Lesson Proper

Consumer and Business Markets

A. Buying Behaviors and Decision Making if Individual / Household

We will not look at the most important element of the market place the Customers. Marketing's
objective is to affect how customers think about and behave toward the organization and its marketing offers.
We will look first at the consumer buying influences and processes, and then at the buying behavior of
business customers.

Consumer buyer behavior refers to the buying behavior of final consumer‟s individuals and households
who buy goods and services for personal consumption. All of these final consumers combine to make up the
consumer market. The American consumer market consists of more than 300 million people who consume
many trillions of dollars‟ worth of goods and services each year, making it one of the most attractive consumer
markets in the world. The Philippine consumer market consists of more than 50 million people, in comparison.
The world consumer market consists of more than 6.3 billion people (World POPClock, U.S. Census Bureau,
www.census.gov, July 2003).

Consumers around the world vary tremendously in age, income, education level, and tastes, buying an
incredible variety of g0ods and services. How these diverse consumers connect with each other influences their
choices among various products, services, and companies. We will examine the fascinating array of factors
that affect consumer behavior. But first, let's look at a recent development which, to say the least, is interesting
and worth a second and third look-

Etsy is an "online market for the handmade." Individual makers of crocheted blankets and table cloths,
beaded necklaces, unique handcrafted tote bags, embroidered robes and aprons, etc. connect with individual
buyers. Etsy started in 2005 and promoted itself as an economy-shifter, making possible a parallel retail
universe that countered the alienation of mass production with personal connections and unique handcrafted
items. Sellers come

Characteristics Affecting Consumer Behavior

Consumer purchases are influenced strongly by cultural, personal, and Psychological characteristics.
For the most part marketers cannot control such factors, but they must take them into account.

Since Cultural factors exert a broad and deep influence on consumer behavior marketers need to
understand the role played by the buyer 's culture, subculture, and social class.

Culture is the most basic cause of person's wants and behavior; growing up the child learns basic
values, perceptions, wants, and behaviors from the family and other institutions (school, groups, etc.). Every
group or society has a culture, and cultural influences on buying behavior may vary from country to country.

Each culture contains smaller Subcultures, or groups of people with shared value systems based on
common life experiences and situations. Subcultures include nationalities, religions, racial groups, geographic
regions, etc.
 For example, four such important U.S. subculture groups include Hispanic, African-American, Asian,
and mature customers. Asian-Americans, the tastiest-growing and most affluent U.S. demographic segments,
now number more than 12 million. Chinese Americans constitute the largest group, followed by Filipinos,
Japanese, Americans, and so on. As a group, Asian consumers shop frequently and are the most brand-
conscious of all the ethnic groups. (Excerpts from Behind Enemy Lines, James Curis, Marketing May 24,
2001; Mountains to Mine, Christina LeBeau, American Demographics, August 2001)

In the next 20 years, US. diversity will deepen. Those controlling the halls of power in business and
government in the U. S. remain predominantly male and white. This will not persist as our population becomes
more heterogeneous. An increasing diverse leadership will be more successful too. As the pace of change
accelerates, we will face knottily complex problems, and the greater the variety of approaches and experiences
available to tackle them, the better the likelihood of success (Twenty Predictions for the Next 20 Years, Robert
Safian, Wired Magazine, Dec2015/Jan 2016, p. 18).

As the U.S. population ages, mature customers are becoming an attractive market. Now 75 milion
strong the population of U.S. seniors will more than double in the next 25 years. Mature consumers are better
off financially than younger consumer groups. They are an ideal market for restaurants, leisure goods and
services, financial services, health care services. (Watch Me Now', Alison S Wellner, American
Demographics, Oct. 2002)

Almost every society has some form of Social Class structure. Social classes, society's relatively
permanent and ordered divisions whose members share similar values, interests, and behaviors, Social
scientists have identified the following American social classes:

Upper Class – generally the social elite who live on inherited wealth, own more than one home, or
those who have earned higher income or wealth through exceptional ability.

Middle Class – the upper middle class consists of professionals, independent businessmen and
corporate managers; while the middle class are average-pay white-collar and blue-collar workers who live on
the 'better side of town‟

Working class – are those who live a 'working-class' life-style

Lower class – consists of upper lowers who are the working poor, whose standards are just above
poverty. The lower are visibly poor, often unskilled and tend to live a day-to-day existence.

Social Factors
The consumers behavior is also influenced by social factors such as the consumer's family, small
groups, and social roles and status.

Family, the most important consumer buying organization in society, can strongly influence buyer
behavior. Marketers are interested in the roles and influence of the husband, wife, and children on family
purchases. Husband- wife involvement and buying roles change with evolving lifestyles, with 70% of women
with jobs outside the home and many husbands willing to do more of the family purchases, marketers closely
check how this impacts on buying decisions on certain products.
 A person belongs to several small groups clubs, organizations, teams, etc., which may have an
influence in their behavior. Groups introduce expose others to a new behavior, lifestyle, attitudes, and may
influence the person's product and brand choices.

At the same time, the person's position or involvement in the group can be defined in terms of both role
and status

For instance, a housewife in a school/PTA group may become an "influencer because she is considered
an 'expert in managing the household, in the same way that a husband carries some sort of 'status because he is
the team captain/playing coach of his team.

Personal Factors
A buyer's decision also is influenced by personal characteristics such as the buyer's age and life-cycle
stage, occupation, economic situation, lifestyle, and personality and sell concept.

Age and Life-cycle stage

People change the goods and services they buy over their lifetime. Tastes and wants in food, clothes,
recreation, etc, are often age-related. Life-cycle stages refer to singles, newly married couples, couples with
kids, mature couples they have different needs.

A person's occupation affects the goods and services bought. Blue-collar workers tend to buy rugged
work clothes, while executives buy more business suits. Young workers especially in the tech field are
gravitating to more casual wear like jeans, chinos etc.

A person's economic situation will affect product choice. A fast-rising executive will understandably be
looking for a more expensive car. If economic conditions turn bad, marketers will take steps to recalibrate their
efforts.

Lifestyle is a person or family's pattern of living as expressed in his activities (income Source, hobbies,
and social events), interests (food, fashion, family), opinions (about himself/themselves, social issues,
products). People are generally classified into those with high resources as compared to those with low
resources; those spurred by high achievement look for products and services that demonstrate success; and
those motivated by self-expression or their desire for social recognition or variety.

Personality and self-concept

Personality is usually described in terms of traits such as sociability, self-confidence, adaptability,
assertiveness, autonomy, etc. Brands also have "gained" their personality, and consumers are likely to choose
brands that match their own Levi's tend to be strongly associated with 'ruggedness; CNN with competence (in
the Philippines, Rustan's is associated with fashion/quality; Cebu Pacific is associated with budget air travel,
etc.).

Psychological Factors
A person's buying choices or decisions are further influenced by four major psychological factors,
which are: motivation, perception, learning, and beliefs and attitudes.

A person buys something usually to satisfy a need, which is either biological (pertaining to the body,
like thirst, hunger, discomfort), or psychological (arising from want of recognition, esteem, belonging). A
need becomes a Motive when it becomes sufficiently pressing to direct a person to seek satisfaction.
Companies now do motivation research where they collect information from small samples of customers to
probe their inner motives for their choices; they use such techniques as sentence completion, word association,
inkblot, etc., They refer to Maslow's theories about the hierarchy of needs, i.e., people try to satisfy the most
important needs first, with the most pressing to the least pressing being physiological needs, safety needs,
social needs, esteem needs, and self-actualization needs. Using this as an illustration, one who buys a camera
does so probably for a need for self-esteem, or it is for self-actualization (she is a creative person and wants to
express her through photography).

A motivated person who is ready to act may be influenced by his or her perception of the situation. A
perception is the process by which people select, organize, and interpret information to form a meaningful
picture of the world. One can form different perceptions of the same stimulus because of three perceptual
processes

Selective attention is when a person focuses on something and screens out most of the other
information to which he is exposed; Selective distortion describes the tendency of people to interpret
information in a way that supports what they already believe. Because one already has a bias for product X, he
"tunes out a sales person's explanations about the merits of products W and Y; Selective retention happens
when one is likely to remember the good points of product X and forgets the good points about other brands.

When people act, they learn. Learning describes changes in a person's behavior arising from
experience. Theorists say that most human behavior is learned thru the interplay Stimuli, responses,
reinforcements, etc. One's interest in product X is further stimulated when he sees the product display, hears
about a sale price, as well as his friends encouragement. It is further reinforced when he uses the product
repeatedly and likes it.

Through doing and learning people acquire beliefs and attitudes which, in turn, influence their buying
behavior. A belief is a descriptive thought that a person has about something, which may be based on real
knowledge, opinion or faith.

For instance, a person's belief that Cebu Pacific's planes are safe may or may not matter to her. It
marketers think that the general belief are harmful to their product, they launch a Campaign to correct them.
Attitude describes a person's relatively consistent evaluations, feelings and tendencies toward an object or idea,
which put people in a frame of mind of liking or disliking it. Thus, if a person's attitude is to fly safely and
believes that Cebu Pacific's planes are safe, he will be predisposed to fly CebuPac.

The Buyer Decision Process

The buying process starts even before the actual purchase and continues long after. Marketers should
focus on the entire buying process rather than just the purchase decision. The buying decision process consists
of 5 stages: need recognition, information search evaluation of alternatives, purchase decision, and post
purchase behavior.

Need recognition is when the buyer recognizes a problem, want or need, which can be triggered by
internal stimuli (hunger, thirst, sex), or by external stimuli (a person wants to rest from work).

Information search may not be needed if the customer already has the info "stored in his brain. It not,
he may undertake the info search thru personal friends (from family, friends), commercial sources (ads,
displays, salespeople).
 Public sources (mass media, etc.). Experiential sources (product use, handling the product, etc.). A
company must design its marketing mix to make prospects aware of and knowledgeable about the brand.

Evaluating alternatives - consumers do not use a simple and single process in all buying situations. In
some cases, they use careful analysis and logical thinking: some buy on impulse or rely on intuition; others
decide on their own, while some ask friends or consult salespeople and others. Marketers study their target
buyers and try to highlight key product features which will address possible questions or concerns.

In analyzing the purchase decision, the marketer should find out what happens between the purchase
intention and the decision. The buyer may have intended to buy the desired brand, but may form a decision
based on unexpected situational factors such as change in income, expected price (sale offer, bonus points, and
rival‟s pricedrop). As may be seen, preferences and even purchase intentions do not always result in the
desired decision.

Post purchase Behavior – the marketer's job does not end when the product is sold. Will the buyer be
satisfied or dissatisfied with the product? If satisfied, he will probably be a repeat customer. But if not, he will
probably not buy the product again; worse, he may communicate his dissatisfaction to others. Many unhappy
customers do not tell the company about their problem; therefore, it would be wise for a company to measure
customer satisfaction regularly, and even to encourage customers to voice out their concerns so that the
company will know how it is doing and how it can improve. How? Most companies have a customer service
desk or toll-free numbers where buyers can relay their complaints or problems. Feedback must be recorded and
reported so that remedial measures can be taken immediately. Courteous and diplomatic handling of
complaints is a must, of course.

The Decision Process for NEW Products should be studied more carefully as the buying decision
here will be felt in many ways-5ome products catch on or are accepted almost immediately, while others take a
long time to gain acceptance. New buyers are classified as Innovators (venturesome, they try ideas at some
risk); Early adopters (they adopt new ideas early but carefully, usually opinion leaders in their group); the early
majority are deliberate (although they rarely are leaders, they adopt new ideas before the average person); then
comes the late majority who are generally skeptical (they adopt an innovation only after a majority of people
have tried it); last are the laggards who are tradition-bound (they are suspicious of change and embrace the
new thing only when it becomes a tradition itself).

Characteristics that are important in influencing the innovations (or new product's) rate of
adoption:

1. Relative advantage – does the product appear superior to existing ones.

2. Compatibility - does the innovation/product fit the values and experiences of the buyer? Of his
lifestyle?
3. Complexity – products which are easy to understand or manipulate will take less time to be accepted by
the market.
4. Communicability – the degree to which the results of using the product can be described or shown to
others.

Other characteristics influence the rate of adoption such as initial and ongoing costs, risk and
uncertainty, social approval, etc. The new-product marketer must research all these factors, and must closely
monitor the new product and its marketing program.

B. Buying Behaviors and Decision Making of Businesses

 Most large companies sell to other business firms. San Miguel Corporation, CFC Universal Robina
Corporation, Zesto Corporation, etc., sells to SM, Pure Gold, S&R, Robinson's Supermarket, etc, and these
supermarkets sell in turn to smaller retailers that serve the consumer market, as well as to individual buyers.

Business buyer behavior refers to the buying behavior of organizations that buy goods and services
for use in the production of other products and services that are sola, rented or supplied to others.

Examples are Petron, Concepcion Industries/Carrier Aircon, Yokohama Tire sales, Motolite Batteries,
etc., who sells to big companies or to resellers. It also includes the behavior of retail and wholesale companies
firms that acquire goods for the purpose of reselling or renting them to others at a profit.

In the business buying process business buyers determine which products or services their companies
need to purchase, and then find, evaluate and choose among alternative supplier and brands. The business
market is huge and may involve many stages.

For instance, Motolite buys from different suppliers the rubber, chemicals, and equipment it uses to
produce batteries; then it sells the finished batteries to corporate buyers, to Supermarkets and dealers who sell
them to consumers. In short, many sets of business purchases were made for only one consumer purchase.

Business Market Characteristics

Business markets are in some ways similar to consumer markets. Both involve people who assume
buying roles and make purchase decisions to satisfy needs. However, business markets differ in many ways
from consumer markets, mainly in market structure and demand, the nature of the buying unit and the types of
decisions and the decision process involved.

1. Market structure and demand

The business marketer normally deals with fewer but far larger buyers than the consumer marketer.
Although there are millions of final users of car batteries, sales are through corporate buyers, dealers and
resellers who account for most of the purchasing and who, in turn, distribute the batteries to the final
users/buyers. The motorist goes to the gasoline station, not to Petron's head office, to fill up his fuel tank.

2. Nature of the buying unit

A consumer purchase is usually a simple transaction. A business purchase usually involves more
decision participants and a more professional purchasing effort. Often, business buying is done by trained
purchasing agents, and the more complex the purchase the more likely that several people will be involved.
Buying committees made up of technical people and top managers are common in the buying of major goods.
Therefore, business marketers must have well-trained sales people to deal with well-prepared buyers.

3. Types of Decisions and the Decision Process

Business buyers usually face more complex buying decisions. Purchases often involve large sums of
money, complex technical and economic factors, and interactions among many people at many levels or the
buyer's organization. The buying process also tends to be more formalized and therefore it may take longer.
They may call for detailed product specifications, written purchase orders, careful supplier searches, and
formal approval/s. In the business buying process, buyer and seller are often much more dependent on each
other, sometimes they "roll up their sleeves and work closely with each other-partnering to jointly create
solutions to achieve desired targets.
 Before, people wondered why only few Americans were buying energy-efficient LS (compact
fluorescent light bulbs). People did not understand why CFL cost higher than incandescent and many doubted
its light quality. 3 decades after it was introduced, CLS were used in only about 6% of homes. In 2006,
Walmart boldly announced that they will sell 100 million CFLs by the end of 2007. When put to use, these
bulbs will save consumers S3billion in electricity costs. Lighting manufacturers balked and so did Walmart
critics. But the retailer went all-in, redesigning displays, increasing selection, educating customers, and
launching an affordable private-level brand. Walmart made sure that people throughout the country were aware
of the bulbs. The result: Walmart blew past its sales goal: in 2007, it sold 162 million CFLs. Shipments of the
bulbs surpassed 400million, more than double the 2006 total. Walmart's massive purchase of CFLs allowed it
to dictate specs to its supplier. It got manufacturers to reduce the amount of mercury in its CPLs.

Walmart' s action also helped the passage of the Energy Independence & Security Act of 2007 which
ordered the gradual phase-out of inefficient incandescent bulbs by 2015. As manufacturers increased focus on
CFLs prices dropped and quality arose. (Excerpts from "Walmart Turns On the Lights")

Business Buyer Behavior

As with consumer buying the marketing stimuli for business buying starts with the 4 Ps: product, price,
place and promotion. Other stimuli include major forces in the environment: economic, technological,
political, cultural, and competitive. Within the organization, buying activity consists of two parts: the buying
center composed of all the people involved in the buying decision, and the buying-decision process.

The major types of buying situation are the straight rebuy, the modified rebuy, and the new task. In a
straight rebuy, the buyer reorders without any modification, and is handled routinely by the purchasing
department since there are no changes in specs. In a modified rebuy, the buyer wants to modify or change
some product specifications, prices, terms or suppliers. A modified rebuy may be welcome news for the
supplier as this may be an opPortunity to make a better offer; on the other hand, it may also mean some
downward' changes. A company buying a product or service for the first time faces a new task situation, which
is the marketer s greatest opportunity or challenge. The buyer must decide on product specs, price, suppliers,
payment terms, etc., and the decision varies with each situation and different decision participants may be
involved in the process.

The participants in the business buying process may vary depending on the complexity, size, cost,
etc., of the decision involved. They may be called the buying center or the buying/purchasing committee and
the marketer must learn who they are, each participant's relative influence in the decision, what will be their
evaluation criteria, etc. One consultant suggests that "the marketer should rank the individuals in the order of
their importance or impact on the purchase, identify the features/benefits of his product offer so that he can
highlight the important features that the buying committee interested in when he presents his offer. He reminds
that there may be less obvious „informal‟ participants some of whom may actually strongly influence the
decisions. Business buyers are subject to many factors or influences. Some marketers assume buyers favor the
supplier who offers the lowest price or the most service. However, business buyers actually respond to both
economic and personal factors; they react to both reason and emotion. The various groups of influences
include the following:

Environmental factors such as the level of demand, economic outlook, cost of money business, and
the world in general, is worried about shortages in raw materials and dwindling natural resources.

Organizational factors such as the buyer's strategic plans, short, mid- and long term targets, structure
and systems, policies and procedures.
 Interpersonal factors such as the relative impact or influence of some people or group in the buying
process, or effect of people who have special expertise or close relationship with key players. Interpersonal
factors are usually very subtle, so marketers must try to be aware of this.

Individual factors since each participant in the buying process bring in personal perceptions,
preferences and motives. They also have different styles: some may be technical types who prefer in-depth
analysis of alternatives; others may be intuitive negotiators.

Business Buying Process

The Business Buying Process has some similarities with the consumer buying process, but there are
significant differences, for obvious reasons. Buyers in a new-task buying situation usually go through all the
stages, while those in the modified or straight rebuys may skip some of the stages. The eight stages are the
following:

The process starts with Problem recognition when the company recognizes a need of problem that can
be met by acquiring a specific product or service, which may arise from internal and external stimuli.
Internally, the company may want to launch a new product or a machine needs to be replaced or has broken
down, or the company is not satisfied with its present supplier‟s product quality/price/service, or it plans to
adopt a new technolog8y or system. Having recognized a need, the buyer next prepares a general work
description that describes the characteristics and quantity needed. For a complex item, the buyer may have to
consult engineers, consultants, and users to define the item; and may have to rank the importance of reliability,
durability, price, and other attributes. The buying company next prepares the product specifications which
decide the best characteristics or features of the needed item. The buyer now conducts a supplier search to find
the best vendors. Compares sit down with supplier candidates to make sure the latter understands the buyer‟s
needs and requirements. Walmart has a Supplier Development Department that seeks out qualified vendors and
helps them through Walmart's complex buying process in the proposal solicitation stage; the buyer invites
qualified suppliers to submit proposals. When the item is complicated or expensive suppliers are usually
requested to submit detailed written proposals or formal presentations, including warranties, after-service
assurances, delivery and installation schedules, and many other thing. Some buyers ask suppliers to post
performance bonds. In the supplier selection, the members of the buying center or buying committee review
the proposals and select a supplier or suppliers. Buyers may attempt to negotiate for better prices or terms they
may select a single supplier or a few suppliers to allow comparisons of prices and performance over a period of
time. The buying center lists the desired terms and conditions for the purchase. The buyer now prepares an
order-routine specification which includes the final order with the chosen supplier/s and lists items such as
technical specifications, quantity needed, expected delivery date and completion of installation, warranties,
return policies, penalties for non- or late-performance, etc. Then comes performance review during which the
buyer evaluates supplier performance. The buyer asks the users of the product or service to rate their
satisfaction regarding delivery reliability (did the item live up to its "promise"?), etc. The results of the review
may lead the buyer to continue, modify, or drop the arrangement. The supplier, meanwhile, must closely
monitor this to make sure "glitches” if any are corrected immediately, buyer‟s expectations are fulfilled, and
questions/concerns are promptly resolved. Remember, a satisfied customer will probably be a return or a long-
term customer

What's in Store?
Marketers, suppliers, and business in general will always assure their customers that they will deliver
improved products and services.
 For instance, a large logistics company, states in their ad that they "help enterprise class customers
make their fleets safer, more efficient and more productive every day and that tor one customer they have
reduced major accidents by __% saved $_____ in equipment costs, reduced monthly fuel costs by $-- On the
other hand, Buyers will continue to carefully study these offers to determine who can best help solve their
concerns and problems. Meanwhile, Government will continue to perform its mandate to keep close watch and
guard against unethical practices such as deceptive advertising and pricing

Business Market
Business market in simple words is business to business market where in the products or services of a
particular organization are sold to or purchased by other organization or business. It also happens in support
industries where the products that are manufactured are components required to be assembled into the products
or services offered by some other business organization.

Consumer Market
Consumer market refers to a market where in the seller sells the product for a primary reason of making
profits while buyer buys the products for personal use.

What are the major differences between the two?

In consumer market the purchase might even be made when the products are not required in day to day
activities. But in business market the business has to buy to stay profitable.
The business buyer is sophisticated in terms of the process decision making while on the other hand the
consumer in the consumer market might not be as sophisticated.

The business buyer is an information-seeker, constantly on the lookout for information and advice. On
the other hand, the consumer only searches information when he requires making more decision.

Packaging is important in consumer market while making purchases in the business market as against
the consumer market.

Consumer market products are simplistic while business products are complicated.

Who are the major participants in business buying process?

The major participants in business buying process are:

1) Initiators – are the ones who initiate or recognize the need of a particular product requirement in the
organization for enhancement or to combat depravation.
2) Users – are the ones who are going to use the product or require it for the smooth functioning of their
operations.
3) Influencers – Influencers can be of different levels and the decisions that they influence might differ
from person to person or post to post. These are basically the people who will influence the decision of
which product to buy from where and what suitable price to buy it in.
4) Deciders – they decide or have the authority to decide whether to buy a certain product or not.
5) Approvers – they approve the deciders decision to by usually these people is authorized to do so.
6) Buyers – they are the once who make the actually purchases from other business.

Deepen
Market Segmentation, Market Targeting, and Market Positioning (STP)

One of the most important strategic concepts, contributed by the marketing discipline to business firms
and other types of organizations, is that of market segmentation.

Market Segmentation is a process, in which groups of buyers within a market are divided and profiled
according to a range of variables, which determine the market characteristics and tendencies. The process of
Segmentation is part of a chronological order, which follows on to include Targeting and Positioning

Targeting is the process of identifying the most attractive segments from the segmentation stage,
usually the ones most profitable for the business.

Positioning is the final process, and is the more business-orientated stage, where the business must
assess its competitive advantage and position inset in the consumers‟ minds to be the more attractive option in
these categories.

Segmentation

Segmenting a market has widely been debated over the years as researchers have argued over what
variables to consider when dividing8 the market. Approaches through social, economic and individual factors,
such as brand loyalty, have been considered along with the more widely recognized geographic, physiographic,
demographic and behavioral variables proposed by Philip Kotler.

Segmenting a market therefore, is a process of organizing the market into groups that a business can
gain a competitive advantage in. They must however, avoid over fragmenting the market as the diversity can
make it difficult to profitably serve the smaller markets. The characteristics marketers are looking tor are
measurability, accessibility Sustainability, and actionability.

 Measurability – the understanding of size, purchasing characteristics and value needs of a particular
segment.
 Accessibility – the ability to communicate with the segment in an effective manner,
 Sustainability – the segment is profitable enough to differentiate itself from other segments in the
market and maintains the value the business offers.
 Actionability – the capability of an organization to create a competitive advantage with its offering in
the specific segment of the market.

There are two approaches to segmenting a market – a discovery approach or an analytic approach.
Each approach is appropriate to the type of business and market they are approaching.

At analytic approach is a much more research and data based approach, where two sets of information
are derived and used to segment the market. The two approaches give the business an idea for the future
profitability of a segment, and the tendencies and behaviors it portrays. The first approach gives them an idea
on the future growth of the segment, and whether its investment outcome is worthwhile. This, therefore, will
usually be done in advance. The second approach is more based around the observation of the buying
behaviors of the segment and is more based around primary research.

The discovery approach is more suited to a market with a limited customer base, and the process of
discovering segments is based on interest in the offer or a similar offer the business may be able to provide.
Because of this, a discovery-based approach is a much timelier process by which to determine the profitable
segments. Both approaches can benefit from elements of the other and, in most situations, work well in unison
with each other when determining a profitable and defined segment.

Market-segmentation research and practice has a long history, and the breadth and success of
segmentation applications continues to flourish, with novel and unorthodox profiling applications now
reaching beyond the boundaries of a traditional marketing focus". (Quinn, L., Dibb, S. 2010)

Market-segmentation research has the power to identify the target consumers and organization should
prioritize and target. Market Segmentation can be achieved with 5 steps focusing on the core elements of the
segmentation.

Step 1: Define your target market, trends, and scope of segmentation

It is important to target the target market for the product being sold as consumers that are not within the
target market are variables that do not provide any useful information for your organization. It is important to
try and comprehend why the Customer is within this specific segment. What are their goals or purpose for
being within this market? What are they likely to be chasing within this segment?

By uncovering what the consumers need is the organization can look to satisfy this need and by doing so
better position themselves to approach this market segment. Identifying other products that match the needs of
your consumer is important as well as they will need to be evaluated and analyzed because of the threat they
pose to your specific target market.

It is crucial to ensure that as you understand the target segment that you are also adjusting your company
scope in order to match it with your company objectives and capabilities. If the organization is not satisfying
the consumer need it has identified it will likely fail as consumer needs will not be met.

By specifying geographical limitations, organizations can create a scope that is applicable in their
specific domestic position. Organizations should work to segment areas that are within its areas of operating
capability as segmenting areas that aren't realistically available represents opportunities that will be able to be
utilized either way.

Step 2: Perceptual Mapping and Market Mapping

A market map defines the distribution and value added chain between final users and suppliers which
takes into account the various buying mechanisms found in a market including the part played by influencers
(McDonald, M., Dunbar, 1 2012). Market Mapping is essential to correctly determine the specific market that
should be analyzed and the people who should be segmented. This model aids the identification of target
consumers from Suppliers, Distributors, Retailers, and Final Users. This includes the high potential market
segments and what the size of it is.

Perceptual mapping is especially important as it creates a visual diagram of the range of products being
offered within a segment. Traditionally the perceptual map will consist of 4 headings, the basic elements of
this map incudes Low or High Quality and Low or High Price but these can be changed and altered based on
specific product attributes e-g A soft drink producer may want to evaluate a perceptual map including traits
such as High or Low in Caffeine and High or low in Sugar in their specific market segment. Different
 segments will have different traits and attributes that will need to be evaluated to determine where an
organization will position them. Conceptualizing market segmentation as per formative enhances knowledge of
how marketing frameworks shape marketing (Venter, P, Wright, A, Dibb, S. 2015)

By divulging where competitors are positioned within the market map it is possible to see attractive
segments of the market that may be worthwhile occupying, This is where you can begin to form an idea of
where you will be able to hit the market as you can see which areas of the market are left untouched or not
utilized to its maximum potential.

Step 3: Construct a Model of the market

A market is composed of customers who have spending trends that are different from those of other
people. It is important to identify these trends and how they come into play within your market model.
Transactions made can offer a lot of information about the consumer and it is important that this information is
utilized in order to gain the greatest knowledgeable advantage available to your organization. "1t requires you to
record the key features sought by the market when deciding between competing offers. These are selected from
the actual product and services on offer (what is bought) and from the options Presented by where it can be
bought when it is bought and how (McDonald Dunbar, 2012).

It also includes definitions of the product or service: what it comprises or consists of. By Identifying
characteristics and properties of a purchase as well as decisions which are mad at the time of purchase,
organizations can more accurately gauge the personalities and needs of their consumers.

By identifying these aspects of consumers, consumers will be able to be placed into separate categories
or groups which are easily identifiable (relative to the organization. Consumers which are in categories become
easier to satisfy as it are easier to establish their needs. Wealth, Age, Life Stage, Budget, Socioeconomic
factors, background & job are relative factors that need to be considered when categorizing populations into
groups (Evans, : 2009). It is important to micro segment these consumers into categories which fit with the
organizational scope as these details are significant to the organization. It is imperative to note that when
looking through relative factors, organizations should look to find key Discriminating Features within these
factors to identify which factors will be important for making meaningful differences. "A meaningful difference
occurs when some of the customers within a group would not respond positively to an offer consisting of the
key discriminating features listed for them (McDonald, M., Dunbar, 1. 2012). Appropriate segments can then be
targeted to place differing levels of interest amongst features the product has to offer. Segments can be rated to
signify how well a specific feature will perform within that segment.

Developing a good range of micro segments is essential as it must be representative of the current
market. Once completed this transactional information can assist decision making on selected a micro segment
that is fitting for the organizational scope and purpose

Step 4: Identifying Segments

Consumers at this stage can be examined and observed to reveal key information that drives their
consumerism. After selecting attractive micro segments it is important to think about the Key discriminating
features tor these segments. What needs need to be fulfilled? This question is imperative to selecting the right
segment as the need of the customer is reflected in their Decisive Buying Criteria. "Decisive buying criteria are
the attributes of a purchase that Customers evaluate when choosing between alternative offers". (McDonald, M.,
Dunbar, I. 2012)
 Features of the product must relate to some sort of benefit for the consumer e.g. a feature of a remote
controller is the 'off switch. By switching off the device using a controller instead of manually doing it, time is
saved thus resulting in a benefit.

Once consumer needs and benefits have been thoroughly analyzed and understood, the value the
consumer perceives can be generated and from this prices can be established and value can be assigned to the
features of the product. By having a value assigned with key features for particular segments, needs, prices and
benefits can be more readily and easily calculated thus allowing for a more accurate market segment analysis.
Once the appropriate markets have been analyzed and compared, appropriate segments will be identifiable for
the organization lo pursue

Step 5: Segmenting

Similar micro segments can be grouped as bigger segments if they satisfy the same need, segments must
be comprised of only features that are the almost the same extremely similar.

Consumers can now be grouped via their characteristics to form a segment. These characteristics include
all information that was obtained during steps 1-4 to create specific Segments of consumers that all have the
same kind of needs, wants, and benefits received from the specific product within their segment.

Analyzing competitor intensity within segments and finding attractive segments for your particular
product is crucial to business success because of how competitors may be positioned themselves inside the
market. By ensuring that the organization is within the correct segment, success levels become higher as
companies are more likely to effectively meet consumer demands within the specified segment and in tum
make a higher amount of profit. It is critical that segments are the correct size tor the company‟s capabilities as
segments that are too big or too little will most likely yield negative results.

One all segments are sorted into their respective groups organizations can have a clear look at the
amount of individuals within each formed group and their specific decisive buying criteria and can begin to
make an informed decision on which segment to pursue.

Selecting segments based on Attractiveness

Identify key segments relevant to your organization.

It is important to define the specific criteria that your organization is searching for within consumers in
order to determine how attractive specific segments are for your organization. Each Segment contains different
types of consumers with different needs so it is crucial that your organization chooses the correct segment that
aligns itself with organizational criteria. By choosing the right segment for organization criteria, company
goals and segments align allowing for a higher chance of success within that segment. An overall
attractiveness score is then calculated for each concluding segment based on how well each of them satisfies
your company requirements." (Mcdonald, M. 2008). At this point attractive segments are now clearly visible
and by choosing a segment that is fitting for an organization we can guarantee a higher success rate tor the
specified product.

Different approaches must be taken for different segments in the market. It is important to take into
account other factors that may influence your position when approaching the selected segment. Organizational
competition can be fierce when targeting a segment that is already occupied with several organizations. By this
section of segment selection, company objectives and criteria will align with the specified segment and this can
be used to create a strategic plan for your organization to tackle this specific segment and fulfill corporate
goals.

Marketing Management Concepts

A company must also decide how it will serve targeted customers-how it will differentiate and position
itself in the marketplace. In the Philippines, Max's 1s known for tried chicken, Dunkin Donuts and
KrispyKreme for donuts, McDo and Jollibee for hamburgers, etc. But among them, they offer 'value
propositions (a set of benefits or values it promises to deliver to consumers to satisfy their needs) to
differentiate them from one another. They answer the consumer‟s question.

“Why should I buy your product (or brand) rather than a competitor s?” There are five alternative
concepts, which are:

1. The Production Concept holds that consumers will favor products that are available and highly
affordable; therefore, management must focus on improving production and distribution efficiency. This
may still be useful in 2 types of situations: when demand for the product is high, or when product cost is
too high and improved productivity is needed to bring it down. Remember Henry Ford who perfected the
production of the Model T (even offering it only if black) so its cost could be reduced and more people
could afford it. This idea run the major risk of focusing too narrowly, losing sight of other people wanting
more choices, more features, etc.

2. The Product Concept holds that consumers will favor products that offer the most in quality, performance
and features; therefore, the company must focus on continuous product improvements. Although Max's
Restaurant carefully nurtures its famous chicken (which is still a family favorite up to now), it has added
other goodies' like the Max's bakery products and other offerings to remain a strong player in the Philippine
restaurant industry.

3. The Selling Concept offers the idea that consumers will not buy substantial amounts of its products unless
it undertakes a large-scale selling and promotion effort. This concept is usually adopted with "unsought
goods like insurance, etc. or where the industry is dominated by big or well-established players, or when a
company faces overcapacity. Such strategy carries high risks: it focuses on pushing sales transactions,
hoping that those who are coaxed to buy will like the product or even if they‟re "neutral about the product,
will buy it again.

4. The Marketing Concept focuses in giving the right products for your customers, not the right customer
for the product. The idea is to find out what the customers want, and to make it not the old way when
companies announce "This is what we make. Please buy it!" Below is an illustration of the contrast
between the Selling Concept vs. the Marketing Concept

Of course, in many cases, customers do not (and did not) know what they wanted or even what is possible.
Our great-grandparents probably did not have an idea that one can see, on real-time TV in their living rooms,
battles in foreign lands, as they are happening More "recently", 20 years ago how many of our parents would
have thought to ask for cellphones, DVD players, hand-held GPS systems, or 24-hour internet connections. As
Sony's visionary leader Akio Morita Stated: Our plan is to lead the public with new products rather than ask
them what kinds of products they want. The public does not know what is possible, but we do” And one
executive at 3M remarked: "Our goal is to lead customers where want to go, before they know where they
want to go" (Anthony W. Ulwik, “Turning Customer Input into Innovation, Harvard Business Review, January
2002; cited Marketing: an Introduction, 7h Ed., 2005, Gary Armstrong and Philip Kotler)
5. The Societal Marketing Concept holds that marketing strategy should deliver value to customers in a way
that maintains or improves both the consumer's and the society's well-being It talks often lightened
marketing" wherein the company s marketing decisions should consider consumers' wants, the company's
interests, and the consumer's and society's long-run interests.

In the Phiippines, fastfood outlets and other restaurants now serve brown sugar instead of refined sugar,
and have heeded the call to use paper bags over plastic bags: In the U.S, they're moving away from super-sized
drinks and food Servings, and encourage stores to reduce salt and fat content in their servings. MaDonald's
eliminated polystyrene cartons years ago and now use paper-based packaging and napkins that use recycled
content.

Positioning

Positioning is the final stage in the 'STP process and focuses on how the customer ultimately views your
product or service in comparison to your competitors and is important in gaining a competitive advantage in
the market.

Therefore, customer perceptions have a huge impact on the brands positioning in the market.

There are three types of positioning that are key in positioning the brand to competitive advantage; these
are Functional Positioning, Symbolic Positioning, and Experiential positioning.

Functional Positioning is focused on the aspects of the products or services that can fulfill consumers‟
needs or desires.

Symbolic Positioning is based on the characteristics of the brand that fulfill customers' self-esteem.

Experiential positioning is based around the characteristics of the brands that stimulate the sensory or
emotional connection with the customers.

A combination of the three is key to positioning the brand at a competitive advantage to its immediate
competition. Overall, positioning should provide better value than competitors and communicate this
differentiation in. an effective way to the consumer

Product Positioning is a marketing technique or tool intended to present products in the best possible
light to different target audiences; it aims to make a brand occupy a distinct position, relative to competing
brands, in the mind of the customer.

The book Contemporary Marketing by Louise Boone and David Kurtz states that product positioning
refers to consumers' perceptions of a product's attributes, uses, quality and advantages and disadvantages
relative to competing brands he method is related to market segmentation" in that early step in major marketing
campaigns is to discover the core market most likely to buy a product, or the bulk thereof. Once Segmentation
has defined this group ('active seniors', affluent working women', new migrants) the positioning of the product
consists of creating the message likely to reach this target group Positioning involves symbol and message
manipulation, value differentiation strategies, tailored messaging and others.
 Positioning was first introduced in 1969 by Jack Trout (Industrial Marketing Magazine June 1969), and
then popularized by Al Ries and Jack Trout in their book “Positioning: the Battle for Your Mind” (McGraw-
Hil, 1981, with the 20th Anniversary Edition which came out in 2001.

For many startups and small businesses who do not have adequate resources to do exhaustive
segmentation, market research, testing and evaluation, the positioning of their products is in many cases based
on the opinion ot the business owner with the assistance of family, friends and advisers;-during and after the
product is launched, they observe who buys the products, solicit and receive feedback from the market, and
later on modify how they display the items in the store and effect changes in their labels as well as in their
advertising,

Below is a list of some established product positioning strategies. Entrepreneurs may want to think about
their product in terms of each one of these strategies and see how they compare:

 Benefits. – Focus on a benefit they have that others don't. For example, the unlimited rice" of Chicken
Inasal caught fire when it was first introduced. Many stores also copied the 'unli‟ rice gimmick when
they saw its popularity among customers.

 Against a competitor. - This may focus on the competitor's superiority claim; Good example is Avis
Rental cars who trumpeted "We're #2. We try harder"

 Away from a competitor. – Position the product against other competitors features. Good example is
7-Up, the Lincola.

 Product Attributes. – Highlighting a specific attribute of your product can also be appealing. For
instance, restaurants now nave regional cooking8 in their menus, such as sugba from the Visayas, the
ever-popular Bicol Express", bagnet from the Ilocos region.

 Product Categories. – Lately, products came out with separate categories. For instance there are now
cosmetics, shampoos, and even make-up for Men. Ten years ago, only women bought cosmetics and
make-up products; men went only to barbers, not hairstylists.

 Product Usage. – Liquid cleaners are now labeled as Dishwashing Soap, Hana soap, 1aunary
detergents are "recommended" for handwash vs. for machine-washing

 Focus on Users. Readers who do not have any prior knowledge of certain popular topics are the
targets of the different' x x Books for Dummies

Market researchers, advertisers, manufacturers, etc., have been and will always be on the lookout for
developments and trends in the marketplace hoping and expecting that they can be among the first in the
market to come up with new or improved products that will appeal to certain segments or groups of people,
even going to the extent of narrowing their efforts to identity smaller "sub-sub groups whose anticipated
purchases will justify investing in a new product/market strategy. (With Excerpts from Contemporary
Marketing Louis E. Boone and David L. Kurtz, Thomnson South-Western, 2006; Positioning, The Battle For
Your Mind, 20k Anniversary Edition, Al Ries and Jack Trout, McGraw-Hil, 2001 Inc.com/encyclopedia;
Wikipedia; Otmmarketing.com)
 Lesson Proper

Consumer and Business Markets

C. What makes a good marketing mix?

A typical marketing mix is based on the four Ps:

 Product – the product or service you are selling
 Price – what it will cost the customer
 Place – where you will sell it or how the customer will receive it
 Promotion – what communication techniques you will use to inform the public about your business.

Other factors you must consider when developing your marketing mix will increase the number of Ps to
eight, and add one S. The next P is:
 Positioning – the unique place you hold in customers' minds.
To position your business, ask yourself what is different or unique about you, compared with your
competitors. Do you provide better quality, more product and value for the price, or do you simply fill an
underserved need in the community?
These are some of the ways to position your business. This can also be considered as part of your differential.

The next P is:

 People – those who will work for you, sell your product or deliver your service, and the vendors who
will supply you.

The last two Ps are:

 Profits – what you plan to make, and
 Politics – those laws and regulations that will govern the way you do business.

The S is probably the most important area for continued business with your customers, sometimes
categorised as repeat business, but many companies seem to forget about it. It is:
 Service.

You cannot and certainly will not succeed today without providing excellent customer service.

We discussed earlier how you must know who your customers are, what they need, want and expect,
what you must do to satisfy those needs and wants while exceeding their expectations, and then have a system
in place to resolve any customer complaints easily.

It is even suggested that your customer service should not necessarily be planned just for the customer
"complaint", but that you should have a plan for customer service to be commenced at the first point of contact
with the customer before they actually purchase.

Decide your performance goals

Before you finalize the marketing mix for your business, you must first specify the performance goals
for your business so that the marketing mix can help you achieve them.
 You should already know who your target market is and what niche you want to service; you can
prepare the marketing mix to meet those needs. Ask yourself what financial and other business goals, such as
expansion or increased profit margins, you want to achieve. Then develop the marketing mix with these goals
and objectives in mind.

To ascertain these goals before setting your marketing mix, answer the following nine questions.
2. What does the business want to achieve this year?
3. How much money do we want to make? What profit margin do we want to achieve?
4. Where is the product life cycle and what plans are necessary to compete in this cycle?
5. Who is our target market and where do we fit into their thinking?
6. What time frame have we set for achieving our business and financial goals?
7. What resources do we have to use to develop the marketing mix?
8. Are there any legal ramifications or requirements related to our product or service?
9. Do we have all the required licenses, patents, trademarks and registrations for our product or service?
10. Does our product or service infringe any currently trademarked or registered product or service? If so,
what plans are in place to overcome this obstacle?

Considerations for developing your marketing mix

Consider the following questions for each product or service you offer:
1. Target market selection/market segmentation characteristics
2. Products/programmes/services offered
3. Distribution channels (accessibility and availability)
4. Price (including discounts, incentives and payment terms)
5. Promotions:

 Types of communication
 Techniques:
– Advertising
– Publicity
– Public relations
– Business publications – brochures, flyers
– direct mail
– personal selling
– telemarketing
– networking
– speeches
– community service.

Every product/service, or every different market you serve, should have its own marketing mix.

Marketing action plans

Another easy method you may want to use to help you develop both your marketing mix and your
promotional mix is the marketing action plan, or MAP. It is a map of what you want to achieve and how you
plan to do it.

The headings below will help you develop your MAP. Design one MAP for each goal or strategy.
 Goal: Your goal is a non-specific statement about what you want to achieve.
  Objective: Your objective is a very specific, action-oriented and measured statement of what you will
achieve in a certain time frame.
 Actions: Your actions are the tactics you will use.
 Leader: The leader is the person responsible.

You will notice that the first letters of the above headings also spell out "goal" – just a reminder to keep
you focused.

The promotional mix

The next thing to consider is the promotional mix – the methods you will use to bring your marketing
mix into being.

The promotional mix consists of four elements:

 Advertising: This means paid media placements – the element people are most familiar with.
 Public relations: This includes all publicity efforts. It is sometimes thought that PR is free, but there are
costs in staff time, programme development time, and meeting the media.
 Selling: This includes both face-to-face visits and telephone sales.
 Sales promotion: This has to do with all the ways and means to move your product or service into the
chosen marketplace.

1. Advertising
Advertising is paid media space – in print, on radio or on television. The question you need to ask
yourself is whether or not you have the money to advertise. Media people will tell you that if you don't
advertise, you will not succeed. This is not quite true. Advertising is just one method of communicating about
your business to the public.

If you want to advertise, you need to develop a concurrent theme for the ads that you will place. Keep
this theme in place for a period of time to allow people to become familiar with your offering.

You may also want to consider hiring a professional to create your advertising campaign. Remember,
though, that any campaign must be considered within the context of your marketing plan, with the sole purpose
being to get you more customers. You don't want an agency creating award-winning campaigns that do not sell
your product or service.

Prepare a media schedule

Once you have your ads developed, it is advisable to prepare a monthly, quarterly and annual media
schedule. These are the arrangements for advertising you will make with the media. For example, you may use
just newspaper advertising one month; radio the second and television the third. Your media schedule will
detail where the advertising will appear, when, and at what cost.

Measure the effectiveness of your ads

Whatever and however you advertise, code your ads in such a way that you can measure their
effectiveness. Having ads that do not bring in business is not very effective.
 If you are running multiple ads or using more than one media channel at a time, you need to know
which ads are bringing in the business. This is why you have to code them. If it is a coupon, put a number on
it, relevant to that ad, to indicate the date it appeared and the newspaper it appeared in. If it is a radio or
television ad, have the caller ask for a special person.
There are many ways to track your ads; the above are just a couple of examples. Some of the simpler methods,
including cards, flyers, pamphlets and brochures, are a very effective, inexpensive way of advertising your
product or service.

Be marketing SMART

Like everything else we do in business, we have to set goals when we set about marketing. The best
goals are SMART ones:
Specific: Exactly what do you want to achieve?
Measurable: How will you measure the result?
Achievable: Can you take the necessary actions to make it happen?
Realistic: Don't make a wish list. You must be able to commit to it.
Time bound: What are your deadlines or milestones?

Effective advertising and brand management

The whole organization must be "attuned" to its marketing messages.

 Many talk about this, few do it.
 Be noticed. Because if you aren't, nothing else matters.
 Recognize changes in your brand's progress, because a brand is never still. Its position in the market
changes constantly.
 Market inconsistencies on a brand are sometimes beyond an advertiser's control. So you need to
constantly make changes when needed.
 Be different – not a "me-too" company. All companies – even market leaders – should consider their
difference if they seek dramatic and continued long-term business.
 Great brand management can create massive business growth. It adds (or saves) jobs, grows real
wealth, offers better consumer choice. You should aim for nothing less!

And finally:
 Excite the market. It doesn't deserve to be bored by your messages.
 Be honest with yourself. Remember: if the ads aren't working, it's nobody's fault but yours. Why? Well,
if you're getting great work from your ad agency, and you're turning it down, that's your fault. And if
you're getting inadequate work, and you're still employing them, then that's your fault too.

So remember this acronym:

A – Attuned
B – Be noticed
R – Recognize
I – Inconsistencies
D – Different
G – Growth
E – Excite

Develop the brand, develop the business

 First of all, it doesn't need to cost a lot of money to produce a consistent and well managed brand. It
will, however, involve an amount of time, and planning what is important to the business.

What are the core values of your business?

Try to find what makes the business special. What is the unique selling point (USP)? If possible,
incorporate this into the business name, logo and branding.

The key is to have something that is representative and informative. If, for example, you sell hand
gliders, incorporate this into your logo, either directly or indirectly, so that people relate to what you do
immediately. The goal of a brand image is to ensure that the product is remembered; but, more importantly, it
must be for the right reasons, i.e. for what the business does.

Do you have too many logos?

Some companies use three or more logos. In real terms this means extra costs when it comes to
printing, clothing and website. Also, if the logo differs heavily, people may not recognize the company as a
distinct brand. Reduce the number of logos in order to save money and give the brand a consistent image.

Your house style

Keep records of what fonts, graphics and even copy (words) you use. If a business uses one font in
print and another on the web, it can appear that it is not bothered about its branding. With printing, use a
consistent color scheme; it helps with the brand recognition.

Stick to a consistent brand, and then reap the benefits. These include a great brand presence, better
customer loyalty, and the appearance of a well-managed business.

Your corporate image

It is becoming ever more necessary to have a properly designed corporate image. This image is
fundamental in tying together all the different aspects of a company's marketing strategy. A corporate image
enables the company to build recognition and loyalty with its clients and employees.

The benefit of being recognized through your corporate logo is paramount for increasing your business
bottom line. Customers feel comfortable dealing with an organization that shows a structure in its marketing,
and the logo is a major key to the recognition of the company.

Copywriting

Step into the mind and the shoes of the person reading your copy. Everything you write should be
designed to meet their needs, wishes, desires, hopes, fears and dreams.
Keep it simple. Don't use language or sentence structure any more complicated than you would use in
conversation with someone over dinner.
Benefits, benefits, benefits

You must focus on the benefits of what you are offering, rather than the product or service.

When you buy a new hi-fi, you're probably not interested in how it was made or how many wires it has
(the product); you're interested in how it will sound (the benefit).

If you buy a new chair, you don't really care if it took three years for a man in China to make it (the
product); you're interested in how comfortable it's going to be (the benefit).

So, all of your copy should focus on the benefits.

Remember the magic word – you. By continuing to use the word "you" in your copy, you are forcing
yourself to have a personal conversation with the client or person reading it.

AIDA

Follow this classic rule of copywriting and you can't go far wrong. AIDA stands for:
 Attention
 Interest
 Desire
 Action

All of your copy, whether it's a letter, brochure or email, should follow this simple process. First you
need to get their attention – normally in a headline. Then create some interest. You then need to turn the
interest into a real desire for your product or service.
All of this is useless if the reader does not take action. So make it very clear what action people need to take to
begin a relationship with you.

2. Public Relations

PR is probably the most misunderstood part of the promotional mix. Many people think PR is free, or
at least very inexpensive. This is a mistake. Whenever you see a story about someone or some company, you
can be sure that a great deal of time and effort went into getting that placement.

Another mistake people make about public relations is thinking that just because a press release is sent
in to the newspaper, something will be printed. It is true that many pieces in the newspaper have come from
press releases. But the release needs to have something newsworthy to offer. Editors will not look at self-
serving press releases that are not newsworthy or do not benefit the community.

You should develop a public relations/press release schedule the same way you develop a media
schedule for advertising. Make certain, though, that when you send out the press releases, they contain news,
not just frivolous matter.

Structuring your press release

 Keep the release to two pages at the most. Make sure you identify it as a press release, either across the
top or in the upper right hand corner. On the left side of the page, put the date the release was written, who the
contact person is, and day and evening phone numbers.
Then, come back to the right side of the page and put the date the release must be used by, or type "For
Immediate Release". Next, skip two spaces (your entire release should be double spaced) and put in the title,
underlined.

The next line begins with your geographical location – city/town and county or state. As you start to
write the release, be very specific. Put the who, what, when, where and how in the first one or two paragraphs.
The rest of the release goes from the specific to the general.

Editors will edit your release from the bottom up. So you must get everything that is important for you
to say in the first two paragraphs. If the release continues on to a second page, put "More" at the bottom. At the
end of the release, put three # signs (or, in the US, the number 30) to show the reader the release is finished.

3. Selling

This part of the promotional mix is the sales effort. It can refer to you personally or to your sales staff.
You should plan the number of calls you want your salespeople to make on a daily, weekly or monthly basis.

If you don't have one, create an outline of your sales presentation, as well as the sales forms the staff
are required to complete. Create presentations for the salespeople to use to get the prospects' interest. There are
many methods of doing this in this modern technological era: PowerPoint, podcasts, websites and blogs, to
name but a few.

Telemarketing or telesales and direct mail are other forms of direct selling. If you are going to use these
methods, make sure what you are doing will not turn the customer off your sales pitch. Many telemarketing
companies are turning the market against this method because of the way they do it and, even more, when they
do it.

Remember that only you can decide if a personal sales call is necessary for your business or if
telephone sales or direct mail is more effective.

Sales training

If your staffs are not trained in all aspects of the selling process, you should give strong consideration
to getting them trained.

It has been said that good salespeople are born. While this could be true in many cases, a person can
become one of the best salespeople you have providing they have the right training and follow the aspects of
the training through to closing the sale. If they do this regularly enough they will become successful and be
your best asset in the business.

Anchoring

Anchoring, it means building a strong foundation to help your prospect to change a situation. You'll
find out what motivates that prospective buyer to work with you.

The basis of this technique is: "Today's problems affect performance."

  Today means that you understand the prospect's current situation, and what is happening to them today.
Ask them questions to find out what they are working on.
 The second step is identifying problems surrounding their products or services. This isn't always easy:
sometimes we don't acknowledge the problems we have and can't articulate them.
 The third step is to find out what effect these problems are having on the prospect's business. Are they
affecting the company?
 If so, what are the negative impacts on performance because of these problems – and the
consequences?

Have a look at the following example.

 Today, a uniform retailer has 23 salespeople using Outlook or paper-based contact management.
 The problems related to this are that there's no sharing of sales data, there are no sales reports, and
management can't predict sales volume. Sales people aren't focusing on selling.
 The way it is affecting the business is that revenues fluctuate and there have been no pay increases for
two years.
 Poor performance is the result: sales people aren't learning, new tools to help the selling process are
not being developed, and there's animosity between sales and management.

By anchoring a prospective client, you are more likely to close the sale. You create rapport with the
prospect – it's a good way to get to know them, and a great topic of conversation.

Using this technique also shows you care about the prospective client and their needs.

Listening and creating empathy are key attributes of top salespeople. And, of course, if a prospect is
properly anchored and worth the investment, it is easier to close the sale.
Questions to use when anchoring a sale

To anchor a prospective client such as the uniform retailer mentioned previously, you might ask the
following questions.

Today:
 Tell me about some of the processes you are using. How do they work?
 Why do you have that number of salespeople?
 What sort of things are you doing to improve sales or turnover?

Problem:
 What problems are you having in the company (i.e. with your sales)?
 What management problems are you having personally?
 What management problems are you having as a team?

Affect:
 How are people handling these problems?
 What's the atmosphere like in the company/team?
 How consistent are your sales?
 What's your turnover of people?
Performance:
 How is the performance of the sales team, given these problems?
 With sales being down, how are things affected?
 What sorts of things are helping your sales team perform better?

4. Sales Promotions

Sales promotions are the special programmes you will offer the public to sell more of your product or
service. They are usually time constrained – for example, a coupon that must be used by a certain date.

Sales promotions are also used to move products that tend to be slow sellers, are going out of season, or
are temporarily overstocked.

Service providers often use sales promotions to create new business or entice former clients back into
the business.

Choosing the right sales promotion

Sales promotions take many forms, and you must decide which is best for your business. The most
popular promotions are a discount coupon for your service or a special offer for a particular time period. If you
use either one, make sure the promotion expires at a certain date so that you can track its effectiveness.

Consider which type of sales promotion you can use in your business. You will need to think about
your budget and your target market, and ask: "Can I afford it, and is this going to reach the people I want to
reach?"