Last week we discussed about the importance of proper loan management. We saw that if newly acquired fund is properly managed, chances to achieve intended goals and business growth are high. We emphasized on ensuring that acquired fund is used for intended activities to promise business growth.
In today’s topic we are going to discuss about marketing and branding and why it is important to your business.
Marketing a products or services is central activity to any business. Goods or services are produced for sales in exchange of income.. Entrepreneurs’ motivation to do business lies in solving societal problem through selling different products or services in exchange for money.
Marketing is concerned with identifying, anticipating and meeting the needs of customers in return making profit for your business. Meeting customer requirements involve applying a relevant marketing mix including providing the right product at the right price, through the right distribution channels (place) and supported by the most suitable promotional and advertising activities.
The focus of all marketing tasks is a customer: identifying and fulfilling their needs and encouraging loyalty from them to the product. Marketing is about how a company and its products are perceived by the general public, as well as the methods by which the company encourages consumers to buy its products.
There are several approaches that can be used to expand a market. They range from capturing customers of rival companies to expanding to a previously un-served segment of the market. Customers who are not buying a product or service at all are a potentially untapped market. One of the strategies to reach customers who rarely go outside to buy goods or services is to deliver goods to their homes.
The 4 P’s of Marketing
Marketing mix (4 P’s) comprises of decisions that generally fall into the following four controllable categories:
- Product – The first of the Four P’s of marketing is product. A product can be either a tangible good or an intangible service that fulfills a need or want of consumers. Whether you sell custom pallets and wood products or provide luxury accommodations, it’s imperative that you have a clear grasp of exactly what your product is and what makes it unique before you can successfully market it.
- Price – Once a concrete understanding of the product offering is established an entrepreneur can start making some pricing decisions. Price determinations will impact profit margins, supply, demand and marketing strategy. Similar (in concept) products and brands may need to be positioned differently based on varying price points, while price elasticity considerations may influence our next two P’s.
- Promotion – As you have got a product and a price, now it’s time to promote it. Promotion looks at the many ways marketing agencies disseminate relevant product information to consumers and differentiate a particular product or service. Promotion includes elements like: advertising, public relations, social media marketing, email marketing, search engine marketing, video marketing and more. Each touch point must be supported by a well positioned brand to truly maximize return on investment.
- Place – Often you will hear marketers saying that marketing is about putting the right product, at the right price, at the right place, at the right time. It’s critical then, to evaluate what the ideal locations are to convert potential clients into actual clients.
Challenges facing MSMEs in marketing
MSMEs marketing is haphazard and informal because of the way entrepreneurs conducts business. Because they run businesses informally entrepreneurs are busy responding to current opportunities and circumstances and so decision making occurs in a haphazard and apparently chaotic way.
The following are some of the challenges affecting MSMEs when marketing their products.
- Limited resources such as finance, time and marketing knowledge to carry out marketing activities. There is very little effort put to advertise and promote new products.
- Lack of expertise in marketing.
- Entrepreneurs or their managers tend to be generalists rather than specialists. They therefore do not value the roles of marketers in their businesses.
It is advised to consider the following before embarking on marketing your product
One challenge an entrepreneur has to grapple with is to understand the business dynamics within a chosen field. At times, it is taken for granted that entrepreneurs knows a lot about their businesses and are capable to see opportunities or business potentials naturally. This is not the case. There is need for substantial information about the past, present and the future. This information ought to be searched more frequently to remain relevant in the market.
Market research is thus an important element of marketing because this is the process involved in finding out what customers want. Research is a crucial part of all marketing activity regardless of the company size. At the outset of a new business or a new product, research into the target market needs to take place to determine:
- What type of product or service this market consumes and when
- What it is that customers are looking for in the type of product
- What messages resonate with them
- What colors, designs and logos work with them
For MSMEs in the business sector, market research would be relevant in identifying customer preferences, market sizes for various business products, market niches and how to bridge the gaps that may exist. The research may not be elaborated and professionally structured but systematic enough to collect information that helps the entrepreneur to identify who and where their customers are, what are their product preferences and how they would like the product delivered to them.
In addition, a feedback system will be essential to communicate back the customer satisfaction levels and areas of improvement in the products as well as the delivery process.
MSMEs operate in competing environments. Most entrepreneurs work in societies where similar products are sold and targets the same customer base. When a customer decides to buy from a certain entrepreneurs, it is projected that she will never buy from any other entrepreneurs.
Therefore, for a small business to succeed there is a need for the owner to know almost as much about his/her competitors as they do about their own business and customers. Unfortunately, many small business owners make the mistake of waiting until a competitor has opened up shop across the street and is cutting into profits to find out who and what they are up against.
A competitive analysis allows the entrepreneur to identify his/her competitors and evaluate their respective strengths and weaknesses. By knowing the actions of competitors, the entrepreneur will have a better understanding of what energy products or services to offer; how to market them effectively; and how to position his/her business.
Competitive analysis is an ongoing process. It involves gathering information about what is happening in the market place and could be sourced widely. Below are some of the steps that an entrepreneur in the business sector could follow to analyze the competition:
Step 1: Identify competitors. Competitors are those businesses that offer similar products to the same target market.
Step 2: Analyze strengths and weaknesses of those competitors. In which areas are they strong or weak in?
Step 3: Look at opportunities and threats. Are the opportunities and threats similar?
Step 4: Making comparison between the enterprise and competitors.
This analysis should result in understanding the business’s competitive position. Each business would try to capitalize on the competitors weaknesses by using their own strengths to take advantage of the prevailing business opportunities. The other strategy is to avoid or minimize weaknesses and exposure to threats as much as possible.
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