In this article Rebecca Grainger, director of Goldilocks Marketing, gives an overview of what marketing is, why it is necessary, the basics of writing a plan and how to measure its success.
What is marketing?
“The management process responsible for identifying, anticipating and satisfying customer requirements profitably.”
Chartered Institute of Marketing (CIM)
Marketing means business decisions are based on what the customer actually wants and needs, rather than just selling what the business has to offer. As a business, you can use the concept of marketing to:
- Understand your customers’ needs
- Match your business strengths to market opportunities
- Segment what you offer to meet the needs of your customers
Why does a business need marketing?
Businesses need to be able to justify what they are spending and why, not just financially but also – particularly for small businesses – in terms of their time.
The whole point of investing in marketing is to get a better idea of what your customers and potential customers want and need. By understanding your customers and the market in which you operate, you’ll be able to retain existing customers by keeping them satisfied and be better and more attractive than your competition. You’ll also be more aware of, and keep up with, changes in the market. For example technological advancements in the past year or so has meant a massive increase in customers using mobile phones and tablets to surf the ‘net across almost all sectors. By knowing this, you can make sure your site displays well on mobile devices.
Of course, the obvious and ultimate reason for carrying out marketing within any business or organisation is to improve your operations by increasing efficiencies and to provide a better or different service from your competitors. This should lead to an increase in turnover, leading, in turn, to increased profits.
Creating a strategic marketing plan
External market assessment
Start by looking at the things that impact upon your business that you have little or no control over. Knowing about your competition and changes in the wider environment will give you the competitive edge and prepare you for forecasted challenges ahead.
Typically you should carry out the following analyses:
- Competitor analysis: Use the 7ps (product, price, place, promotion, people, process, physical evidence) to compare yourself to your competition. This will give you a good understanding of how your customers will see you and make you aware of any changes you need to make to what you’re offering and the price you’re offering it for, as well as where you’re promoting yourself.
- PESTLE analysis: Assess the Political, Economic, Social & cultural, Technological, Legal and Environmental factors that might impact upon your business.
- SWOT analysis: A favourite for any business plan! Use the above research to assess your Strengths, Weaknesses, Opportunities and Threats. Be honest and turn those threats into opportunities!
Internal market assessment
Now you’ve dealt with the things you can’t change, it’s time to look at the things you can do something about. An internal assessment gives you a better understanding of what you do already and where you are in terms of the number of customers you have and their perception of you. You can then use this to plan where you want to be in the future and how you’re going to achieve that.
- Review of current marketing mix
Existing businesses should look at everything they have done to promote themselves. Think ‘who, what, where, when, why and how much?’ How does this compare to your turnover? For new businesses, a good place to start if by looking at what similar businesses do for their marketing – where do they advertise, how much do they spend, how does this compare to their turnover?
- The market: Market size and current/projected market share
Who are your potential customers (your target market)? How many people are there within this target market within your regional area of business? How many customers do you currently have? Divide the two and that’s your current market share. Project your potential market share by looking at the number of competitors and their market share.
- Market research and customer insight
Do you know who your customers are, what they want and what they think of you? If not, find out! It’s essential to know this before you can plan what you’re offering, who you’re offering it to and at what price.
When you’ve got your external and internal market assessments sorted, you can now plan what you are going to do, how and why. Here’s how…
- Set your aim(s) & specific, measurable, achievable, realistic, time bound (SMART) objectives. What is your goal and when do you want to acheive it by? I usually work with a three year overview and a detailed annual plan.
- Define target markets (who they are and what they need)
- Set your budget (this should be 5-10% of turnover)
- Plan your marketing mix with resources and action plan
- Evaluation/review setting
Evaluating how well your marketing activities has gone obviously depends on the aim and objectives of your business and marketing plans. Set measurable objectives at the beginning and give them timescales, and you’ll be on course to measure the return on investment of your time and money.
Measuring success also comes down to what methods you use to promote your business. For example a company with an agressive online campaign would need to measure website hits, customer engagement, improved search engine rankings etc.
Some typical marketing measures include:
- Use of resources
- Customer satisfaction
- Turnover and profit
- Return on investment (ROI)