Lesson 4: The Marketing Process – Pains and Gains

Understanding marketing

Marketing involves understanding the price of your product, how you’re going to position it, what the actual product is, and where you’re going to make it available. Put all of that together and present it to your target market in the right way, and you’ll have a successful product.

The 5 C’s of Marketing Analysis (Source)

Let’s break down what you need to know to put together some marketing collateral.

 

Understand your product or service

A person’s perception is their reality. You may have a product or service that could satisfy the needs of a particular market segment, but your customers don’t necessarily know that. You face the challenge of persuading them to buy from you. Start by asking these questions:

  • What is the purpose of your product or service? Remember, this needs to be from the customer’s point of view – what does it do for them?
  • How can your customers access it; how is it delivered to them?
  • How much does it cost?
  • How economical or sustainable is it to produce?
  • What are the wider implications of using your product, environmentally or socially?
     

All of this information should be communicated both verbally and in writing – on the back of your product, on the pages of your website, or within your product literature or brochures. Your staff and salespeople need to be able to deliver this information in a simplified, customer-centric way.

In the end, getting your product or service noticed involves influencing the perceptions of others. If you are going to build a successful business, you have to sell to people who don’t currently understand the value of your offering. And if you’re going to do that, you need to know who those people are.
 


Knowing your audience and identifying your competitors

Know Your Audience

You need to create a human connection with your potential customer. Think of something that you know absolutely everybody likes. What came to mind? Holidays? Well, time off actually stresses some people out more than it relaxes them. Puppies? Some people are afraid of or allergic to dogs. Chocolate? As strange as it might seem, not everybody loves chocolate.

It’s difficult to think of something everyone shares. People are all different – we all like, want, and need different things. Our choices are motivated by our personal thoughts and preferences. Your business works the same way. It’s not a “one size fits all” solution. Certain people will absolutely love your product or service and rave about it constantly. Others simply won’t see the point of or value in what you’re offering.

Understanding your ideal customer will help you craft your marketing message. This means understanding:

  • Who they are
  • Where they live
  • What income bracket they fall into
  • What their exact needs are
     

This information helps you determine their specific needs and how to meet them. As we keep saying, your product or service must solve a problem and add value to their life or work. Creating a strategy with your ideal customers in mind will help you avoid wasting time and resources on unsuccessful marketing efforts. By listening to your customers’ needs, you can put your resources to work in powerful and profitable ways.

Take a look at the diagram below. The big question is: what problem are you solving for your ideal customer? This customer should share your worldview (or your brand’s worldview, at least), have the time and the money to spend on your product, understand what your business is about, and become familiar with your product or service. All of these factors will affect the way you engage with them in meaningful and useful ways.

Identify your competitors

Once you have a good sense of your product and audience, it’s time to bring your focus closer. Your next step is to examine the businesses directly affecting your company – in other words, your competitors.

All businesses face competition. Even if you’re the only restaurant in town, you still compete with movie houses, bars, and other businesses where your customers will spend their money instead of with you.

Knowing who your competitors are and what they offer helps you make your products, services and marketing stand out. It enables you to set your prices competitively and respond to rival marketing campaigns with your own initiatives.

A direct competitor sells a very similar product to you, like Coca-Cola and Pepsi. An indirect competitor sells a product that someone might buy as a replacement for yours, that can fulfil the same need in a different way, like Coca-Cola and Valpre spring water or an orange juice brand. All these brands solve the problem of thirst, but in different ways. A competitor is any business that competes against you for your target customers’ time or money.

Let’s take the example of a person who needs to commute to work and considers buying a Toyota.

Toyota’s competitors will be any businesses that:

  • Produce the same product at a similar price
    Example: Toyota and Ford both produce affordable cars
  • Produce the same product at a much higher or lower price
    Example: Volvo produces much more expensive cars than Toyota, while Tata makes cheaper ones – though obviously, they highlight different areas of value. 

Understanding the customer’s needs and buying power here will indicate whether Toyota should try to compete on price with Tata, or on quality and safety with Volvo

  • Produce a different product that effectively provides the same result
    Example: Vespa produces scooters, which could replace a car in commuting to work. The city government may provide a cheap public transport solution, which would also compete as an option for the Toyota customer
  • Produce an unrelated product that competes for the customer’s time, money or attention
    Example: Flight Centre offers holiday packages that could divert the customer’s funds, or they may simply get distracted by another advert or piece of content and forget their intent to purchase the car.

The first two are direct competitors; the next two are indirect.

As you can see, the term “competitor” can cover a vast swathe of businesses and industries. In a broader sense, think of a competitor as a brand or product that reduces the value of, or need for, what you offer.

Of course, you won’t be able to list every single company that could possibly affect your customer and their purchase decisions. Narrow down your focus to a handful of key businesses that can really make a negative impact on your bottom line.

Choosing these comes down to understanding your customers. Rather than thinking of competing products, think about your customers’ needs and wants, and who else might be fulfilling these.

Find out as much as possible about your competitors. Read about them, go online, speak to your competitors and then evaluate the information you find. This should tell you whether there are gaps in the market that you can exploit. Ask yourself:

  • What can I learn from my competitors, and what can I do better?
  • What are they doing worse than us?
  • What are they doing the same as us?

Once you have done this research, you have to assess their strengths (e.g. customer base, revenue base, cash resources and product offering) and weaknesses to see if you can build a better customer experience within your budget.

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