Using Examples of Successful Business Models to Understand Demographics & Define a Target Market

https://en.wikipedia.org/wiki/Demography

One of the toughest decisions is one that every entrepreneur has to face: to whom will I market my product. Having graduated in business management with a focus on entrepreneurship and strategy, I’m often puzzled by new startups with seemingly no understanding of their target markets. Many entrepreneurs are apparently plagued by the myth “If you build it, they will come.” With little to no effort on their part, these small business owners somehow think a marketing plan will take care of itself and a set of core customers will automatically develop. Sadly, that just isn’t true.

Successful Businesses Analyze Demographics, Understand Their Target Markets  amp; Service Accordingly

Successful businesses are built on competitive advantages. In addition to cost-advantages and product differentiations, businesses build brands based on focus–segmenting the market and catering products and services accordingly. No business can be all things to all people. This fundamental rule is what successful entrepreneurs internalize and base decisions on.

Let’s look at three profitable businesses who understand their places in the industries in which they conduct business. These companies know who their real customers are and act in view of that.

McDonald’s is Cheap. Is McDonald’s trying to be all things to all people? No! The fast-food chain sells low-priced hamburgers and French fries. It’s not super healthy, or that great of quality, but it’s consistent, convenient and cheap. Yes, prices have gone up and the menu has expanded over time, but McDonald’s has built its reputation catering to its target market: consumers who want quick and easy grub, on the go. Even though we all at times may be in the realm of McDonald’s target market, the restaurant chain doesn’t try to serve us every meal we could ever want. It wouldn’t make sense given its supply chain and corporate structure. McDonald’s is fine with you grabbing your filet mignon and caviar elsewhere because it knows those wants are better met by someone else. The company understands, given its core competencies, what its target market really is.

Walgreens is Convenient. Does Walgreens serve the same customers Walmart does? Not really. Yes, people who purchase items from Walgreens can also shop at Walmart. But in the moment you’re checking out at Walgreens, why are you there? Unless there’s a sale, or you have a coupon, Walgreens is not likely cheaper. On regular-priced items, you’re paying a premium for convenience. I shop at Walgreens because it’s on the corner. It’s a small store–I can run in and run out in under five minutes getting the three things I need that can’t wait until my next Walmart trip. And if I run into a problem, I have a much better chance at Walgreens of tracking down an employee and getting the help I need.

Shopping at Walgreens is a different experience. Hence, Walgreens doesn’t generally compete on price. There are sales to get you into the store, and a few novelty items here and there, but mostly customers are paying for a personalized shopping experience in a small drugstore on the corner. Would Walgreens gain sales if the company lowered prices? Yes. But, would the store actually profit from rebuilding the company’s structure and marketing strategy? Not likely. In the moment you’re shopping at Walgreens, you’re a different kind of customer than when you’re shopping at Walmart. Both companies know that and continue to grow their businesses accordingly.

Vitamin Cottage is Eco-Friendly. Locally, and perhaps company-wide, Vitamin Cottage Natural Food Market has discontinued making available plastic and paper bags for customers purchasing goods. Is that a revolutionary idea? Yes! Is it ridiculous? Absolutely not. The company has built its brand as a natural and healthy grocer, intent on saving you and the environment. Yes, the store may lose some customers on the sidelines who like killing the earth one plastic bag at a time. But, the business’ green target market has just become that much more loyal. Vitamin Cottage made a smart business move to further company aims and to appease consumer concerns–all because the store understood its target market.

How Can You, As a Small Business Owner, Get into the Successful Business Model Game?

Realize the Goldilocks Phenomenon. Entrepreneurs face what’s known as the “Goldilocks Phenomenon:” identifying a market not too big, not too small, but just right. Entrepreneurs rightfully do not want to limit themselves into too narrow of niches. But, no company has the resources or product offerings to satisfy everyone. And by trying to please everyone, generally, no one is completely satisfied.

In writing a business plan, honestly identify where your company’s strengths truly are in comparison to your competitors and the market which you plan to serve. If you have no edge in a given field, rethink the business plan. If initial research is showing too small of a target market, rethink the business plan. If the numbers aren’t working out–you guessed it–rethink the business plan.

Do Your Homework. Developing an accurate understanding of your company’s demographics is hard work. And while it’s not enough in and of itself to save a company, the lack of it is enough to kill a startup before it’s ever even gotten off the ground. Clearly, finding the perfect niche in the market would be every businessperson’s dream come true.

So how is it done? More market research, more competitor analysis, and a little more ingenuity. Answer the pertinent questions. Who is buying, or who would buy, what you are offering? If you have customers, interview them. What are the commonalities between your customers: age, sex, education? Race, occupation, hobbies, purchasing habits? If you’re only in brainstorming mode as a potential business, identify your potential competitors and interview their customers. What are the commonalities between them? What are the major differences? See what your competitors are offering and analyze who they are targeting. What are they doing wrong? What market segment is nobody reaching? Can you legitimately deliver to that segment that is presently being underserved?

Stick With It. Continue to conduct market research and employ creative techniques to further identify the circumstances in which your company will need to conduct business. Once you really understand your startups’ demographics, you can begin adjusting your company offerings accordingly. Knowing what to offer and whom to target is a balancing act. Fine tuning the details can take years, but the required effort is worth accurately identifying the perfect target market for your business.

For additional information on how to start a small business, you can visit the U.S. Small Business Administration’s website, which is a valuable resource for budding entrepreneurs.

Tips for the Beginning Small Business Owner

https://en.wikipedia.org/wiki/Entrepreneurship

For many of you, just making the decision to become a small business owner is a big step. For those of you who have already made this decision, congratulations. The problem is, what do you do now that you’ve made this life-altering decision? Many people who started out with dreams of conquering the world have ended up struggling just to conquer their street corner in a world filled with competition and bigger brand-name companies.

The secret for today’s new entrepreneurs lies in the ability to learn from others so you don’t have to make those same mistakes yourself. Keeping these tips in mind that apply to almost every industry (regardless of what’s being sold) will help keep your company afloat while you’re getting your feet wet in the world of business. After all, as cliché as it sounds, you never know when your next idea will be the “big one”, and you’ll want to make sure your business is ready to ride the waves.

First off, come up with a special offer for your customers, such as a discount off a bundle of products or the opportunity to purchase a desirable product you wouldn’t normally carry. This will create an incentive for people to purchase from you. Make sure the “special offer” is just that: an offer that is special. It defeats the purpose of the exercise if the customer can take advantage of the offer by any other means.

he great thing about special offers is the fact that you don’t have to go out of your way to order a slew of new products to put one together. Find a few items in your inventory that are related, discount the price if your customer purchases the whole package, and your customers will be satisfied that you’re giving them a good deal. It’s healthy for your own bottom line as well–you’ve just sold three or four items instead of just one.

Next, keep a sharp eye out for niche markets. Surprisingly, although this is one of the first things new business owners should be looking for, niche markets are overlooked far too often. Within your current customer base there are groups of people with common interests. Maybe you have a group who speaks a second language, or a teenage throng. Maybe your products really speak to the needs of the working class. Try to determine these niche groups within your customer base, and figure out the unique needs they must fill. This leads into “target marketing”, where you construct a marketing campaign solely for this group of people. Take your current advertisements, then change them slightly to speak to these niches. Most likely they’ll be grateful that you took the time to figure out their particular interests, which can lead to an increase in your own profits.

Lastly, consider setting up a referral program. One key strategy many entrepreneurs employ is the tactic of turning customers into mouthpieces for their products. Most of the time, if the product is of good quality and fills a need the company doesn’t even need to ask the customer to promote it to others. Word-of-mouth is an often ignored but necessary means of marketing.

Quality alone will help word spread of your business, but you can help it along even further by offering an incentive to customers who refer you. Give such referrals a special thank you, such as a product they can’t otherwise purchase from you, or a nice discount. Also give out customer surveys with your product delivery, asking what was pleasant about their experience with you and what needs work. A few surveys attached to a request for referrals can go a long way in improving your business.

These tips should help you get over that first rough year as a new business owner. Remember, no matter what happens, treat your customer with the utmost respect and you’re already miles ahead of your competition.

TV Advertising for Small Business: Make TV Ads Sell with Compelling Offers to Increase Traffic

TV Advertising for Small Business

Buying a TV advertising schedule is a significant investment. It’s normal to wonder whether the return will be worth it. Only experience will tell, and there are several ways to minimize the risk.

Make it Sell

The first thing to do is make sure that the ad sells something. The TV sales rep and the station’s production director may want to produce a creative, edgy, attention-getting spot. Creativity and attention are vital, but most of all, the ad must sell.

Selling something is the only chance for a return on the investment. A spot that spends 25 out of 30 seconds being creative instead of selling products or services may earn the station an award from the local ad club. But the real test of the ad’s value is whether it increases traffic and sales.

Do a Break-Even Analysis

Consider very carefully which product or service appeals to the broadest segment of the station’s viewers. Then, do a quick analysis to quantify how many units must sell to cover the cost of the advertising.

If it seems realistic to believe that many units will sell as a result of the ad, and if the business can afford to take the risk that the ad won’t pay for itself, the next step is creating an offer to the potential customer.

Make a Compelling Offer

Is the business introducing something new? Is there a special discount promotion on a product line? Ask what would compel a viewer watching the ad to visit the store or call the office.

Better yet, ask existing customers. Do an informal focus group on the sales floor. Pick a regular customer and ask them. For example, “We might close out this line of products and pick up a new brand. If you were in the market, what discount would it take to interest you?”

Repeat that with 10 or 12 customers, and they will provide a strong sense of what kind of offer they’ll consider compelling enough to take action on after seeing the spot. And, if it’s a sufficient offer to interest current customers, chances are it’ll interest other viewers and convert them into new customers.

Provide a Copy Platform for the Creative Concept

Next, rough out a first draft of what the spot should include. This will give the TV sales rep and the station’s copywriter a good platform for constructing a creative spot that emphasizes the product or service and the offer. This needn’t be breathless prose – it’s just a starting point.

Suggest to the sales rep that they draft three creative concepts for the ad. The rep will work with the station’s copywriter and production director to come up with three different versions of the proposed spot. Then, evaluate all three and choose the one likely to work best.

Control the Content

Once a script is chosen, stay involved with the production. Observe the process to be certain the spot stays on track as it goes together. Trust the professionals on their mastery of the technology, but retain control over the content.

One specific tip: Be certain that the business phone number, location, Web site or other contact information runs throughout the spot. Potential customers have to know how to find the store! Make sure it’s on-screen as long as possible so they can easily write it down.

Scrutinize the Ad Schedule

Check that the ad is scheduled in programs with adequate ratings so the message reaches significant segments of viewers. Watch for overnight placements, which have less value.

Make the first ad sell, and discover the potential of TV advertising.

Small Business Help to Survive Global Recession: Surviving Economic Recession- Marketing and Survival Strategies

Small Business Help to Survive Global Recession

Many small and new business need all the help they can get in a global recession to avoid sinking completely.

Small Business Help to Survive Global Recession

Offer exceptional customer service: Competition is fierce for many businesses, especially small and new ones. Now is the time to focus on offering exceptional service. Customers do remember outstanding service and will actually pay more for a product if they feel valued. Send out regular, personal e-mails detailing special offers, take steps to ensure service delivery is effective, perhaps ask customers to fill out a satisfaction survey. Consider offering flexible payment terms.

Diversify: Specialized goods and niche services are good but consider branching out to offer other business related products or services. Be innovative but be careful not diversify too widely.

Cut costs to survive global recession: Costs can be reduced or even eliminated by using inexpensive business tools, such as using Google Apps to manage company email, documents, spreadsheets, mobile calendar sync. agenda management, lower IT costs etc. Telephone costs and the cost of video conference calls can be reduced with Skype, Mikogo. Be careful not to get into excessive debt, manage cashflow effectively and resist the temptation to spend on staff, software etc. unless there is adequate revenue to cover these expenses.

Small Business Marketing Strategies

Marketing costs can be costly, but without advertising and marketing the business risks sinking in times of global recession. Become more aggressive and more comprehensive than ever.

Consider hiring experts in the marketing field. Other strategies include touching base with clients on a regular basis, setting up an exceptional website with an online store, if applicable.

Small businesses typically have a limited marketing budget if any at all. Consider the following business marketing strategies:

  • Call vendors or associates and ask them to participate in co-op advertising.
  • Take some time to send existing customer incentives for referrals.
  • Consider the value of free publicity, such as radio publicity to boost business. By doing this, a small business owner can position himself or herself as an expert in a given field. If interviewed, have all facts together and be lively and enthusiastic.

If an entrepreneur is considering starting a new business in a time of recession, good businesses to start are typically in the areas of food, clothing, shelter, education, renovations, repairs and entertainment.

Black Friday and Cyber Monday Ideas For Small Businesses

Black Friday and Cyber Monday Ideas For Small Businesses

When owning a small business, coming up with new ideas to boost exposure and income can be challenging. Try participating in Black Friday and Cyber Monday this year to bring attention to your services and products.

Small Business Can Compete With Big Business

Small businesses can often be swallowed up by the masses of advertizing put out by larger competitors. The weekend after Thanksgiving is the biggest shopping weekend of the year and everyone is looking for a deal. Instead of sitting back and praying for a little exposure during the holidays, try getting out there with your own brand of “deals” to be had.

 Small Business Ideas For The Holidays

Home-based businesses are one of the leading choices among parents because it can be more flexible with a family’s schedule. Being home based is an advantage here because while some people really like being out in the malls on Black Friday, others want a low-key day after a holiday full of food and family. Have friends, family and customers over for a Black Friday holiday get together. You can showcase gift ideas and special offers in a laid back environment. It will feel more like a party than a business gathering and gives everyone the opportunity to relax, have fun, and get some shopping done without feeling the pressure of a salesperson or the retail experience. Better yet, you as the business owner, you have the control. Fancy Dinner or cake and coffee? You can decide what works for you and your schedule while taking advantage of a busy shopping weekend. Internet businesses can benefit from Cyber Monday by offering special pricing, free shipping or any number of specials that you may come up with. Proposing things like gift wrapping and delivery services for holiday purchases can draw customers to the convenience that you are offering them.

Service based businesses don’t need to shy away from shopping holidays. In times like these, when money is tight, people want what they need more that extraneous gifts. Suggest gift certificates for services for family and friends or discounted services for referrals. Free gifts with the purchase of a service is also popular. Advertise special rates or practical gift ideas during that first week of the shopping season.

Any kind of business can profit from joining in on the holiday fun. Be creative. Business owners already know how to think outside the box, so put those skills to use. Don’t just get drowned out it all the commercials and sale papers, get out there with your own promotions this holiday season and make yourself heard!

How to Implement Successful Promotions: Promotions Need to Be Planned Effectively to be Worthwhile

How to Implement Successful Promotions

Promotions are part of most small businesses. They range from % off costs to offering a prize to customers and everything in between. Small businesses have specific challenges and their promotions need to be approached differently than those of larger organisations. One of the biggest challenges in small business promotion is working with small budgets.

Small budgets mean more specific promotions

The most important part of any promotion is to figure out the goal of the promotion and then put processes in place to monitor the success of the promotion. Promotions are useful if they achieve their goal. This means that every promotion should have a goal to begin with. It’s important to figure out what the promotion is trying to achieve specifically.

Potential promotion reasons:

  1. Increase sales
  2. Increase brand awareness
  3. Increase brand loyalty
  4. Create a new market or expand an existing one

For example: A cafe introduces a new product; take-home meals. The goal of promotional activity is to increase brand awareness of the new product and the gauge of success is an increase in inquiries online and in store about the new product. Note that the gauge of success is not increased sales as that is not the goal of the promotion. It’s important to be clear on goals and the gauge of success.

Planning a Promotion

A plan for the promotion will assist in ensuring the promotion stays on track. Following is a simplified example of a promotional plan for the aforementioned cafe promotion:

Promotional Plan

Goal/Objective of the promotion: To increase awareness of the new product, ‘Take Home Meals’.

How success will be measured: An increase in inquiries on website and in store

Target market/s: Current customers and busy meal preparers.

Outline of the promotion and how it will achieve the specified goal: An email is sent to the current cafe database outlining the new product and the chance to win a week’s worth of family take away dinners by entering online or filling out a competition entry form at the counter.

Marketing Message: The best solution for busy people. Don’t resort to junk food, take the cafe you love home with you.

Marketing Material: Online form and brochure as well as in store competition forms. Posters and print ads.

Where and how the promotion will be communicated: Current cafe database, ads and editorial in local paper, posters in store.

Timelines and Deadlines: Promotion to coincide with the launch of the product. The promotion will run for one month with prize drawn the following week.

Budget: Prize $250, Marketing: $400, Licensing: $250

Make the next promotion even better

It’s important to also record the results of the promotion as well as any obstacles or unforeseen circumstances. This will assist in future promotional planning. Promotions are great tools for small business as long as they are well thought out and executed.