MARKETING

Chapter 27

What are the fundamentals of a good marketing strategy?

The best marketing strategy will yield whatever level of sales it takes to make a business profitable. Identifying the fundamentals of the best strategy for any business venture calls for merging a thorough understanding of the needs of the potential buyers with a clear picture of the capabilities of the new business. The following worksheet is an example of an exercise that that may help with the assembly of the information necessary to create a successful marketing plan.

27.1 Market Analysis

A. Customers

1. We will be selling primarily to (check all that apply and indicate percentage of total):

a. Individual Consumers _______ ______
b. Wholesalers _______ ______
c. Retailers _______ ______
d. Government _______ ______
e. Other _______ ______

2. We will be targeting customers by:

a. We will target specific lines ________________
b. We will target by the following geographic areas _________________________________________
c. Sales? We will target sales of ________________
d. Industry? Our target industry is ________________
e. Other? ________________

3. This coming year, our target market will spend $________ on our type of product.

B. Competition

C. General Situation

1. The following factors will could greatly affect our product or service (such as trade area growth, industry health, economic trends, taxes, rising energy prices, etc.): ________________________________________________
________________________________________________
________________________________________________

2. The following are some important legal factors that will affect our market: ________________________________________________
________________________________________________ ________________________________________________

3. The following are some important government factors:
________________________________________________
________________________________________________
________________________________________________

4. The following are other factors that will affect our market, but over which we have no control:
________________________________________________
________________________________________________
________________________________________________

27.2 Product Analysis

A. Description

1. The product can be described as:
________________________________________________
________________________________________________
________________________________________________

B. Comparison

1. The market will want this product because:
__________________________________________________
__________________________________________________
__________________________________________________

2. The disadvantage of this product is:
__________________________________________________
__________________________________________________

C. Considerations

1. The raw materials and supplies will come from:
__________________________________________________
__________________________________________________

2. List other considerations about your product:
__________________________________________________
__________________________________________________

27.3 Marketing Strategies

A. Image

1. First, what kind of image do we want to have (economical but good, or one-of-a-kind, or customer-friendly, or premium quality, or easiest to prepare, or fastest to fix, or ..)?
   _________________________________________________

B. Features

1. We will highlight these features:

a. __________________________________________
b. __________________________________________
c. __________________________________________

C. Pricing

3. Do our prices cover costs and leave a margin of profit?

D. Customer Benefits

1. What benefits does the customer receive by using this product?

E. Advertising/Promotion

1. These are the things we want our customers to know:
____________________________________________________
____________________________________________________
____________________________________________________

2. We will use the following advertising/promotion sources:

1. Television ________
2. Radio ________
3. Direct mail ________
4. Word of mouth________
5. Producer groups ________
6. Newspaper ________
7. Magazines ________
8. Yellow Pages ________
9. Shoppers ________
10. Internet___________

We will direct buyers to our website by:

______________________________________

11. Other ________

3. The following are the reasons why we consider the media we have chosen to be the most effective:

__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________

Marketing is a first, last, and always consideration. Before production starts, make sure a market has been established. A fact that too many business owners discover too late is that the world will not necessarily beat a path to their door just because they offer a better mousetrap. Although the product may be the best on the market, a good marketing program is essential for business venture to realize its fullest potential.

It may be necessary to do some test marketing or hire the services of a professional marketing organization. However, before you make the decision to invest in any type of marketing experiment, check with service providers such as ISU Extension, the Iowa Department of Economic Development, the Iowa Department of Agriculture and Land Stewardship, the Small Business Development Center closest to you, or the ISU Center for Industrial Research and Services. It is very likely that any or all of these agencies have case studies or collected examples of marketing strategies that have worked for others.

Chapter 28

What is the best way to get my products to market? Direct? Wholesale? Other?

The answer to that question is largely dependent upon your needed sales volume and your ability to deliver to a given marketplace. Because each business has different needs and strengths, there is probably not a definitive "fits all" answer for this question.

Strategic alliances are frequently the most cost effective way to reach the end consumer. Pooling production through a cooperative arrangement, selling bulk to a wholesaler, or marketing into a supply chain system may be the best way to move any sizable quantities of product. As with many other industries, the food and fiber marketplace is consolidating at a rapid pace. While specialty opportunities still exist in areas such as restaurants, farmers markets, and community supported ag projects, volume food retailing is merging at an ever quickening pace.

Tips to discovering the best way to get your products to market include:

• Study Find out what is working for other successful operations that are similar to yours. Come to know how others succeed.
• Explore Visit the person or business you want to sell to. Go see how people shop at the point-of-purchase -- stand in the aisles of the retail store, attend a farmer's market, dine at a restaurant that could handle your product. Find out what the wholesaler expects from a supplier.
• Compare Look at the existing products presently being handled by your intended market. Does your product fit? What have others done to make their products attractive?
• Understand Become the expert on your customer and, if applicable, your customer's customer. Identify how your product can benefit everyone along the entire market chain.
• Know Know your exact costs of production. Know your business better than your competition.

In many ways, the marketplace and the nature of your final product will dictate whether you sell at-the-market, for a premium, or at a discount through channels that are direct, wholesale, or otherwise. The key is to make sure that you understand the factors of the marketplace so you can produce the quality and quantities that will bring you the greatest rates of return on your investment.

Chapter 29

How often should my marketing strategy be updated?

Marketing is an unending process that continues throughout the life of a business. As a primary component of the business plan, the marketing plan needs to be continually reviewed to ensure every opportunity is being capitalized on. Even though production may be contractually committed at a set rate for periods of time, the marketing process is committed only to constantly seeking greater opportunities for business growth and expansion.

29.1 Five characteristics of the process managed within the Marketing Plan

2. Analysis Marketing priorities are set based on potential and customer demands. The ranking of priorities can be established by asking six questions:

1. How quickly will the marketing opportunity/threat develop?
2. How will it impact our products and operations?
3. How likely is it that it will come to be of major importance?
4. How would our investors expect us to act in relation to this
5. marketing opportunity/threat?
6. What is our ability to react to this opportunity/threat?
7. What are the costs of not reacting to it?

Obviously, those opportunities/threats with the greatest bottom-line impact need to be addressed within the overall marketing plan as quickly as possible.

3. Strategy The third step in the marketing process, developing strategy, is typically a committee exercise that includes top management, production, finance, and any other areas affected by the opportunity/threat.

4. Action Marketing activities are a synchronized and integrated response to the nature of the marketplace. A marketing campaign constantly coordinates all available business capabilities. Some marketing activities might be short lived while others might carry on over a longer period.

5. Evaluation Evaluation is considered by some to be the final step of the process. Others argue that constant evaluation is the process. The point is, regular evaluation of the marketing plan is key to making sure the marketing process being carried out is helping the business achieve its maximum potential.

Chapter 30

What type of public assistance is available for marketing?

Through its Strategic Marketing Services center, the University of Northern Iowa provides companies " . . . a clear vision of the course that lies in front of them through marketing research and analysis. " The SMS center at UNI has been providing a complete array of marketing services 1990 and has worked with a number of Iowa companies in the development of successful marketing plans.

In addition, marketing assistance of various forms is available through the Center for Industrial Research and Service (CIRAS) at Iowa State University. ISU Extension also provides technical assistance for marketing and business development.

Other types of marketing assistance, such as trade show attendance and representation and contacts with potential buyers is frequently available from the Iowa Department of Agriculture and Land Stewardship and the Iowa Department of Economic Development.