HOW TO MARKET YOUR BUSINESS Lecture 8. LOOK INSIDE – CORE SKILLS AND KNOWLEDGE 1. What do I know/do well? –How can I build my skills and knowledge 2.

HOW TO MARKET YOUR BUSINESS

Lecture 8

LOOK INSIDE – CORE SKILLS AND KNOWLEDGE• 1. What do I know/do well?

– How can I build my skills and knowledge

• 2. What do I do well that others have trouble doing well?

• 3. What can I apply to a wide variety of markets

• 4. What do customers value?

CREATING VALUE• What makes the customer want to pay?• Two typical ways

– Differentiation – Providing something special

– Low cost – Providing something acceptable for a lower price

USE THE CUSTOMER’S POINT OF VIEW

• Customer asks “What’s in it for me?”• Customer asks “Why is this product/service

better than other options?”• Features create benefits which satisfy needs• Who pays/who uses?• Check insights with customers

Focus!On your best markets

On your best products and services

Lack of focus will kill a Startup Business

CUSTOMERS

• Consumers

• Businesses

• Manufacturers

• Institutions

• Government

MEASURING STICK• Good product or service

• Can be sold at a profit

• Enough potential buyers

• Timing is just right

• Can tell a story that will make people buy

• Is worth effort/money to get profits

TARGET MARKET• Definable – What do potential customers

have in common?• Meaningful – How do common factors make

customers want to purchase?• Sizable –Are there enough customers with

enough money to keep you in business?• Reachable – Are there affordable and

effective ways to market to your prospects?

KNOW YOUR CUSTOMERSWho are they? How many?Where are they?What do they buy?Why do they buy?When do they buy?How do they buy?Who has the greatest need?Are they really that unsatisfied?Why do they buy from you — or from someone else?

Many Ways to Divide (Segment) The Market

• How is product used?• Where is product used?• Who uses product?• Why does customer like the product?• What benefits does customer get from the product?

Market Trends That Might Affect Demand

• Number of sellers• Regulations and standards• Demographic: it’s easier to sell to people with

money than to those that don’t have any• Buyer behavior• Technology

INDUSTRY ANALYSIS• Major players• Size of the market• Major trends• Environment

– Technological Developments– Economic Developments– Regulatory Developments– Demographic Developments

Know your Competitors• Knowing what your competitors are doing or how

competitive products are designed, marketed and packaged from day-one is essential to determining product positioning and market potential.

Study your Competitors

• Search directories, databases, buyers guides, and other resources by product type

• Use NAICS or SIC codes to search by company type

• Do a patent search to assess new technology. • Interview those in the know• Identify, know, and assess the 5 P’s of

marketing for each competitor.

Five Ps - Product–Most important –What products or services exist that

provide similar benefits? How do they do it?

–Establish your differences from competitors’ product features, benefits, shape, colors, sizes, technology, packaging, etc.

–Identify substitute products/services.

Five Ps - Price• How are the products or services priced?

Does pricing vary significantly?• Establish a pricing scheme by reviewing

competitors’ prices—retail and wholesale.• Can you produce your product/service

within these pricing constraints?

Pricing Factors

Price = Image +Service+Product+Overhead+Profit+Risk

Five Ps - Promotion

The means by which a customer gets information to make a decision about whether or not to buy your product.

Promotion

• How do competitors communicate with their customers?

• Determine competitors’ sales techniques, promotional methods and advertising strategies used.

PROMOTION PYRAMID

Buys

Convinced

Comprehends

Aware of your company

Unaware of your company

PROMOTION RULES

1. Don’t promise more than

you can deliver consistently.

2. Deliver more than you promise.

Five Ps - Place• Determine your competitors’ distribution strategies—

how and where?• Are they selling direct or through a certain channel,

and what are your capabilities of competing in this (these) channel(s)?

Five Ps - PeopleWho are the critical employees? Are skilled professionals needed? Can you recruit the needed employees? Are

there barriers to hiring them?

MARKETING CHECKLIST• Pick your target markets.• Analyze your competition.• Position your products and/or services.• Set goals.• Sell, sell, sell.• Measure results against goals; revise plan as

necessary.

CONSULT RESOURCES!

• Online databases, such as Lexis-Nexis, ABI Inform/ ProQuest, FIND/SVP, EBSCOhost, TableBase, Stat-USA, Wilson Web, etc.– Search for articles, company profiles, or market information– Require subscriptions, but usually available at local library

• Yellow pages– Business-to-Business Yellow Pages– Online Yellow Pages

• Manufacturers’ directories – Thomas Register (www.thomasregister.com)– Dun & Bradstreet (www.dnb.com; hard copy at local library) – Hoover’s Online database (www.hooversonline.com)

CONSULT RESOURCES!• Retailers, catalogs, manufacturers reps,

wholesalers – Manufacturers Agents National Association

(www.manaonline.org)

– Catalog of Catalogs

– www.cataloglink.com

• You Are Where You Live (claritasexpress.com)

• Consumer Reports journals (www.consumerreports.com)

CONSULT RESOURCES!• US Patent Office (www.uspto.gov)• Patent Depository Libraries in Wisconsin: Kurt

Wendt Library in Madison and the Milwaukee Public Library

• Some competitive patents offer good information on market.

• US CENSUS BUREAU (www.census.gov)– Population information

– Information on numbers/types of firms

– By state/zipcode/country/city or by industry

CONSULT RESOURCES!• Trade associations:

– Current and archived newsletters, articles– Associations Unlimited (was Encyclopedia of

Associations)--found at local/public library• Universities

– Whitepapers, reports, studies, ongoing research

• Providers of Market information– American Demographics – Standard & Poor’s Surveys

• Company literature

CONSULT RESOURCES!

• Interviews and surveys to obtain and gauge opinions about potential need or demand (require non-disclosure if needed)

• Can provide not only technical feedback on invention, but also market potential.

• Gets less biased perspective (instead of friends and family)

• Examples:– Company representatives (i.e., sales managers)– University or trade school professors– Purchasing agents of distributor companies– Trade association reps – Writers/columnists of trade magazines– Federal lab professionals

CONSULT RESOURCES!• Others to approach with interviews and surveys (get

nondisclosure if necessary)– Industry experts or professional consultants– Trade show participants– Distributors, purchasing agents, store personnel, sales

people) AND target market

• Possible themes– Customer opinions/complaints about problem– Perceived advantages/disadvantages (or likes and dislikes) of your

concept– Potential changes in industry/market– Intentions to purchase– Appropriate price points– Competitive products

CONSULT RESOURCES!• Consultants• Small Business Administration (SBA; www.sba.gov)

– Small Business Development Centers (www.sba.gov/sbdc)– WISC (http://academics.uww.edu/business/innovate/innovate.htm)

• Online inventor forums:– Inventnet (www.inventnet.com)– Inventors’ Alliance (www.inventorsalliance.org)– National Inventor Fraud Center (www.inventorfraud.com)– Patent Café (www.patentcafe.com)– United Inventors’ Association (www.uiausa.com)