Marketing It’s about Knowing Your Customer

1. MarketingIt’s about Knowing Your Customer Paul Tilley College of the North Atlantic Clarenville Campus

2. About Me… Paul Tilley MBA • 22 years experience teaching business / Marketing • Graduated Memorial University with Arts and Business Degrees • Business Admin (Marketing) at College of the North Atlantic • Consultant & Community Volunteer • Serve/Served on several Boards including chairing the Discovery Regional Development Board • Emerging Media Guru - Local TV Producer , Web Editor, Facebooker, Blogger etc…. • Clarenville Town Council 2005-2009

3. Here’s what we’re going to answer today... • What is Marketing? and what is Advertising? • What influences marketing? • How can we market effectively to develop our firm and our industry? • How can we meet the needs of customer organizations through marketing? • What tools can we use to better assess ourselves and our environment, including our competitors, to better satisfy our customer needs? • How can we develop a good Advertising Strategy to best market our products and services?

4. So What is Marketing Anyway?

5. Definition of Marketing Marketing is not Selling! Marketing is: • A Process of Planning and Doing… • The Conception (Product), the Pricing, The Promotion and the Distribution (Place)… • Of an Idea, Good or Service… • To create and Exchange.. • To satisfy Individual or Organizational Objectives.

6. For Marketing to Occur there needs to be: • Two or more parties (a Buyer & a Seller) that have needs that each other can fulfil. • A Desire, and an Ability to satisfy these needs. (A Market) • A way to Communicate this desire to the other party. • Something of value to Exchange.

7. So What is the difference between Advertising and Marketing?

8. Advertising is... • Advertising is just a component of marketing – it helps fulfil the need to communicate with the potential customer – so that marketing can occur. • Strictly defined, Advertising is any direct paid form of mass communication about a product or service or idea by some identified sponsor.

9. Advertising is aboutSpeakingto your customer Marketing is aboutListening to your customer and responding to its needs!

10. Using Marketing effectively to develop your firm and your industry

11. Effective Marketing is all about finding a need… • Sometimes satisfying a need proves to be a difficult task. • To narrow in on the needs of a diverse group of potential customers, companies often group people/organizations by their needs. These groups are known as Target Markets. • Target Markets will respond similarly to a given set of marketing actions.

12. The Marketing Mix“The 4 P’s” • As a firm, we need to ask, “What can we control (change) , in order to meet the needs of our customer?” • We can control (change): • The Product ( The Good, Service or Idea sold) • The Promotion of the product ( How the product is communicated to the potential buyer) • The Price of the product (The rate of exchange) • The Place ( How/where the product is delivered to the customer)

13. How can we use Marketing to Satisfy the Needs of an organization?

14. Organizational Markets Defined • Organizational Markets are: • Organizations that buy products and services • for either their own use • or to use in a product that they make; • or to resell to individuals, or other organizations; • or to provide a public good. • To meet the needs of Organizational markets we must strive to understand their key characteristics.

15. Characteristics of Organizational Buyers (1) • Demand for their products by other organizations is derived from consumer demand for end products. • E.g Exxon-Mobil will produce more oil from more challenging sources (Grand Banks) if consumers demand more oil and are willing to pay for it.

16. Characteristics of Organizational Buyers (2) • There are fewer organizational buyers than there are end consumer buyers. • E.g. There are 30 million people in Canada -- all potential buyers. However there are fewer organizations in the marketplace -- fewer organizational buyers.

17. Characteristics of Organizational Buyers (3) • The buying objectives of organizations are very rational and specific. • The normal objective is to reduce cost while maximizing profit. • E.g. The oil companies specifications are clearly spelled out.

18. Characteristics of Organizational Buyers (4) • The Buying Criteria is very well known and adhered to by organizations. • Operates within the minimum cost/maximum revenue framework. • Common criteria include, • Price • Quality • delivery time • technical capability • warranties • past performance • production facilities & capacity

19. Characteristics of Organizational Buyers (5) • The Size of the order that organizational buyers make is usually large. • Hibernia buys 500 pairs of shoes from Terra Shoes. • You (a consumer) buy only one pair

20. Characteristics of Organizational Buyers (6) • The Buyer and Seller usually are involved in extensive negotiations before doing a deal. • There must be a good relationship between the two parties. • Often there is a reciprocal relationship where a buyer buys from a supplier and in return sells to that supplier. This is known a Reciprocity.

21. Characteristics of Organizational Buyers (7) • Often times in large organizations there is a specific department responsible for all of the organizations purchases. This is the Purchasing department • Impacting the Purchasing department’s decisions: • Users- use the product being purchased • Influencers - affect the buying decision in some way • Buyers -have the formal authority to buy products on behalf of the organization. • Deciders - formal & informal authority to approve purchases • Gatekeepers - may have no formal authority but control the flow of information.

22. Basic Types of Organizational Buying Situations • New buy • A first time buy - a great deal of analysis involved in the decision - a great deal of risk too. • Modified rebuy • A slight modification is made to what otherwise would be a standard rebuy. More analysis involved in the decision - medium risk. • Straight rebuy • Same product repurchased from a existing supplier - little effort in decision making - often an automatic decision - very limited risk. Increasing Complexity

23. Keys to Effectively Marketing To Organizational Buyers • Understand the buyers/sellers needs and meet them. • Get on the bidders list so that you are eligible to sell to an organization. (see http://www.hebronproject.com/procurement.aspx) • Contact the right people in the Purchasing department who have the authority to buy from you or the power to influence the decision to buy from you. • Provide a quality product and service - keep your promises - Maximize value to the customer.

24. So how can we do a better Job at Marketing to Organizations?How can we help ensure they buy from us? Answer: Develop a Strategy!

25. Strategy • Success does not happen by accident! It involves making a good plan to deal with the environment – this plan is called a Strategy. • Strategy involves the planning and the execution of the planning. • Environmental factors cannot be controlled, but they must be recognized and assessed. • Marketing mix factors can be adjusted to move your organization forward in the environment in which it operates. • All organizations need to develop a plan!

26. Strategic Planning • Assess: • #1 - Where are we now in terms of: • Who are our Customers? • What do we do well (Competencies)? • What do we do better than anybody else? (Competitive Advantage) • Who are our Competitors? • #2 - Where do we want to go?

27. Strategic Planning #3 How do we allocate resources to get to where we want to go? #4 How do we convert our plans into action? #5 Once we put the plan into action consider how do our results compare with our plans, and do deviations require new plans of action?

28. As long as you have a good idea that has the potential to make money, people will naturally gravitate to that industry area and set up businesses similar to yours. • By examining your market and determining who is out there now and who will likely be out there in the near future, you can start finding out how much of the total market you will likely claim. Thinking about your Competition

29. Competitors can fall into two broad classifications – • Direct Competitors - sell products and services closest to your own. Direct competitors are relatively easy to identify. • Indirect competitors - may not sell all the same things that you will sell however customers can buy product from them. Indirect competitors are more difficult to toidentify. Thinking about your Competition

30. Thinking about your Competition • A Competitor Analysis Worksheet allows us to evaluate key business unit factors such as Product, Price, Quality, Selection etc. and compare it against your offering. Further, it allows you to put a weighting on that value of that factor in the consumer’s mind.

31. Competitor Analysis Worksheet

32. The SWOT Analysis • Using the information that you have collected in your strategic planning assessment, the next step involves assessing you firm’s relative internal strengths and weaknesses in an environment that is full opportunities and threats. • This Environmental Scan is called a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats)

33. SWOT Analysis (1)

34. SWOT Analysis Template

35. SWOT Analysis (2) • Once you have completed the SWOT, ask: • What is it going to take in terms of time and resources to address identified Weaknesses? (Address the key ones first) • What steps can be taken now to avoid or at least reduce the Threats that could impact my company’s future?

36. VIRO Analysis • Once you have completed the SWOT matrix, ask: • What identified strengths and opportunities are unique and Valuable? (relative to your competitors) • Of these, which of these unique and valuable strengths and opportunities are difficult for other firms to Imitate? • Of these, which unique and valuable strengths and opportunities are Rare? • Having identified these – ask is your firm Organized to take advantage of these Unique, Valuable and Rare opportunities? If not – what do we need to do to take advantage of them? V I R O

37. After completing our SWOT and VIRO analysis we will know what we do well and what we need to do to best meet the needs of our customers. Our Advertising Strategy is developed from this analysis!

38. Advertising is... • Advertising is one key element of the promotional mix. • Advertising is defined as any direct paid form of mass communication about a product or service or idea by some identified sponsor.

39. The Three Stages of Developing an Advertising Program Stage 1 - Plan the advertising effort Stage 2 - Implement the advertising Stage 3 - Evaluate the advertising and its effect on sales.

40. Developing an Advertising Program - Stage 1 • Planning the advertising effort • Target the audience by asking and answering: Who are we selling this to? • Specify the objectives of the advertising effort. • Make sure your objectives are clear and measurable.

41. Developing an Advertising Program - Stage 1 cont... • Planning the advertising effort • Select the advertising budget and determine how to create the budget. • Budgets can be based on a Percentage of Sales, Competitive Parity, All you can afford to spend, or Objective and Task • Create the message, determine the content and how the content should be presented (Develop a “Call to Action” )

42. Developing an Advertising Program - Stage 1 cont... • Planning the advertising effort • Select the right media. Media choice is key to effective advertising. • Be aware of the different types of media as well as advantages and disadvantages of the different media types

44. Developing an Advertising Program - Stage 2 • Implementing the advertising plan • Prior to launching the advertising campaign, you need to pre-test the ads.

45. Developing an Advertising Program - Stage 3 • Evaluating the advertising plan and implementation and the overall effect on sales. • Once the campaign is underway, you need to evaluate the effectiveness of the effort. • Measurability is key – find out if the campaign worked.

46. Here’s where we’ve answered today... • We’ve seen what Marketing is and how it differs from Advertising. • We’ve seen the influences that affect marketing. • We’ve learned how to market more effectively and how to better develop our firm and our industry. • We have learned about the importance of marketing in helping to meet the needs of our customers. • We and been introduced to assessment tools that can be use to better assess ourselves and our environment, including our competitors with the goal to better satisfy customer needs. • We have discussed how to develop a good Advertising Strategy so as to better market our products and services.

47. Questions?

48. THANK YOU! Paul Tilley College of the North Atlantic Clarenville Campus Paul.tilley@cna.nl.ca 709.466.6948