would be reinforced as a “mover and shaker” or a font of knowledge. People like to buy from experts!

Going back to the IT company example, the managing director considers what is happening in each of the following:

Political – what’s on the agenda for policy changes? Is there a change in government likely? Is there stability locally and abroad?

Economic – what’s the economic forecast? Is there growth, decline or staying the same? Is unemployment rising? What’s happening about interest rates? Is credit available?

Legal – how are the new laws impacting upon the lives of the customer base? Are there new measures coming to affect the business? Are all the employment law requirements met?

Technological – what are the trends for technology? What are the implications for laptops when considering smart phones and tablets? What about cloud technology? Who is it really aimed at? What about computer security? And more widely, how will these changes impact upon the lives of the customer profile.

It wasn’t that long ago that a dial up modem was used for accessing the internet. Now, phones that do that. For some businesses, these changes have been huge opportunities. For others, they’ve spelled doom and disaster. Yet, it doesn’t have to be!

So, by scanning the external environment, customers’ requirements can be anticipated. New products and/or services can be developed. How these anticipated needs are interpreted can be part of how a company can differentiate themselves from the competition.

Satisfy Customer Requirements

Satisfying customer requirements is very broad and covers the

Wow! Factor that the customer’s requirements has been anticipated
What was said and how it was said in promotions
The service they receive initially and throughout the lifetime of the customer
Response received what calling the company
How the company adapts to changes in the environment
Being consistent in all communications

With regards to satisfaction, this is a moving target. Business have to be continually adapting to the environment and to customers to retain customers and grow the business.

Profitably

This is a brilliant word. Everyone knows that profits are what’s left from the sales revenue after all the costs and taxes have been paid.

This means that the Price paid has to be more than the sum of the costs.

The Price will vary according to the segment of the market. Going back to the IT company, the home user market has different service needs to the networks business environment with several staff members.

The routes by which the customer can purchase (P for Place) also can have an impact on Profitability. Consider, the supermarkets, Daz washing powder is found in each retailer yet the price may be different in each. You may expect it to be higher in Waitrose and Sainsbury than in Asda, Tesco or Morrisons. Yet, it’s the same product, just a different environment appealing to a different customer segment.

Management Process

The process is the glue by which all the various elements work toether to achieve the results sought. Where there is a team of people working on marketing or there is a dedicated person, having a well defined process is a given. Marketing actvity has a place in each element of the process. See the diagram below for how elements of the marketing mix fits together.

When we learned what satisfies todfay, it helps to inform how we develop our services, produce enhancement, pricing and promotions. Marketing activity is continuous and enbales us, as business owners and marketers, to identify-anticipate -satisfy requirements.

So, the next time marketing comes into your mind, let it wander and take in the richness, depth and huge impact it can have on your business.