Work 4

Pg 107

Lifestyle/Business-Style Description

In the Target Market section of your plan, convey a sense of the concerns and interests of your customers. How do they spend their time? What issues are they facing in their lives or businesses? With whom do they associate? How do they relate to their employees and community?

Your natural instincts and experience with customers gives you some sense of what your customers are interested in. It’s logical, for instance, to assume that receptive targets for your expensive specialty food product are fairly likely to subscribe to Gourmet or other food magazines and might belong to local food and wine organizations. Or, if the market for your business service is law firms, you would naturally assume they belong to the local Bar Association.

A little research can help you identify other aspects of your target market’s lifestyle or business style. Observe customers in places where they shop or live. What other products or services do they buy? What kinds of cars do they drive? What kinds of clothes do they wear?

Review the publications you think target customers subscribe to. What other companies are advertising? What are the articles about? Survey your customers, whether in person, by mail, or on the phone, and ask them about some of their activities.

What kinds of people or businesses need or want your product or service? Do they go to the movies, watch TV, or stream videos? Do they entertain at home? If so, for whom? What other kinds of products or services would be used in the same setting with yours?

Using the worksheet below and the one on page 108, describe the geographic details of your target customers, whether domestic or international.

Pg 123

Two Competitive Analysis worksheets on pages 124–125 help you evaluate your competitive position in terms of both customer preference and internal operational strengths.

The worksheets enable you to give greater or lesser importance to each competitive factor, depending on the significance of those particular aspects. To complete each worksheet, give each factor listed a maximum possible number of points, ranging from 1 to 10, with 1 being least important to your overall target market and 10 being the most important. Place the maximum number for each factor in the Maximum Points column.

For instance, on the Competitive Analysis: Customer Perception Factors worksheet, let’s say your target market is extremely price sensitive but willing to travel a long way to get a bargain. The purchase price factor might be given a maximum of 10 points and the location factor a maximum of 2.

Once you have finished numbering the factors for your company and competitors, you will see how this weighting system gives you a better picture of the actual strength of your competitors as opposed to your own.

Keep in mind that you can also allot negative numbers. If, for example, your target market is interested only in items perceived as luxuries, having too low a price may be a liability. If your market is particularly socially conscious, the fact that your competitor conducts tests on animals may be a negative for the social image factor in their evaluation, giving you a competitive edge.

In your analyses, look both at specific competitors — particular companies you compete against — and at the overall type of competition. In the example of the Alaskan sports memorabilia store, for instance, the Competitive Analysis might have four competitors listed: each of the two specific retail stores in Seattle and Vancouver, mail-order dealers, and online dealers as categories.

Following the directions on pages 123 and 126, allocate points for each of the factors listed below for both your company and your competitors

Pg 131

Barriers to Entry

Few barriers to entry last very long, particularly in newer industries. Even patents do not provide nearly as much protection as is generally assumed. Thus, you need to realistically project the period of time by which new competitors will breach these barriers.

“As a barrier to entry, it should take significant money and significant skill to enter the business. Patents, while desirable, are not sufficient to protect against new competition, although they help the entrepreneur in raising money because they show the product is unique. Service businesses have a harder time securing venture capital funds because competitors can enter the field easily, and investors are wary. You need barriers to entry to protect your market.”

Market Share Distribution

List below the current market leaders and the approximate percentage of the market each one commands.

Pg 160

What Customers Want: The Five Fs

“The Five Fs,” described below, are a convenient way to sum up what customers want.

1.    Functions. How does the product or service meet their concrete needs?

2.    Finances. How will the purchase affect their overall financial situation — not just the price of the product or service, but other savings and increased productivity?

3.    Freedom. How convenient is it to purchase and use the product or service? How will they gain more time and less worry in other aspects of their lives?

4.    Feelings. How does the product or service make customers feel about themselves, and how does it affect and relate to their self-image? Do they like and respect the salesperson and the company?

5.    Future. How will they deal with the product or service and company over time? Will support and service be available? How will the product or service affect their lives in the coming years, and will they have an increased sense of security about the future?

Customers, of course, want to receive benefits in all these areas, and you should be aware of how your product or service fulfills the entire range of their needs. However, your primary message must concentrate on one or two of these benefits that most effectively motivate your customers and that stake out a competitive position for your company.

You communicate these benefits through every interaction you have with your customers, not simply through your advertising. Naturally, your company slogan and any words you use in advertisements deliver an overt statement to the potential customer. Perhaps the name of the business itself is a direct message, for example, “Toys ’R Us” or “Cheap Tickets.”

The Five Fs

Keeping the Five Fs in mind, describe the message you want to convey to customers about your product or service.

Pg 171 : Online Marketing Tactics