An AmericanLaundryNews.com Exclusive
CHICAGO — You may possess all the confidence in the world that yours is a perfect product line with a clearly defined customer base. If that’s the case, you’ll need to figure out how you’re going to get your product into the hands of customers. That’s where the market-analysis section of your business plan comes into play.
You do have a plan, don’t you?
Remember, marketing takes leadership and discipline, and it cannot be done alone; you must orchestrate the approach with others.
Traditional marketing strategy consists of three components:
- Organization — Know the strengths and weaknesses of your firm.
- Competition — Know the same about your competitors.
- Customers — Know who they are, and what they want now and in the future.
ANALYZE THE COMPETITION
A competitor analysis—which I believe is essential and must be shared with all sales components—may be your toughest task.
Look at both your direct and indirect competitors. Take, for example, a well-known restaurant in a busy downtown area. Its direct competitors would be any similarly well-known establishments nearby. Its indirect competitors would be other restaurants, even upscale ones, in the same downtown area. Customers eat lunch just once a day—all these restaurants are fighting for this specific group.
Examine any substitutes. Instead of going out for lunch, some people may opt to bring lunch from home, or skip the meal entirely. These are also factors that a restaurant would need to examine when analyzing a location’s competitive position.
Do not guess at this analytical approach.ASSESS THE MARKETPLACE
Once you’ve identified your direct and indirect rivals, as well as “substitute” competitors, it’s time to gauge your potential fit in the marketplace. Some issues to consider are:
Competitor strengths and weaknesses
- Whether new competitors are entering the marketplace, or existing ones are leaving
- The product or products that your competitors rely on to generate most of their revenue
- Ways to overcome the threat of substitute goods
DEVELOP A MARKETING PROGRAM
After you have truly (not in concept) addressed these areas, you can move on to developing a marketing program, a complete mix consisting of the following:
Product — What are you selling?
- Price — What will you charge?
- Profit — What is your gross-profit structure?
- Place — Where and how will you sell your products?
- Promotion — What special incentives will you use to get people to try your product? Can you afford to advertise?
ESTABLISH A MARKETING PLAN
You’re now ready for the final phase of your analysis — crafting a market development plan.
The information you provide here likely won’t come into play until you have become established and have been running for a few years, but investors will find it helpful to see how you envision your company evolving.
Your market development plan should address such questions as:
Have you involved field personnel and potential customers in your approach?
- Does recent data show the market for your product is growing, and have you really done your homework?
- Do you have a plan for offering new products or line extensions of existing products in the first few years?
- Are there other ways to position your company more competitively?
- Does your marketing plan offer ways to grow overall demand within your industry sector?
- Are you overloading your sales force with such a myriad of products that the complex sale items have become too difficult to manage?
These vital marketing and competitive analyses will likely be the most extensive portion of your business plan. Take the time to thoroughly research your competitors and how the market has behaved in recent years.
A disorganized, unbalanced marketing strategy can ruin even the best of products, simply because your sales team won’t have the time to spread the word and your target customers will never hear of them.
Sgt. Maj. J.P. Henderson, a truly distinguished Marine, was my senior drill instructor when I went through the rigors of Marine Corps Boot Camp at Parris Island, S.C., in 1965-66. We later served together in Vietnam and became the dearest of friends.
I have called him annually on the Marine Corps birthday, Nov. 10, over the past 40 years and we toasted to the Corps and our friendship. As I was writing this column, his wife called to inform me that J.P. had died after a battle with cancer.
Losing this friend, from whom I learned so much, made completing this article a challenge, but I can hear him now, saying, “Finish the job, Marine. Happy hour is right around the corner.”
I dedicate this and all of my columns to this outstanding Marine, whom I will miss greatly.