Marketing FAQs
Where can I find the association for the industry that I wish to enter into?
Two excellent sources for locating associations are the American Society of Association Executives and the Marketing Resource Center. By using their interactive keyword search capabilities, you can search through over 35,000 associations and organizations that cover almost every type of business imaginable.
Where can I go to find the Chambers of Commerce surrounding the community where I wish to open my business?
ChamberBiz.com has a very comprehensive on-line Chamber Finder tool that should be point you in the right direction.
What does marketing involve?
Marketing is your most important organizing tool. There are four basic aspects of marketing, often called the four Ps:
- Product: The item or service you sell.
- Price: The amount you charge for your product or service.
- Promote: The ways you inform your market as to who, what, and where you are.
- Provide: The channels you use to take the product to the customer.
As you can see, marketing encompasses much more than just advertising or selling. For example, a major part of marketing involves researching your customers: What do they want? What can they afford? What do they think? Your understanding and application of the answers to such questions play a major role in the success or failure of your business.
What is my market potential?
The principles of determining market share and market potential are the same for all geographic areas. First determine a customer profile (who) and the geographic size of the market (how many). This is the general market potential. Knowing the number and strength of your competitors (and then estimating the share of business you will take from them) will give you the market potential specific to your enterprise.
What about advertising?
Your business growth will be influenced by how well you plan and execute an advertising program. As it is one of the main creators of your business' image, it must be well planned and well budgeted. Contact local advertising agencies or a local SBA office to assist you in devising an effective advertising strategy.
How do I set price levels?
The price of a service or item is based on three basic production costs: direct materials, labor, and overhead. After these costs are determined, a price is then selected that will be both profitable and competitive. As pricing can be a complicated process, you may wish to seek help from an expert.
Are some locations better than others?
Time and effort devoted to selecting where to locate your business can mean the difference between success and failure. The kind of business you are in, the potential market, availability of employees, and the number of competitive establishments all determine where you should put your business.
Is it better to lease or buy the store (plant) and equipment?
This is a good question and needs to be considered carefully. Leasing does not tie up your cash; a disadvantage is that the item then has no resale or salvage value since you do not own it. Careful weighing of alternatives and a cost analysis will help you make the best decision.
How do I find out about suppliers/manufacturers/distributors?
Most suppliers want new accounts. A prime source for finding suppliers is the Thomas Register, which lists manufacturers by categories and geographic area. Most libraries have a directory of manufacturers listed by state. If you know the product line manufacturers, a letter or phone call to the companies will get you the local distributor/wholesaler. In some lines, trade shows are good sources of getting suppliers and looking over competing products.
Why do I need a sign for my business?
There are many reasons, the most primary of these being:
- Signs are the most effective, yet least expensive, form of advertising for the small business.
- A sign is your introduction and handshake with those passing by, identifying your business to existing and potential customers.
- Signs are always on the job for you, advertising 24 hours a day, 365 days a year.
- People often judge a business by how it looks on the sign.
- Many merchants increase their business measurably just by adding a good sign. Conversely, many have gone out of business because they simply were not identified well, so not enough potential customers knew of their existence. As one sign industry professional put it, "A business without a sign is a sign of no business."
- We live in a mobile society. According to the United States Census Bureau, 18% of households relocate each year. As your customers move, you need to replace them by attracting new customers
For additional information, please review the Understanding the Value of Signage section.
Is signage expensive?
Signage is the least expensive, yet most effective, form of advertising for independent and national retail businesses.
- You pay for the sign once and it works for you 24 hours a day, 7 days a week for years. Use of other media requires paying month after month and you never have the benefit of ownership. You also have no assurance that you're reaching potential customers.
- From a business owner's perspective, a sign should not be viewed as an expense, but as a capital investment. When you factor in your return on investment, signs are not expensive. An effective sign will most likely pay for itself many times over.
- The price for signage will vary greatly depending upon the size, design, style, manufacturer, and mounting type.
In addition, please review the Understanding the Value of Signage section of this site.
How do I go about obtaining a UPC Bar Code for a product I am manufacturing?
In order for you to be able to print UPC bar code symbols, you will need to become a member of the Uniform Code Council, Inc. (UCC). Once a member, you will be assigned an identification number that will be specific for your company only. To learn more about obtaining a UPC bar code symbol visit the Uniform Code Council, Inc. web site.
I am interested in making my first big sale to a customer that I don't know much about, and therefore I am worried about whether or not I am going to get paid on time. Where can I go to find out more about a company's credit worthiness?
Try Dunn & Bradstreet's Small Business Solutions. D&B Small Business Solutions gives you easy access to a suite of online tools and services that will help you make better informed credit decisions, find new customers, monitor your competition, and more.
What are the advantages and disadvantages of Yellow Pages advertising?
Advantages of Yellow Pages advertising:
- One ad works all year long.
- It gives your prospect a method of easily locating and contacting your business, even if they didn't initially know your name.
- It can help you describe the differences between you and your competition.
- You pay by the month instead of one large payment.
Disadvantages of Yellow Pages advertising:
- You must commit to an entire year of advertising.
- You are immediately placed with a group of your competitors, making it easy for the prospect to comparison shop.
- Some classifications are so cluttered with advertising that your ad becomes buried and ineffective.
- It is only effective when a prospect looks you up in the correct classification, assuming the prospect knows what classification to look for in the first place.
How can I determine if Yellow Pages advertising will benefit my business?
Probably the easiest way to determine whether or not Yellow Pages advertising is effective for your particular business is to look in the Yellow Pages under your business category and observe the types of ads that your competitors are taking out. If you see a lot of ads (and especially big and expensive ads), you can assume that these businesses are making this type of investment because it has paid off for them. If you don't have any competitors in your particular market, refer to the Yellow Pages in another community close by or in another geographic area similar in make up to yours.
What exactly is specialty advertising?
Specialty advertising basically consists of giveaways - the pencils, pens, buttons, calendars, and refrigerator magnets you see everyday - are called specialty advertising in the trade. Chances are, you have some specialty advertising items right at your desk. Businesses imprint their name on items and give them away (or sometimes sell them at very low cost) in order that:
- You notice their name enough times on the item to build top of the mind awareness, so when you need a restaurant, for instance, you think of their name first.
- You appreciate the goodwill of the company giving you the item and eventually return the favor by giving them some business.
My business associate suggested that I use outdoor advertising. We don't have many billboards in our community, so why should I consider outdoor advertising?
When people think of outdoor advertising, they usually think of the colorful billboards along our streets and highways. Included in the outdoor classification, however, are benches, posters, signs, and transit advertising (the advertising on buses, subways, taxicabs, and trains). They all share similar advertising rules and methods. Outdoor advertising reaches its audience as an element of the environment. Unlike newspaper, radio, or TV, it doesn't need to be invited into the home, and it doesn't provide entertainment to sustain its audience. Here are some reasons why businesses use outdoor advertising:
- Since it is in the public domain, outdoor advertising assuredly reaches its audience. People can't switch it off or throw it out. People are exposed to it whether they like it or not. In this sense, outdoor advertising truly has a captured audience.
- Its messages work on the advertising principle of frequency. Since most messages stay in the same place for a period of a month or more, people who drive by or walk past see the same message a number of times.
- Particular locations can be acquired for certain purposes. A billboard located a block in front of your business can direct people to your showroom, or you can reach rural areas efficiently by placing it billboard in each small town.
- Outdoor advertising is an excellent adjunct to other types of advertising you are doing. In fact, it is most effective when coupled with other media.
What is co-op advertising
A relatively unknown form of advertising, co-op is a cost-sharing arrangement in which manufacturers and suppliers provide financial assistance for customers' advertising programs. It can often make the difference in whether or not a small business can afford to advertise at all. Co-op advertising works in a number of ways. For example, a retailer can buy goods from a manufacturer and accrue co-op funds based on the amount of purchase. Those funds can be returned in the form of a cash rebate, a credit to the retailer's account, or in products. In case you're thinking your firm is too specialized to take advantage of co-op advertising, you may want to reconsider. The Co-op Handbook, published twice a year by the Yellow Pages Publishers Association (YPPA), contains thousands upon thousands of co-op program listings. Indexed by brand name and company, each listing provides the company name, the type of plan it offers, whether mention of competitors is allowed, and the type and size of ads required.
Is there a direct link to the various federal agencies collecting statistics that might be helpful to me?
Yes, the site is http://www.fedstats.gov/. FedStats is the new window on the full range of official statistical information available to the public from the federal government. This site allows you to use the Internet's powerful linking and searching capabilities to track economic and population trends, education, health care costs, aviation safety, foreign trade, energy use, farm production, and more. Through this site you can access official statistics collected and published by more than 70 federal agencies without having to know in advance which agency produces them.
Advertising
What Advertising Can Do For Your Business
- Remind customers and prospects about the benefits of your product or service.
- Establish and maintain your distinct identity.
- Enhance your reputation.
- Encourage existing customers to buy more of what you sell.
- Attract new customers and replace lost ones.
- Slowly build sales to boost your bottom line.
- Promote your business to customers, investors, and others.
What Advertising Cannot Do For Your Business
- Create an instant customer base.
- Cause an immediate, sharp increase in sales.
- Solve cash flow or profit problems.
- Substitute for poor or indifferent customer service.
- Sell useless or unwanted products or services.
Advertising's Two Important Virtues
- You have complete control. Unlike public relations efforts, you determine exactly where, when, and how often your message will appear, how it will look, and what it will say. You can target your audience more readily and aim at very specific geographic areas.
- You can be consistent, presenting your company's image and sales message repeatedly to build awareness and trust. A distinctive identity will eventually become clearly associated with your company, like McDonald's golden arches. Customers will recognize you quickly and easily - in ads, mailers, packaging, or signs - if you present yourself consistently.
What Are Advertising's Drawbacks?
- It takes planning. Advertising works best and costs the least when planned and prepared in advance. For example, you'll pay less per ad in newspapers and magazines by agreeing to run several ads over time rather than deciding issue by issue. Likewise, you can save money by preparing a number of ads at once.
- It takes time and persistence. The effectiveness of your advertising improves gradually over time, because customers don't see every one of your ads. You must repeatedly remind prospects and customers about the benefits of doing business with you. The long-term effort triggers recognition and helps special offers or direct marketing payoff.
Getting Ready to Advertise - Drawing the Blueprint
1. Design the Framework
- What is the purpose of your advertising program? Start by defining your company's long-range goals, then map out how marketing can help attain them. Focus on advertising routes complementary to your marketing efforts. Set measurable goals so you can evaluate the success of your advertising campaign. For example, do you want to increase overall sales by 20% this year? Boost sales to existing customers by 10% during each of the next three years? Appeal to younger or older buyers? Sell off old products to free resources for new ones?
- How much can you afford to invest? Keep in mind that whatever amount you allocate will never seem like enough. Even giants such as Proctor & Gamble and Pepsi always feel they could augment their advertising budgets. Given your income, expenses, and sales projections, simple addition and subtraction can help you determine how much you can afford to invest. Some companies spend a full 10% of their gross income on advertising, others just 1%. Research and experiment to see what works best for your business.
2. Fill in the Details
- What are the features and benefits of your product or service? When determining features, think of automobile brochures that list engine, body, and performance specifications. Next, and more difficult, determine the benefits those features provide to your customers. How does your product or service actually help them? For example, a powerful engine helps a driver accelerate quickly to get onto busy freeways.
- Who is your audience? Create a profile of your best customer. Be as specific as possible, as this will be the focus of your ads and media choices. A restaurant may target adults who dine out frequently in the nearby city or suburban area. A computer software manufacturer may aim at information managers in companies with 10-100 employees. A bottled water company may try to appeal to athletes or people over 25 who are concerned about their health.
- Who is your competition? It's important to identify your competitors and their strengths and weaknesses. Knowing what your competition offers that you lack - and vice versa -helps you show prospects how your product or service is special and why they should do business with you instead of someone else. Knowing your competition will also help you find a niche in the marketplace.
3. Arm Yourself with Information
