Marketing and Sales
The Marketing Process
- Research: Research is conducted investigating conditions
in the general economy and the specific market the owner/operator plans to
- Marketing Objectives: Objectives are identified that may
address issues such as sales growth, profitability or new product development.
- Segmentation of Market: Segmentation is an analysis technique
used to identify groups of customers who have common needs or wants.
- Selection of Target Market: This involves a decision on
behalf of the business owner/operator to operate in a particular segment
or segments of the market.
- The Marketing Mix: This may be viewed as the tools of
marketing – the 4Ps. These have been traditionally identified as Product,
Price, Place and Promotion.
- There must be a need or want that the product or service is going to fulfil.
It may be difficult to evaluate or understand, but it must be present.
- The customer must have the ability to pay. The credit policy of the owner/Operator
plays an important role in the level of bad debts they experience, the effect
on cash flow and the amount of effort they expend trying to collect these
- Authority to decide: In the buying (or sales) situation different individuals
may play various roles. The owner/operator needs to be able to identify the
roles different individuals may play in the buying situation. Roles may include
the influencer, decider, purchaser and user.
Customer Service includes:
- Understanding service expectations
- Generating repeat business
- Developing customer service skills, and
- Monitoring customer service satisfaction.
Getting to Know the Situation – The TOWS Analysis
- The technique used to conduct a situation analysis is called a TOWS Analysis.
The external analysis lists those factors that are considered to be Threats
and Opportunities. An internal analysis of a business is accomplished by
listing its Weaknesses and Strengths. Strategies identify possible courses
- The TOWS analysis is a further development of the traditional SWOT analysis.
Why use the TOWS concept? It takes the elementary SWOT analysis one step
further down the path in identifying possible future courses of actions (strategies).
Often when inexperienced planners perform a SWOT analysis they are confronted
with four lists of items and that they then find it difficult to progress
to the next important step of identifying possible future actions (strategies).
- The TOWS matrix structures the information so it is easier to analyse and
construct future actions (strategies). The major effort (strategy) of a business
is to use its strengths to exploit its competitors' weaknesses while defending
its position. This means that it recognises internal weaknesses and external
threats and deals with them. How well weaknesses and threats are dealt with
is in part, determined by the creativity of the owner/operator and the level
of resources that can be applied.
Getting to Know Your Market
Getting to know your market involves:
- What needs do they have?
- How many are there? Are their numbers increasing or decreasing?
- How old are they?
- Where are they located?
- What is their disposable income (ability to pay)?
- Who influences the buying decision?
- Who makes the buying decision?
- Who makes the actual purchase?
- Who uses the product?
Knowing their Expectations
- Why do they buy? What motivates them?
- When do they buy?
- How do they prefer to make their purchases?
- What is the reason they purchase from one business and not another?
- How do they behave? Is it changing? If so, in what way?
- How much do they spend in a product category?
- What are their strategies and objectives?
- What is their target market?
- Describe their product mix
- What level of service do they offer?
- What promotion methods do they use?
- Do people complain about their products/services? This allows for the development
of a competitive advantage.
- Increase sales
- Increase profit levels
- New product/service
- Enter new territory
Segment the Market
Basis for segmentation include:
- Geographic: This may include regional, city, urban and rural environments
- Demographic: This includes age, gender, household size, income and occupation
- Psychographic: This includes social class and lifestyle (conservative,
- Behaviouristic: This includes benefits sought, user status (user, non-user),
loyalty status and marketing factor sensitivity (quality, price, service)
Characteristics of good segmentation include:
- Measurability: Can the segments identified be measured?
Is there data available from sources such as the Australian Bureau of Statistics,
industry associations or Local Council?
- Accessibility: Can the owner/operator access the segment?
Do they have the correct location? Can customers interact with them without
too much difficulty? Will they be available to reach the segment with their
- Substantiality: Is the segment large enough to justify
the business servicing it? Will their share of the market generate a profit
for the owner/operator?
- Actionability: Do they have the necessary resources to
service this segment? This could include having the necessary equipment,
adequate personnel, skills and financial resources.
Which Market to Serve?
Selecting the Target Market
- Undifferentiated Strategy: The market is treated as having
no segments and only one product/service is offered to the whole market.
At one time Coca-Cola used this strategy worldwide.
- Differentiated Strategy: Two or more segments are to be
serviced each requiring a different marketing mix. General Motors uses this
strategy to make different cars for different segments.
- Concentrated Strategy: Operations are restricted to one
small segment of the market. Rolls Royce follows this strategy by making
cars for a very small segment of the world car market.
Developing a Position
- Positioning is how customers view competing brands or products. It is based
on their perceptions of major attributes. Attributes include cost, value,
quality, taste and reliability.
- Customers are surveyed and their responses summarised and put on a positioning
map. The map compares two attributes and looks at relationships among the
competing products. The closer the position of two or more competing brands/products/services/businesses,
the more likely they are to compete.
- Positioning is concerned with how people in the market place perceive certain
attributes of different organisation, brands and products/services relative
toe the competition.
- For the small business owner/operating this means asking them how their
customers or potential customers think of their business as compared with
their competitors in the following areas: price (expensive or inexpensive),
quality (high or low), service (late, on time, quick, slow) and product knowledge
- The small business owner must make a decision as to where the business
should be positioned in market relative to competitors. Image and reputation
play an important role in positioning.
- Image is a complex issue and is made up of the feelings, beliefs and thoughts
that people in the marketplace have of the owner/operator, their products
and their business. Some of the things that contribute to image include:
technique used in answering the phone, the ‘look’ of the business (including
logo), stationery and displays, how they dress and customer service.
Your Marketing Tools
- The fundamental marketing tools can be viewed as the 4Ps ( product, price,
place, promotion) and are those factors that the small business operator
largely has under their control. It is how these tools are applied in the
market place that largely determines the success of a business.
- The service industry sector of the economy has grown in recent years. While
the traditional 4Ps still apply to service business, another three Ps are
associated with services.
- People: Since services are intangible, people take on
special importance. How does the owner/operator or their staff interact with
their customers? Are they trained? Appearance is important, does the staff
project a good image?
- Physical Surroundings: What do the facilities look like?
Does the owner/operator use tangible clues to build their image? For example,
a doctor or lawyer will have their degrees and other awards in public view.
- Process: This is composed of policies, procedures and
the flow of activities for dealing with a customer. Services have a high
degree of customer involvement. The customer ought to find the process of
doing business simple. Can they contact the owner/operator easily? Is the
paperwork clear and easy to fill out? Is the paperwork attended to and processed
- Partner: Often an additional P for ‘partnerships’ is added.
This is especially important for service industries but also for outsourcing
and internet activity.
Product and Service Levels
- A Tangible Product: This is what is immediately recognised
as being sold. It is the physical product or service being offered. Examples
include milk, cars, computers, typing services and educational workshops.
- An extended Product: This is a tangible product with associated
services attached. These services ought to be ‘valued’ by the customer. Examples
include packaging, warranty, services, customer assistance and advice and
This may lead to systems selling. For example, an owner of a computer retail
store may sell the PC (tangible product) but will also offer software, printers,
scanners and modems as a complete system.
- A Generic Product: This is the underlying ‘benefit’ that
the consumer expects from the product. Consumers identify the benefit when
they ask the question ‘What do I get out of it?’ Benefits may be broadly
classified as emotional or financial.
An emotional benefit makes the person feel better inside. For example, feeling
safe, showing affection to others or increasing a sense of beauty. Financial
benefits could be applied in situations where you ‘save’ money or you ‘make’ money.
What consumers see as a ‘benefit’ may change over time.
Compare and contrast features and benefits.
- Features are associated with product or service characteristics such as
size, colour and power of motors, functional aspects and hours of business
- Benefits on the other hand are often difficult to uncover but are powerful
in influencing consumers.
Service Business Characteristics
- Intangibility: Intangibility refers to the fact that you cannot see, feel
or smell the services. So the owner/operator attempts to offer some tangible
clues like showing a picture of a person enjoying the service.
Consumers have a difficulty trying to determine the ‘value’ of a service,
so there can be a pricing problem. Try to create a strong image in the market
to justify prices.
- Inseparability: Inseparability means that the consumer
is involved in the production of the service. It places increased importance
on the staff member with whom the customer is dealing. Training is often
needed by this person which may include selling skills.
- Heterogeneity: This involves standards and quality control
associated with the service. Does each customer receive the same level and
quality of service?
Major service providers attempt to set standards regarding service and quality
levels, so that each customer receives the same experience in all their outlets.
- Perishability: This relates to the fact that services
cannot be stored so there is no inventory. Services must cope with fluctuating
Service providers often try to influence demand patterns by varying a price
at certain times of the day, week, month or year. Part time workers are often
used during peak periods.
- Ownership: Ownership of a service is never achieved. Service providers
often stress the ownership of benefits.
- Awareness: In the first stage the consumer needs to be
exposed to the product. It needs to enter their ‘mind set’. This may come
about through the media or by word of mouth. The promotion message at this
stage will be ‘consider this, it is now available’.
- Interest: Once the person is aware of the product they
may be interested and seek more information. The promotional message here
will be information: what it will do, its size, its technical specifications
- Evaluation: At this stage the person is interested in
the product/service category and has compared various products. These products
are ranked according to criteria that the person has developed. Some companies
compare and rank their products against competitors in the media to help
- Trial: The person tries the product or service on a limited
basis to see if it fits their needs. Businesses give samples of a product
or previous of a service (eg first lesson free) to people in an effort to
get them to experience the product. In effect, this has by-passed the first
three stages of the adoption process and it can be expensive.
- Adoption: This person has now become a full time user
of the product.
- Confirmation: After the purchase, the consumer may seek
assurance that they made the correct decision. The consumer may experience
dissonance (tension/uncertainty) and this needs to be reduced. Dissonance
is often more pronounced with high priced products such as a car or having
a swimming pool installed, than repeat business.
Promoting Your Business
The Four Promotional Tools
- Personal selling
- Sales promotion
- Who is the Target Audience? The business needs to know their customers
or potential customers and use this information to advantage in their advertising.
- Where to Advertise? Once owner/operator has determined the target audience,
then they have to identify the most effective advertising method to reach
Spending a lot of money in the wrong advertising media, is not a cost-effective
Possible media alternatives include print, radio, TV, billboards or internet.
- What is the Message? The final stage is to determine what ‘message’ the
business wants to send. The business and marketing plans and owner/operator
knowledge of the target audience will influence the message.
- Attention: The product/service needs to get the attention
of the target audience. There are techniques of getting attention but they
must not hinder the person from going on to the next step – interest.
- Interest: Now the advertisement must hold the interest
of the reader. They must be able to relate to it. Does it look right, is
the right language used and does it make sense to the viewer?
- Desire: The advertisement must arouse a desire or motivate
the individual to further action. Many advertisements will attempt to move
individuals through the adoption process.
- Action: This is the final step in the process. It may
seek to have the members of the target audience try or buy the product.
The seven steps in the sales process:
- Prospecting is when an owner/operator follows ‘leads’. They cannot spend
time with all the possible leads so they must determine which prospects are
going to get more attention – they qualify the prospects.
- Pre-Approach: This involves planning the sales call and
setting the objectives for the call.
- Approach: The method of approaching the potential buyer
may vary due to the sales situation. Some methods include:
- customer benefit approach: If the owner/operator knows a need exists, they
illustrate how their product will do that
- free gift or sample approach may gain goodwill
- question approach involves talking to the prospect to find out what their
needs are and if they are interested in the product or service.
- Presentation and Demonstration: This is when the owner/operator
interacts with the prospect and starts to sell. Presentations typically have
three parts: an opening, a body and a close.
- Handling Objections: This involves informing the prospective
buyer what product attributes, features or capabilities, satisfy the objection.
It is one step along the path forward closing the sale.
- Closing the Sale: This involves an agreement between the
business and the buyer.
- Follow Up: This is an opportunity to create goodwill and
to make sure that the buyer is satisfied with the outcome of the transaction.
It may lead to repeat business.
- Samples: Give away samples of product service.
- Contest: This is a good way to start a mailing list.
- Discounts: Offer a ‘two for the price of one’ or lower
price for a certain period of time.
- Exhibitions: This a good way to show the public what the
business has to offer.
- Demonstrations: Show the public how the product works
and let them see the results.
- Speciality Items: Put the business name or logo on mugs,
calendars, pens, shirts and caps.
- New Technology: This could include using the internet
or creating home pages for products/services.
- Free Promotions: Publicity attempts to influence buyer behaviour, although
it is not paid for by the owner/operator or their business.
- Influence Buyer Behaviour: Its aim is to create a favourite image of the
owner/operator and their business. Recognition, reputation and credibility
are also associated with the process.
- Personal Referrals: Participants should consider using the personal referrals
in their advertising and publicity. They could ask their customers to contribute ‘testimonials’ about
- Word of Mouth: Participants should not overlook the importance of ‘word
of mouth’. Customers who have had a bad experience with a business are more
likely to tell others. Likewise, those customers who have had a complaint
resolved to their satisfaction are likely to become loyal repeat customers.
- Lacks Control: Unlike paid advertising where the owner/operator controls
the message, publicity is dependent on others outside the direct control
of the business. They may interpret things differently to how the owner/operator
wants themselves or their business to be perceived.
The Marketing Plan
- The Executive Summary: This is a brief, but clear description
of the major thrust of the plan. It allows the reader to gain a quick overview
of the contents.
- The Situation Analysis: This addresses market and competitor
issues – size, growth, competition and products. The TOWS analysis is also
- Customer Analysis: This focuses on the target market,
segmentation, and customer needs and characteristics.
- Marketing Strategy: Within the market strategy, objectives
are identified and the marketing mix development. How it gets started is
the role of the implementation or action plan.
- Control: Activities have to be monitored and controlled
to ensure that the plan is on track. Key Performance Indicators (KPIs) need
to be identified and monitored. People often don’t track whether their investment
in marketing has paid off. This may be measured by calculating responses
to advertising, including the Internet, sales and cash flow.
- Finances: The financial section would contain forecasts
and budgets associated with the marketing plan.
- Appendix: The appendix contains any supporting material
that has not been put into the main body of the plan.
Botany Bay BEC
21A Dalley Avenue, Pagewood 2035, Telephone: 61 2 9316 5877, Facsimile: 61 2 9666 5141 email