Strategic Marketing - Dissertation Example

1.0 Introduction. The financial crisis has been an erupted volcano for banks, investment banks and financial s. It is now starting to take hold of the real economy. The real economy, of factories, shops, businesses and consumers. The demand for products and services is dropping fast in this real economy. Businesses are losing customers, no new product launches and are having to lay-off employees. In such a context, small and medium-sized enterprises (SMEs) are particularly vulnerable to the credit crunch due to their heavy dependence on bank credit, and limited recourse to financial markets. Firms with the weakest financial structure and lower credit rating, such as SMEs, suffer most. This is not the end of it, as companies big or small do have plans and different ways to face this crisis. The main purpose of my dissertation is to highlight the marketing strategies that can be implemented in fighting the financial crisis. For most small business owners, marketing is an overwhelming concept. They need marketing solutions that ensure a smooth-running, profitable business and cannot do conventional marketing because of the limitations of resources which are inherent to all SMEs. SME owner/managers behave and think differently from conventional marketing decision-making practices in large companies. The answer lies in strategic planning that can see one go through in these times of serious downturn. Companies whether big, small or medium need to identify potential risks and affects of recession on their business, they need to stay focused on their goals and offer products or services that are indispensable even in a down economy. While staying focused, you should find ways for a profitable expansion. If you can grow in times of economic recession you will find yourself on the other side of the crisis - ahead of your competition. You just need to change your strategies to adapt to the prevalent situation. Recession doesn't mean that there are no buyers for your products or services. There are buyers; the only thing is that the spending power of the consumers may have been reduced and their purchasing now involves more focus, more thought. They are now looking for best products or services at the minimum possible prices. They are not after the brands; and are looking for only complete value for their money. Therefore, Surviving in hard times requires a strong determination and a positive attitude. But in today's fast and merciless marketplace, more is needed than a winner's attitude. The following chapter is where the dissertation starts explaining in brief a number of small business hard time strategies to help steer the chopping waters of commerce. 2.0 Strategies for SMEs to fight Economic Crisis 2.1 Cost cutting For small business, cost-cutting needs to be implemented with the precision of a surgeon's scalpel. Cut too deep and your business will never recover. Cut too shallow and cash flow problems could force you to the back of the unemployment line. Look at percentages rather than dollars and cents. If your expenses are chewing up your profits, you need to take action. There are two ways to improve sagging profits: sell more or cut costs. However, if revenues and expenses grow at the same rate, selling more won't fix an anemic bottom line. "Mistake No. 1 is thinking that marketing is the best place to cut when businesses are looking to tighten their belts," says Ann Handley, chief content officer at Marketing Professionals. "But it's not the time to jettison marketing. If business is slow and you're reining in your plan to get your name out there, it means fewer leads, less business and, ultimately, less income." Exercise care and judgment in determining what and where to cut and by how much. I recently heard of companies getting rid of their marketing department, asking them to leave, but this is not the best solution, as marketing is the most important function in a business, without having to move your products and service, how is it possible to increase sales and profits. On the contrary, there are some easier ways that would help you eliminate costs without having you to hire an accounting firm. 2.2 Eliminate waste Over the years we have looked at hundreds of marketing programs, and honestly state that nearly all of them have some kind of hole that either drains money directly or allows leads to be lost. On deciding which costs to cut, take a good hard look at what you're doing. Are there programs that aren't delivering the results you anticipated Try Fixing them or it goes to the recycle bin. Is there anything that can't be traced to increasing sales opportunities Unless you have a pile of extra money, now is not the time to be spending money on marketing efforts that don't generate more leads or develop the ones you have. 2.3 Make fewer mistakes Another way to say this is: turn to people who know what they're doing. Marketing - which has never been exactly simple - has changed a lot in the past few years. Customers and prospects are in charge now, and they're looking for you online. If you're not on the internet, you're not in the game. While I admire business owners who try to figure marketing by themselves, it wastes a lot of time and it leads to mistakes that could be avoided with some experience. You may not need a proven marketing professional on staff, but if you don't have one somewhere on your team you're probably wasting money. Here again, its common that a company fires the Marketing staff first, without thinking that we need to set up a new marketing plan, a plan to face the difficult customers. 2.4 Nurture what you've got Successful lead generation programs bring in people in different stages of the buying process. Some are ready to commit more to you than others are. Some are ready to talk to a sales person and some aren't. Think of any lead generation activity you've ever done: search marketing, email, advertising, telemarketing, networking, trade shows - it doesn't matter. Were all of the people who responded ready to schedule a two-hour demo of your product There will be a positive response. But that doesn't make those people any less likely to buy from you in the future as long as you maintain a relationship with them. If you're one of those businesses that has a bunch of inactive prospects sitting in a database (or on your desk), you may be better off nurturing those people than paying to find new ones. And nurturing leads can be a lot less expensive than generating them in the first place. 2.5 Consider outsourcing To have a successful marketing program today requires skills in multiple disciplines - some of which didn't even exist a decade or so ago. For example, you need website strategy and development, search engine optimization, paid search marketing, prospect conversion optimization, lead nurturing and web marketing - just to name a few. Staffing an in-house team with all of this expertise would cost more than most small to mid-sized businesses are willing or able to invest. Yet you can easily - and cost effectively - get this expertise from an outside firm or group of individuals. It's worth looking into when the need arises. Jumping Boundaries and looking beyond: It's typical for the vast majority of small businesses to be local not only in location but in marketing focus. In hard times, looking beyond the regular boundaries of your business is good business. This means extending its value chain to suppliers, partners and customers in a seamless manner The biggest opportunity here is international trade. Move your products to another territory; sell the excess to the closest market. Some of the SMEs will not have enough sources to move internationally, the easiest and less complex process would be to target the next state, or district near you. Ideally you hear of companies moving their sales team to the closest states and you will see miraculous results. For instance during times of the U.S. dollar being devalued in markets around the globe, smart business owners have realized the growing demand for American goods and services. 2.6 Use Low Budget Marketing When recessions and other difficult times hit, the marketing function of a business is the first to get cut. With less advertising and marketing, the funnel of incoming prospects is reduced creating even more revenue decreases and setting up a vicious cycle. The key is to look at your marketing dollars as an investment not an expense. Use the customer knowledge that you have and implement SMART marketing during these times of financial distress. SMART marketing consists of the following S - Strategize M - Maintain market spend A - Assess and allocate the budget R - Research your customer thoroughly T - Target and reach out to them The secret to creating a high-impact marketing plan is to optimize your limited budget. A one-time radio ad blitz, glossy brochure, or flash-enabled website will quickly erode your budget and derail your marketing plans. Use low-budget marketing to get your message out to your customers on a regular basis, and watch sales revenue grow. Low-budget high-impact marketing includes tactics such as finding the right target, PR, networking, public speaking, and more which is explained in depth below: Find The Right Target A critical part of your marketing plan is targeting the right customer. For a low-budget high-impact marketing plan to work, find customers who are easy to identify and affordable to reach. Forget the mass market and go for small niche markets. For example, local, large breed dog enthusiasts can be reached by clubs, special shows, and targeted publications. Reaching all dog owners will be ineffective because of limited exposure combined with higher costs of marketing in mass publications. Public Relations (PR) PR not only strengthens your company image and perception but it is an Economical way to reach your target audience in masses Stimulates awareness of, and the demand for your company's products or services. We never want to think that a crisis can hit our businesses, but it can. Anticipate it, be prepared. Don't wait until the last minute. The final and most important task here is to prioritize Your Audiences and Cater the Message that includes externally as well as internally. You must address both audiences with specific information regarding the crisis and the plan of action that is being put into place. For instance when you know you have a good story but you may not have the capital to get the word out, Electronic PR can come to aid and it such a tactful way of getting your companies performance, quarterly reports, new product launches. Try making a database of all the media contacts and send them what press needs to be released; it will then be decided by the media. In this way, at least some information gets out to the target audience for free. Network at events Go to Chamber of Commerce meetings, BNI Group meetings, and other organizational meetings that will be attracting your "ideal" client. Gather business cards. Get as many as you can and then begin to phone and email to follow up. There are so many social gatherings, for instance, the cultural club you often go, any exhibitions, where you don't invest a dime, these are easiest ways to network. Making Social Networking as a part of your business is the biggest and doesn't need much. It's the fiber woven into every business to showcase business expertise, develop relationship, gain clients and customers trust locally or globally. Social Networking takes your business beyond your wildest expectations and can launch your company to a new level if you take time to nurture your networking group. You need to be proactive in your networking approach, to get to know other people and they will in turn pay attention to what you do or have to offer. Attend public meetings Marketing is essentially a trust building game. Few things build trust more efficiently than getting in front of a group of potential customers and sharing your expertise in an educational setting. Go propose to conduct a hot sounding workshop for your business. Check local libraries, chambers, and associations for opportunities. Look in your local business papers and see what groups have speakers listed in calendars of events. At every public meeting, make a commitment to say something that could be useful to those that are attending. This is a great way to not only share you knowledge and help others, but it also puts you in the eye of those who could use your services. Create a "useful" handout. A handout that when given to a recipient they keep because it has value. For example "Easy installation of a software", "Nutritional benefits of your company's health drink", the vision, mission, company's brochures. Make sure that you include your name, phone number, email address, website information and your 30 second commercial that tells the recipient about your business. Free Press and local newspapers Even as newspapers struggle to survive against burgeoning digital media, local newspapers are still a valuable part of the communities they serve. . A mention of your company in the right media can help deliver your marketing message in a low cost manner. An option is your community weekly newspaper, whose rates typically are a fraction of the local daily. From small towns to large cities, scores of these papers have sprung up over the years and attracted a devoted following in their communities. Being smaller, they would make your advertisement stand out more than it would in the crowded environment of a daily newspaper. Fix the marketing gaps In every way, shape, and form that your business comes into contact with your prospects and customers it is performing a marketing function - good or bad. You must look at all of your customer touch points and turn them into positive, brand-building opportunities. Tear down the lead generations touches, sales touches, service touches, delivery touches, follow-up touches, transaction touches, and billing touches and make sure that every single one of them is a performing a killer marketing function for your business. 2.7 Internet marketing Internet, the greatest invention of all times can play an important role in reaching out to your prospective customers, in showcasing your products and services through the World Wide Web. You need to set specific marketing goals for your company and identify the consumers (or market) that you wish to target. With internet, you can use the web marketing tools for promoting your website and achieving your goals. Figure 1: Forecast of PC, Online, and Broadband Households in the United States Figure 1 is statistics extracted from the Technology Futures, Inc and it highlights their current forecast for the percentage of U.S. personal computers (PCs) and online households. The forecast for PCs include network PCs and Internet Televisions capable of supporting multimedia. The online forecast governs the potential market for broadband services. Online households currently comprise over 50% of all households and are forecast to approach 75% by 2004. Web marketing tools includes social community websites, website syndication tools, gadgets, and RSS feeds that are easy to use and are often free. They will generate new leads and drive traffic to your website. Social networking sites are Facebook, Orkut and My space are very popular with the users these days. You can create a community page about your company, products and services and regularly update it with fresh content so that prospective and current customers can stay in touch. You can also syndicate your web site or blog with an RSS feed. This will also help in keeping your users updated without having them visit your website. These feeds can also be hosted on social community websites, community tool bar, and personalized start pages. Through your website, you must give your visitors the opportunity of providing a feedback about your site, your products and services so that you can make changes accordingly. You can conduct online surveys to find out whether you are fulfilling the requirements of your customers or not. Other cost-effective methods for online marketing include sponsored links campaign and the use of b2b portals for advertising.B2B (business-to-business) portals have also emerged as viable option of promoting and doing business in a much cheaper and effective way. Business to business portals facilitate in establishing new business relationship and retaining the existing ones, which is also termed as e-marketplace. They serve as a platform for the wholesalers, distributors, suppliers, manufacturers and retailers for carrying out their business via online. Today, online marketing through B2B portals has become an essential tool for both the buyers and sellers. In fact, a survey report says that B2B portals can deliver a bountiful of ROI (return on investment) in a matter of months. It is a fact accepted by millions that each and every company from any corner of this globe can use the effective medium in order to increase their business sales. Another aspect is the safety and security of B2B marketplaces. Several recent studies have opined that B2B portals are perhaps the safest mode of getting the right buyer even if he is operating thousands of miles away. The other two internet marketing approaches which are easy to adopt right away and an SME is wasting its time and resources and its customers which is: Electronic Newsletters One of the most effective follow-up marketing tools available is the humble newsletter. Electronic newsletters are much like paper-based newsletters in that they inform, entertain, and make product or service recommendations. The difference is that you can send an electronic newsletter instantly to thousands of people with the simple push of a button for almost no cost whatsoever. It's truly amazing. You definitely need customers to send your newsletter to so you should start collecting the email addresses of your prospects and customers today. A surefire way to persuade a prospect to share their personal email address with you is to offer them a low cost premium such as a free report that describes insider information, which coincides with the product or service you are selling. The key to making electronic newsletters work is to write, in a personal voice, as though you were talking to your prospect or customer face-to-face. Also, provide interesting and useful content so that your reader looks forward to receiving your newsletter. Be consistent. Send your newsletter on a bi-weekly basis, such as the 1st and 15th of every month. Joint Email Endorsed Mailings Simply partner with another local vendor whose services you trust and would recommend and suggest a joint-email endorsed mailing. You send an email endorsing your partner's services with a link to her site and she sends an email to her customer base endorsing your services with a link to your site. Choose partners whose customers would benefit and potentially purchase your product and service. In email marketing, as well as direct post mail marketing, the list determines, in large part, the success of the offer. All it takes is a little creativity and effort to draw attention and visitors to your website. Of course you could just spend a lot of money and advertise your website address but the most successful, low cost, alternatives to drawing traffic to your website are joint ventures with local business people who also have a web presence. In fact, it doesn't even have to be with local businesses. Local high schools and churches are always looking for different fundraising and promotional activities. Some of these strategies are easier than others and produce better results than others, but they all are viable and absolutely doable. Your website can be a powerful marketing tool. Now that you've made an investment in your website, you might as well get the most out it. 2.8 Maintaining Customer Loyalty One area to easily neglect during crisis management of during a recession is customer retention and loyalty. Yet, customer loyalty can ultimately save your business. With reduced staff and a greater focus on the bottom line, how can you build greater customer loyalty Consider the following: Find Touch Points Your business has a range of touch points during the entire sales process and customer service cycle. Determine the vital points of contact for your customer. Find what is most important to your target market through conversations and surveys. Is it after sales support or product selection help Understanding your touch points can help increase loyalty. Focus on Your Top Customers Not all customers are created equal. Certainly, everybody is looking for a good deal during an economic slowdown but your most important customers will spend more, provide better profitability and have a greater propensity for loyalty. Put more of your customer service dollars into your best clients. Re-invent the Customer Experience The ways you are servicing your customers may be costly and outdated. Employ technology to help customers find answers fast and reduce costs. For instance, your customers highly value the setup following the purchase of your product. While you lack the resources to have staff service this touch point, consider alternatives such as building an extensive FAQ section on your website or creating an online forum where your customers can help each other. Implement a customer loyalty program: Why not have an online customer loyalty program: recent reports indicate that e-commerce sites are turning over as much as 60 percent of their customer's every six weeks. NFO interactive, an online research company surveyed a representative sample of 1,905 online customers and determined that 53 percent of all online consumers would buy more online if reward points or incentives were offered. Every business should have a customer loyalty program. Because it costs five times as much money to find a new customer than it does to get a current customer to come back and do business with you. For example, create a "frequent purchase" card and give it to every person that buys from you. A card that after every four purchases, the fifth one comes absolutely free. Change your current system: Try to bring in a new system. For instance, we don't live in a cash society anymore. Increase ways customers can pay you. Pay a merchant fee if you take credit cards, and you'll find the small fee is worth it because so many people like to pay this way. 2.9 Connect With Peers Hard times in the form of recessions or industry shakeouts impact more than just your business. Entire sectors of the market place can feel the heat. One useful approach to survive is applying the wisdom of crowds. A term coined by James Surowiecki in his bestselling book "The Wisdom of Crowds", asserts that large groups of people are smarter than an elite few, no matter how brilliant. Groups are better at solving problems, fostering innovation, coming to wise decisions, even anticipating situations and have immediate solutions. Using the crowd wisdom philosophy your business can connect with industry trade groups or professional peer groups to extract the knowledge and best practices applied during a business slump. To connect with peers, all you have to do is attend all the seminars, press conferences relating to your business, sometimes not related. Try attending the economic crisis forums; get more to know the market, information from the experts. Get two of your best customers to help conduct peer2peer seminars to discuss best practices and issues with peers you invite. 2.10 Maximize Referrals Referral marketing reduces your sales expenses and sales cycle. With less time calling cold prospects, your small business can focus on customers and their circle of influence. Referrals can build your level of satisfied customers. The cycle self-perpetuates with more satisfied customers referring others to your company. Referrals increase your sales revenue. The most cost-effective method of reaching new customers is by referrals from satisfied customers. A satisfied customer telling others about your small business is more effective than any fancy ad campaign. Spend time to get customer referrals on a weekly basis. Source: Daryl T. Logullo. "Maximum Referrals" Figure 2: Referral marketing mechanism The Figure above represents different sorting and filtering approaches to build and track your referral sources in a systematic manner. Use this road map for your small and medium businesses and will certainly lead to automatic building of your database. It will help you realize that you need to reach out and collect information you may not yet have. In categorizing the source or relationship of each contact, you may notice which spheres you are how they are closely interconnected, where you can build alliances, natural areas to best spend your time, groups or people you are unintentionally ignoring, customers who are your best advocates. Using this chart, you will uncover more effective strategic approaches to building your referral streams. Evidently, it clearly defines a Systematic network and there is no line between your personal, social or private life and business. According to world-renowned sales trainer, Tom Hopkins, in "Sales Prospecting for Dummies"; your closing ratio for non-qualified leads is 10 percent versus a 60 percent close ratio with referred leads. Three simple steps to get current customers of acquiring new customers are as follows: Keep Your Current Customers Satisfied Customers will obviously give referrals only for business people whom they trust. Keeping this in mind, do your best therefore to do a great job that will keep your existing customers satisfied. Ensure that your product or service fulfils what you claim it to. Customers are always looking for a good deal. When they are satisfied with what you offer them, they will be eager to tell others about you. Now who will be ready to purchase from when faced with an option A faceless entrepreneur you come across online or one that a friend of neighbor referred Deliver More Than You Promised One sure way of keeping your customers satisfied and making an indelible impression on them is by delivering more than you promised. Build value into your offers. Offer more bonuses. Strike a favorable poise. Deliver customers' products ahead of time etc. The more you're able to impress your customers in your business relations, the more they will be ready to give referrals for you. Stay in Touch Another way of getting referrals is by keeping in touch with your current customers. Develop a system of always contacting your customers. Offer good customer support system. Follow up on those who have purchase your products. Know how they are faring with your products - how the products have helped them solve their pains. Ask how you can be of further help. Always strive to aim at establishing a better, deeper and longer lasting relationship with your customers. As you do this, your customers will appreciate your good gesture and being satisfied they will be referring you to others any day. 2.11 SWOT Analysis The SWOT analysis is probably the first step in putting together a marketing plan or business plan for your product/business. SWOT Analysis is a strategic method for identifying your small business' Strengths and Weaknesses, and to examine the Opportunities and Threats in the wider environment (market, industry, global situation). Strengths and weaknesses focus on your business to look internally to what your business can do. Many businesses are great at looking inward but fail to look outside their company. Threats and opportunities are external; focusing on the conditions of the real-world. This is where a SWOT analysis is helpful. It challenges you to see beyond your company walls to determine what opportunities are open for your company and how to capitalize on your strengths. While most of your analysis will be subjective, the SWOT can provide multiple benefits to your small business. These benefits can include: A clear insight into where your business can focus to grow. To understand the industry structure by using a SWOT in your business plan. And focus your advertising and marketing on areas that give you a competitive advantage in the marketplace. Finally, the foresight to see looming threats and react proactively. To develop your own SWOT analysis, consider each section realistically and be specific. Your customers will know you in the marketplace for certain attributes or things that make them say, "Excellent or WOW". Don't forget the complaints of late delivery or customer issues. The Figure 3 in the next page is a perfect example of a SWOT analysis of marketing a small and medium business. The SWOT analysis is a quick and simple tool to understand the overall big picture. If you have a marketing personnel to analyze this, it is very useful to face any sort of financial crisis. It is the starting point of strategic planning. The most important take-away from this exercise is to apply this knowledge to your small business. Take all necessary actions to reduce the threats to your company and position yourself to take advantage of the opportunities. Figure 3: An Example of a SWOT Analysis. 3.0 Conclusion The key most important task to remember when running the operations of a small and medium enterprise is to avoid and protect yourself from your firm being running into stressful situations especially the economic crisis. It doesn't mean you won't face it, but at least if you do you will be prepared. In retrospect, a marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage and it should only be centered on the key concept that customer satisfaction is the main goal. Nonetheless, developing a marketing strategy without efforts to attract customers is likely to be haphazard and inefficient. The essence of marketing is to understand your customers' needs and develop a plan that surrounds those needs. Also keep in mind that an aggressive marketing strategy doesn't have to be costly however it does need to be different or creative. It comes from truly understanding the needs of clients are more than the competition and your firm should have a thorough understanding of how to effectively and efficiently communicate with potential clients. "Marketing is not an event, but a processIt has a beginning, a middle, but never an end, for it is a process. You improve it, perfect it, change it, even pause it. But you never stop it completely" (Jay Conrad Levinson) 4.0 Works cited Carosso Vincent, P. Bruchey Weems, Stuart. (1979) The Survival of Small Business. New York. Ayer Co Pub, Arno Press. Sindell Kathleen. (2000) Loyalty marketing for the internet Age. Chicago. Dearborn Financial Publishing. Reitman, Jerry I. (Ed). (1996). The future of direct marketing. Lincolnwood. McMurtry Jeanette, M. (2003), Big business marketing for small business budgets. New York. McGraw-Hill Web resources How to use your Local Newspaper to Market your Business (1999-2009). The AllBusiness.com. [Internet]. San Francisco. Copyright 1999 - 2009 AllBusiness.com, Inc. Available from :< http://www.allbusiness.com/marketing-advertising/marketing-advertising-channels/11815476-1.html> [Accessed 25 April 2009] Relationship marketing. (2008). TNS Marketing, Marketing for small businesses and entrepreneurs. [Internet]. Bloomfield NJ. (c) TNS Marketing 2008. 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