TRAINING REPORT ON MARKETING STRATEAGY Submitted to
MAHARISHI DAYANAND UNIVERSITY In partial fulfillment of the requirements For the award of the degree of
BACHELOR OF BUSINESS ADMINISTRATION (INDUSTRY INTEGRATED)
Submitted by NAME: DINESH VISHWAKARMA REGN NO. BBA/10/363Use the G00 series ROLL NO. Guru Gram Business School Front of CCA School Dhanwapur road laxman Vihar Gurgaon Haryana 122001
CERTIFICATE This is to certify Dinesh Vishwakarma, a student of the Maharishi Dayanand University, Rohtak, has prepared his training report entitled “Marketing Strategy” at Continental Manufacturing Co. , under the guidance . He has fulfilled the requirement leading to award of the degree of BBA (Industrial Integrated). This report is the record of bonafide training undertaken by him and no part of it has been submitted to any other University or Educational Institution for award of any other degree /diploma/fellowship or similar titled or prizes. I wish him all success in life.
SIGN OF FACALITY GUID NAME OF FACALITY GUID DESIGNATION QUALIFICATION SEAL OF ELC
STUDENT DECLARATION I hereby declare that Training Report conducted at
CONTINEANTAL MANUFACTURING CO. 353, MEHRALI ROAD, OPP. GOVT. COLLAGE, GUEGAON-122001(HARYANA)
Under the guidance of Mrs. Bhavana Submitted in partial fulfillment of the requirement for the degree of
BACHELOR OF BUSINESS ADMINISTRATION (INDUSTRY INTEGRATED) To
MAHARISHI DYNAND UNIVERSITY, ROHTAK Is my original work and the same has not been submitted for the award of any other degree/diploma/fellowship or other similar titled or prizes.
STUDENT SIGNATURE NAME PLACE: DATE: Company certificate
ACKNOWNLEDGEMENT I wish to acknowledge my sincere gratitude to Mr. Pravin Kumar (Marketing manager) for giving me an opportunity to carry out my Training at CONTINENTAL MANUFACTURING CO. Rewari.
I am immensely thanks to Mrs. Bhvana for this guidance and valuable information. It would not have been possible for me for the successful completion of my project on Marketing Strategy without her help.
Above all I offer my heartiest thanks to god almighty for his fullest support and wonderful guidance
CONTENT OF THE REPORT 1)General introduction about the sector. 2)Industry profile i. Origin and development of industry. ii. Growth present status of the industry. iii. Future of the company. 3)– Origin of organization. 4)– Growth development and present status of the organization. 5)– Product and service profile of the company. 6)- profile of the company. 7)– Discussion on training. 8)– Study of selected research problem i. (Problem, objective, methodology) 9) - Summary and conclusion 10)
Appendices
11)
Bibliography
12) 1 GENERAL INTRODUCTION ABOUT SECTOR
2 - INDUSTRY PROFILE I.
Origin and development of the industry
CONTINENTAL MANUFACTURING COMPANY establised in 1990 with the aim to manufacture Precision and High Quality Plastic and Steel metal component. At CMC, we have been serving OEM’s in Gurgaon Fom very bigning and have made good cutomer on base due to our industrial background sonce 1958. We have specialization in manufacturing of deep draw components in seat metal and injection molded plastic part with critical shape and size . A brief count of our achievement and appritiation
given by company’s customer is given below
II.
GROWTH AND PRESENT STATUS OF THE INDUSTRY
There is two axis one shows series 1 in which targets achieved is given in crores. Second axis shows the year I which targets achieved.
III.
FUTURE OF THE INDUSTRY
3. ORIGIN OF ORGANIZATION CONTINENTAL MANUFACTURING COMPANY establised in 1990 with the aim to manufacture Precision and High Quality Plastic and Steel metal component. At CMC, we have been serving OEM’s in Gurgaon Fom very bigning and have made good cutomer on base due to our industrial background sonce 1958. We have specialization in manufacturing of deep draw components in seat metal and injection molded plastic part with critical shape and size . We have two uit & offices they are given below:-
4. GROWTH DEVELOPMENT AND PRESENT STATUS OF THE ORGANIZATION.
5. PRODUCT AND SERVICE PROFILE OF THE COMPANY
6. PROFILE OF ORGNIZATION Organizational structure
cEO
7. DISCUSSION ON TRAINING Marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage
Developing a marketing strategy Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics. Marketing strategy involves careful scanning of the internal and external environments which are summarized in a SWOT analysis. Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints. External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or
political/legal environment likely toimpact success. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement.
Types of strategies Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below: Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are four types of market dominance strategies: Leader Challenger Follower Nicher
Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage. The generic strategy framework (porter 1984) comprises
two alternatives each with two alternative scopes. These are Differentiation and low-cost leadership each with a dimension of Focus-broad or narrow. Product differentiation (broad) Cost leadership (broad) Market segmentation (narrow)
Innovation strategies
- This deals with the firm's rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types:
Pioneers Close followers Late followers
Growth strategies - In this scheme we ask the question, “How should the firm grow?”. There are a number of different ways of answering that question, but the most common gives four answers:
Horizontal integration Vertical integration Diversification Intensification
A more detailed scheme uses the categories[10]: Prospector Analyzer Defender Reactor Marketing warfare strategies - This scheme draws parallels between marketing strategies and military strategies.
M
any architects make the mistake of thinking that
marketing has only a peripheral relationship to what their firm does. In fact, marketing works best when it is totally integrated into the operations of your firm, when it’s a part of everything you do. You can’t create a plan for how to improve your marketing and increase your business without first considering your long-term goals—not just in terms of fee revenue or winning work, but in terms of
who you want to be and where you want to go, both as a firm and as a professional. There are a number of ways strategic planning can help your firm: • _ Build a shared vision for the firm’s future. • _ Articulate your vision so that it can be communicated to others. • _ Get approval and support for the vision from senior leadership and, ultimately, your entire staff. • _ Create a framework for all future decision making. • _ Figure out (and agree on) how much you’re going to spend on marketing and other initiatives to make it happen. The discussion of strategic planning and marketing planning are divided into the following five areas
Strategic Planning Getting to the Starting Line
Strategic planning is the process of developing a vision of who you are as a firm and what your longterm goals are. It’s about more than just marketing; it can influence
everything: human resources, finance, information technology, operations, hiring, promotions strategy, design process, client relationships, the design of your office, and absolutely anything else that affects your firm and its performance. Firms typically engage in strategic planning at defining moments in their practice, when the firm’s leadership changes or when the practice undergoes some kind of profound transformation. The strategic planning process enables the firm’s leadership to build a shared vision for the firm’s future, articulate the vision so that it can be communicated, and create a framework for all future decision making. When you’re ready to engage in strategic planning, it’s important to open your mind as much as possible. Get ready to think big.
Because strategic planning is a process, not a document or a report, it isn’t effective for a small group of leaders to issue a fat document as the strategic plan for the firm. It will probably go unread. It will certainly not achieve approval and support from the people who need to understand it and act on it. Strategic planning is best conducted as an open process, one that involves all your firm’s key leaders. To begin the process, set up a strategic planning meeting, either as a retreat outside the office or as an extended in-house meeting. (You may want to bring in a marketing consultant to help you with this.) Figure out who should be there to give input to the vision for your firm’s future. Keep the group as small as
possible, but don’t leave anyone out. Ask everyone to commit half a day for the meeting (two hours just isn’t enough), and to come relaxed and prepared to focus on the firm’s strategic direction. Give everyone an agenda in advance and ask each person to bring historical data based on his or her area of expertise or interest (financial data, hiring or retention info, win/loss reports, client feedback, etc.). Gather any existing documents that attempt to define the firm or its vision, such as mission statements, a firm description, marketing materials, articles that have been written about the firm, and so on. Plan to spend about half the meeting talking about where you are now (your firm, your markets, your competitors, etc.) and the other half talking about where you’d like to go (your mission, your vision, the action plan).
MARKETS FOR INDUSTRIAL GOODS The market is the place where supply meets demand. Suppliers and customers meet, discuss and evaluate the conditions for exchange of goods and services, and exchanges take place. The conditions under which these
exchanges occur, especially that of price, are influenced by the characteristics and structure of the market, for example, the number and market power of suppliers and customers. Traditional economic analysis of markets presupposes that they are characterized by certain basic features;' firstly, there is an assumption of free movement in the market, and thus a customer will always buy where he obtains the best terms of exchange at that moment; similarly, the assumption is that suppliers will move to and from the market freely.' Thus, the market is portrayed as atomistic. Each unit in the market is free and independent to do as it wishes. Also, as a result of this free movement, the market is characterized by change, and stability is an exception. Underlying these two assumptions is the further assumption that there is little or no cost of transaction. In other words, it is assumed that there are no costs in obtaining accurate information, or in negotiations, etc. One effect of this assumption is that production costs are considered central and that sellers can be simply represented by a production function.
The traditional economic theory of the market has of course been subject to challenge and modification. However, it has influenced the models and principles used in marketing management. The basic model that
most of the literature in marketing is built on is the marketing mix model. The key problems in marketing, according to that model, are:
(a) to allocate resources to different competitive means or mix elements, (b) to design each mean as well as possible within the firm's resource limitations.
The market is often described in terms of response curves, each defined in relation to a certain 'marketing decision variable' or to the whole mix of a company. The assumption is of course that the market consists of many individual customers that are affected by the marketer's variables in accordance with a certain statistical distribution. The same kind of influence can also be identified in the purchasing management literature. The focus here is largely on the management of a single purchase. This does not give full consideration to the factors which have contributed to the way this purchase takes place, or to the effects of this purchase on the subsequent dealings with the supplying company.'
Marketing Management
As we mentioned in the first section of this chapter, the models and principles for industrial marketing management that are given by the literature are normally related to the marketing mix model. The problems identified in these are the allocation of resources and the designing of competitive means. However, marketers in for example, a highly concentrated industry may find different problems. The issues associated with the handling of ten very large customers are of totally different character from those of handling 1,000 small customers. Thus, marketers in firms in concentrated markets have a lack of accurate models for analyzing their marketing problems. They have also a lack of relevant data expressed in a systematic way about the behaviour of other firms in the same situation.
MARKETING ORGANIZATION Overall Organization
Belter's sales operations are split into three areas as follows; (i) Sales Manger — UK responsible for 60—70 per cent of total sales. Four area offices handling all accounts, except two major ones which are managed from the Company's main office.
(ii) Sales Manager — Middle East, Africa, Eastern Europe, accounting for approximately 20 per cent of total sales. One manager plus two sales engineers. The Company is currently building up an agency—distributor network for this territory.
(iii) Sales Manager — Western Europe, responsible for the remaining 20 per cent of total sales. The sales manager is located in Brussels, with additional sales offices in Germany, France, and Italy. The Brussels sales office is owned by Belter's parent group. All major commercial transactions are carried out by Belter's Head Office, although the Brussels. Company does have some price discretion. This European sales company takes 85
per cent of its products for sale in Europe from Belter. The remaining 15 per cent of products are sourced from the North-American parent company. Apart from the European operation, all agents and distributors overseas are handled from the UK.
Evolution of Marketing Organization Belter has often faced problems in the distribution of its products; in France, for example, the Company had a combined agent and distributor operating until 1963. Belter provided applications engineering but had no commercial involvement in sales. The company found that it had no influence on pricing in the market and this led to a rather artificial pricing structure and to a decreased market share. This problem was not solved by the appointment of a second distributor. Mergers amongst French suppliers have led to more competition in the market. The second distributor did little to stimulate the first one or to improve the Company's overall penetration. In 1966 Belter separated out a number of products and major customers which were not to be handled via distributors. These customers and products were to be controlled by the UK sales operation. Also, from 1970, the Brussels office ceased to have overall responsibility for
sales to France and a Paris office was established. The overall market situation faced in France (and in other European countries) is as follows:
There are many actual and potential users for some products, which are not known by the Company. Heavy competition exists especially on price, for large customers who are often buying what they view as a commodity product. Belter's emerging strategy has been to handle these large customers through its own sales offices. The Paris office actively seek sales of large volume products as well as acting as a `post office' for products specially developed for individual customers, which are then handled from the Company's main office. Small customers and small volume products are handled by the two French distributors. The development process in Italy has been similar to that in France. Sales in Scandinavia do not justify a local sales office; sales here are handled through a distributor from the Brussels office.
A small number of major accounts are, however, handled directly from the UK.
BUYER—SELLER RELATIONSHIPS A Customer Relationship in the United Kingdom The three aspects of the relationship which are studied are competition, technical development, and personal contacts.
This customer is Belter's largest and is responsible for 20 per cent of its total business. The Company operates in the aerospace industry at the limit of current technology. The relationship involves considerable development liaison on wholly new products.
Competition Competition for this customer comes primarily from American suppliers. The competition is on price and reflects the spare capacity in the American industry. Competition from UK companies is also on price and comes from companies having a wider production spread than Belter.
Development
This customer has always relied on Belter alone for development work in this product area. However, they have looked to other sources of supply when development has taken place. The development process for a new product can be started either by a government development contract or by an order from the customer. Belter acknowledged that it has to stand the costs of this development in the latter case. The customer has intimate knowledge of all of Belter's procedures. Methods of manufacture are agreed in detail and even the particular production machinery to be used is specified. The closeness of the relationship between the two companies is indicated by the fact that the customer has approved Belter's quality procedure and accepts their testing.
Contact Pattern Interpersonal contacts between Belter and its UK customer are summarized as follows: (1) Formal Contacts Every six months Technical policy liaison meeting, jointly chaired by Belter's Technical Director and the customer's Chief Materials Manager. Every six—nine months Commercial meeting, Belter's Managing and Marketing
Directors and Sales Manager and the customer's Purchasing Director and Senior Purchasing Staff.
Monthly UK Sales Manager visits customer's purchasing staff to discuss delivery and order positions. (2) Other Contacts These can be studied according to the formally assigned responsibility. Personnel who have full-time responsibility One sales office man has daily contact with the customer. Additionally, one applications engineer is engaged on work for this customer. Finally, one man determines market trends, and is in contact with the customer's marketing personnel and customer's clients. Personnel with `half-time' responsibility Four applications engineers also spend some of their time on the customer's problems and are in personal contact with customer staff.
PURPOSE OF A MARKETING PLAN The purpose of a Marketing Plan is to:� Define the Market �Refine the Production Plan to market requirements �Develop a marketing strategy �Minimize risk
Each FFT group should have a Marketing Plan covering each commodity based on their own study of the local market. Defining the Market and Commodities�Market demand and prices -An assessment based on published market information , discussions with local extension staff, farmers, dealers and buyers of the commodity of the likely demand and prices on offer during the year and during any period of seasonal shortfall �Market Requirement- Varieties, size, grading, packaging, maturity demanded by the buyers in the particular market. �Yield /Price Assumptions- How much commodity will be available? How much premium grade? Second grade? Losses? If the commodity /crop is aimed to be produced for a particular period e.g. for a low supply period, while the price assumptions (expectation) may be higher some reassessment of yield and cost of production assumptions in the gross margin analysis or partial budgets is usually necessary. �Marketing Returns and Costs Calculate expected income and costs in marketing
The Most Important Elements of Marketing There are four important elements in the marketing process:
�Prioritising the customer: Marketing begins with the customer, not the product. Knowing what the customer needs or wants is essential. �Process of selection: The farmer needs to know who to sell the product to. This will determine how and where the produce is marketed. �Promotion: The farmer is selling something that other people want to buy. Naturally, it is helpful to let them know that the product is available and of good quality. The Marketing Training Manual 23 Marketing Module 3: Markets and Marketing �Trust: Good marketing occurs when the customers trust the farmer. The customer should feel they are not being cheated and they are getting value for their money.
In thinking about these elements, farmers need to ask themselves about the six Ps: • Ppeople: Who are the customers? What do they want or need? Who is actually going to market the product? • Pplan: How is the product going to reach the selected customers? What are the steps? • product: What product is going to be marketed? Is the family producing what the customer wants? What services (for example, a cooked product), if any, are requested by the customer? • place: Where is the product going to be marketed? • price: What price will the product be offered on the market for? • promotion: How are people going to be informed that the product is available?
Supply, Demand, and Price In a free market, prices for inputs and products are determined by supply and demand.
Supply Is what producers are willing to market at a certain price.
Demand Is how much consumers are prepared to buy at the market price. In theory, as the price of a product goes up, the quantity supplied rises and the quantity demanded falls. Likewise, when the price goes down, the quantity supplied falls and the quantity demanded rises. For agricultural produce, demand is affected by a number of factors, the most The Marketing Training Manual 24 Marketing Module 3: Markets and Marketing
Industrial or business to business (B2B) marketing An organization seeks to build a new warehouse. After documenting requirements, it obtains three proposals from suitable construction firms. After a long process of
evaluation and negotiation, it places an order with the organization that it believes offers the best value for money. An organization needs legal services and obtains submissions from two law firms. Analysis of the proposals and subsequent discussions determines that there is no price advantage to placing all of the work with one firm, and the organization decides to split the work between the two firms based on an evaluation of each firm's capabilities. A sales representative makes an appointment with an organization that employs 22 people. He demonstrates a photocopier/fax/printer to the office administrator. After discussing a proposal, the business owner signs a contract to obtain the machine on a fully-maintained rental and consumables basis, with an upgrade after 2 years.
Main features of the B2B selling process are: Marketing is one-to-one in nature. It is relatively easy for the seller to identify a prospective customers and build a face-to-face relationship. Highly professional and trained people in buying processes are involved. In many cases, two or three decision makers must approve a purchase plan. Often the buying or selling process is complex, and includes many stages (for example, request for proposal, request for tender, selection process, awarding of tender, contract negotiations, and signing of final contract). Selling activities involve long processes of prospecting, qualifying, wooing, making representations, preparing tenders, developing strategies, and contract negotiations.
Blurring between B2B and B2C Industrial marketing can cross the border into consumer marketing. For example, an electronic component seller may distribute its products through industrial marketing channels (see channel (marketing)), but also support consumer sales. Many products are equally desired by business and consumers—such as audio products, furniture, paint, hardware, etc. Nonetheless, manufactures and service providers frequently maintain separate industrial and consumer marketing operations to reflect the different needs of the two channels. Competitive tendering Industrial marketing often involves competitive tendering (see tender, tendering). This is a process where a purchasing organization undertakes to procure goods and services from suitable suppliers. Due to the high value of some purchases (for example buying a new computer system, manufacturing machinery, or outsourcing a maintenance contract) and the complexity of such purchases, the purchasing organization will seek to obtain a number of bids from competing suppliers and choose the best offering. An entire profession (strategic procurement) that includes tertiary training and qualifications has been built around the process of making important purchases. The key requirement in any competitive tender is to ensure that...
The business case for the purchase has been completed and approved. The purchasing organization's objectives for the purchase are clearly defined. The procurement process is agreed upon and it conforms with fiscal guidelines and organisational policies. The selection criteria have been established. A budget has been estimated and the financial resources are available. A buying team (or committee) has been assembled. A specification has been written. A preliminary scan of the market place has determined that enough potential suppliers are available to make the process viable (this can sometimes be achieved using an expression of interest process). It has been clearly established that a competitive tendering process is the best method for meeting the objectives of this purchasing project. If (for example) it was known that there was only one organisation capable of supplying; best to get on with talking to them and negotiating a contract.
Because of the significant value of many purchases, issues of probity arise. Organisations seek to ensure that awarding a contract is based on "best fit" to the agreed criteria, and not bribery, corruption, or incompetence. Bidding process Suppliers who are seeking to win a competitive tender go through a bidding process. At its most primitive, this would consist of evaluating the specification (issued by the purchasing organization), designing a suitable proposal, and working out a price. This is a "primitive" approach because... There is an old saying in industrial marketing; "if the first time you have heard about a tender is when you are invited to submit, then you have already lost it." While flippant, the previous point illustrates a basic requirement for being successful in competitive tendering; it is important to develop a strong relationship with a prospective customer organization well before they have started the formal part of their procurement process.
Non-tender purchasing Not all industrial sales involve competitive tendering. Tender processes are time consuming and expensive, particularly when executed with the aim of ensuring probity. Government agencies are particularly likely to utilise elaborate competitive tendering processes due to the expectation that they should be seen at all times to be responsibly and accountably spending public monies. Private companies are able to avoid the complexity of a fully transparent tender process but are still able to run the procurement process with some rigour.Beneficial Developing a sales strategy/solution selling/technical selling The "art" of technical selling (solution selling) follows a three stage process... Stage 1: Sell the appointment: Never sell over the telephone. The aim of the first contact with a prospective purchaser is to sell the appointment. The reason is simple; industrial sales are complex, any attempt to sell over the phone will trivialise your product or service and
run the risk of not fully understanding the customer's need. Stage 2: Understand their needs: The best method of selling is to minimise the information about your goods or services until you have fully understood your customer's requirements. Stage 3: Develop and propose a solution. The solution is (of course) developed from your (or the firm that you represent's) product or service offerings.
Marketing supports solution selling through methods like account-based marketing—understanding a specific target organization's requirements as the foundation of a marketing program. As research shows,[1] sales success is heavily weighted towards suppliers who understand the customer. In UK research, 77 per cent of senior decisionmakers believe new suppliers' marketing From cannon fodder to preferred tenderer
The term "cannon fodder" derives from the World Wars and refers to the massing of undertrained and recently recruited troops sent to the fronts to face the enemy. Such troops invariably had a poor survival rate but provided the tactical advantage of distracting the enemy while professional soldiers mounted more effective operations. In adopting the term to Industrial Marketing it
means those bids being submitted that have no chance of winning but are involved to make up the numbers (you can't have only one bid in a "competitive" tender process; that wouldn't satisfy the requirements of probity) (for example in government tenders, or for private enterprise the requirement to "truly test the market" and to "keep them honest"). The reader might be wondering why anybody would go to all of the work of submitting a tender when they had no chance of winning; for the same reason that troops were sent in to battle to die; they thought they had a real chance
The key features of a successful industrial sales organisation In industrial marketing the personal selling is still very effective because many products must be customized to suit the requirements of the individual customer. Indicators such as the sales tunnel give information on the expected sales in the near future, the hit rate indicates whether the sales organization is busy with promising sales leads or it is spending too much effort on projects that are eventually lost to the competition or that are abandoned by the prospect.
RESEARCH PROBLEM 1. Identify your target market. Which businesses need cleaning services? Which ones can afford it and will pay for it? Why? In your case, I would think that small businesses may not be your ideal client. But then again, define "small business." Are you referring to sales volume or number of employees. I can tell you right now as a marketing consultant that has worked with a wide variety of businesses, including small companies: " Small businesses are very price sensitive and prefer to do more themselves rather than pay someone else." (They hold this belief even if it would free up more time to be more productive. Go figure?) So before you randomly begin picking a target market, have a rational reason why. Continue to read below and you'll begin to see what I am talking about.
2. Determine their wants and needs. It may be obvious to you, but ask yourself: "Why would someone want a clean office?" These businesses never have walk-in traffic. They do not have customers visit them. So naturally, there is far less of a concern for a "clean office." Sure it would be nice to have, but since no revenue will be lost if their office is not spectacular looking, they are not motivated to do anything about it. However, seek out the businesses that do deal with customers directly, especially professional services where they have very high end clients visit them. Now they NEED a very presentable office or they risk losing out on a lot of revenue.
3. Determine the level and type of demand. If you have ever read any of my previous work, you will know that I am a very strong advocate of knowing whether the type of demand is "Primary Demand" or "Selective Demand." It is one of the most overlooked aspects of marketing being ignored today! Primary Demand: If a business does not already use your TYPE of service and is not currently considering doing so,
you will need to create "primary demand." Simply put, you will have to convince them first to even want your type of service (or product) before you even get them to buy it from you.
So for your cleaning business example, if you are approaching businesses that currently do not use a cleaning service, you will have to explain the time saving and productivity enhancing benefits of using one. Then explain why YOU are the one they need! Selective Demand: These businesses already use a service (or product) or are in the market for it and are actively looking. In these cases you do not need to spend much effort convincing them "why" they need it. In this case, you must state your argument why your cleaning service should be the one they choose. This is what you will encounter when you call on or contact businesses already using a cleaning service. They will either be satisfied or unsatisfied with their current service provider. Your emphasis will have to be on "conquest sales" -- meaning stealing customers from your competition. Now in your line of business and in many others, slashing prices always seems to be the first technique used to
steal customers. This may work well for selling products. But if you are marketing services, let me tell you this...think twice before doing that. Yes, I am fully aware of the fact that there will be businesses that will be open to talking to you if you offer them a better deal. In some cases, they may feel they are legitimately getting "ripped off" or paying way
too much right now. And they just might be right. In those cases, if you can give them a fair price that is a better deal for them AND still gives you healthy profit margins, then go for it. However, if you are slashing prices just to gain clients, aren't you really just hurting yourself in the long run? First of all, you can easily get into the game of "How low will they go?" Secondly, it de-values your perception of quality if you are "cheap." Thirdly, who's to say after all this effort, you won't lose the business in a month or two when someone else quotes them an even lower price? What will you do next, price so low that you lose money with every client? I didn't think so. Here's what you could do though...
4. Develop a Hypothesis and a Solution to Match
After you know your target market, have defined their needs, and analyzed the competitive picture (currently using or not currently using a service like mine) go ahead and develop a clearly thought out hypothesis. For example, start with business NOT currently using a cleaning service, but that deal with customers or clients regularly at their location. Develop a strong case for WHY they would be wise to invest in your cleaning services. Show them on a breakeven analysis that your fee will be well compensated in either customer retention or converting a higher level of store traffic or business appointments into paying customers/clients. Then state your case why it is more cost effective and saves them valuable time to outsource this to you rather than doing it themselves or paying an employee overtime to do it. You can also emphasize that you are the "expert" at this, not someone's secretary so it is expected that you will do a far better job at it. For businesses that ARE already using a cleaning service or are currently "shopping" for one, state why you are unique and better. Determine the really compelling reasons why these businesses want a cleaning service to begin with.
Maybe it is a retail store that wants to create a better first impression for their customers. This will ultimately lead to a better customer experience and ultimately more instore purchases. A good example may be that unlike most competitors, you also clean windows. Well, as a marketing consultant to retail businesses, I can tell you that many "passerby's" will first look in a store window before deciding to walk in or not. Now for successful marketing, all retail businesses would perform better if they had more in-store traffic. So therefore, if your cleaning service also cleans windows, you could rightfully justify that your services are more valuable to their retail business. You actually HELP them get more customers and sell more products. Maybe it is a professional service business that needs to impress prospective clients to choose their services over a similar competitor. Your cleaning service may dust chairs and polish wooden conference tables. Many other cleaning services may not do this or do a poor job in doing so. Now, as marketing consultants to service businesses, I can also tell you that if a consultant, attorney, accountant, or any other business professional needs to meet with prospective clients in their office, they will appreciate a better appearance. So if your cleaning
services can provide this better than anyone else (or at least if you tell them about this first) you will get the business or at least be highly considered for it! Whatever the case may be, establish what makes you different and have you are best suited to meet their needs. Do you see where I am going with this? Your initial marketing questions asked how you can get more business by passing out flyers or sending faxes to small offices. Truthfully, that is simply not going to work. You are not looking at the overall big picture of why anyone would either want to hire a cleaning service or to hire your particular cleaning service.
5. You must make AN OFFER. Here are some examples: Marketing message/sales offer to a business that does NOT currently use a cleaning service " If you have never considered using a cleaning service before, allow us to show you how XYZ Cleaning, Inc can
make your store/office more presentable to customers and how this newly improved appearance will affect your cash register/bank statement. If you are weary of trying new things, don't worry. Use us FREE for one month and if you are not completely satisfied with the results, if you are not completely confident that it makes a difference to your customers, if you are not completely aware of how it raises the morale of your employees, then you do not have to using us again. But if YOU DO see a great improvement, we'll make you a great deal on our services, simply because we want your long term business." Marketing message/sales offer to businesses that DO currently use a cleaning service "I understand that you currently use ABC Cleaners, LLC. Now you may or may not be completely happy right now, but I want to make you a no-risk offer you can't refuse. The truth is that you likely get consumed in your day to day activities in running your business, overseeing operations, managing employees, and handling customers. Therefore, there may be little "imperfections" your cleaning service is making that goes unnoticed by you. But don't assume for one minute that your customers or potential customers won't notice. And remember, first impressions DO count! So here's our offer. Have us come in the morning after
your regular cleaning service cleans your office. We will do a thorough inspection with you present and look for anything they may have done a less-than-satisfactory job on. Then we'll show you why you probably over looked it for so long, but why your customers will take notice and how they will think differently about you because of it. Now, if everything is already 100% completely clean and presentable, we'll thank you for your time and then be on our way. But, if together we find lots of "little things" that are carelessly being done we will clean/fix it for you for FREE. That's right, use our services as a compliment to what you are already paying for. Compare the quality of work we do to what you are already paying for. If you can see the difference in what we do for you, compared to what you are already paying for, then consider us as your new cleaning service."
6. Develop your marketing message
Once you understand the true needs your potential clients have and the unique and competitive solutions you can offer, only then should you develop your marketing copy -- your sales pitch. The two examples above incorporate great marketing copy with a strong, benefits related offer. You can then deliver this through direct mail, telemarketing, or a combination of both. I would only recommend distributing flyers if you are confident you can place there where they will get read by people who make the decision to hire a cleaning service. So if there is an "Open Bulletin" board in an office building, then go for it. However, they are rare and you probably need permission anyway. I'd avoid the fax marketing altogether. It's quite annoying, ties up there fax line, and unless people have already heard of you, they are more likely to toss your message in the garbage. Try sending direct mail to the decision makers of these target companies and describe the benefits they will experience from using your services.
7. Follow up Even after identifying the businesses that are most likely to need your services, after you have identified a solution, and even after you contacted them with a compelling offer, you still have to follow up. Chances are they loved the sound of it when they got it. They had every intention of following up with you. But then just got busy. So your follow up call can make all the difference in the world and get your foot in the door ... in a very big way. Then it's up to you to DELIVER on your promise.
8.
ANALYSIS
Market Analysis The goal of a market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm. David A. Aaker outlined the following dimensions of a market analysis: Market size (current and future) Market growth rate Market profitability Industry cost structure Distribution channels Market trends Key success factors Market Size The size of the market can be evaluated based on present sales and on potential sales if the use of the product were expanded. The following are some information sources for determining market size: government data
trade associations financial data from major players customer surveys
Market Growth Rate
A simple means of forecasting the market growth rate is to extrapolate historical data into the future. While this method may provide a firstorder estimate, it does not predict important turning points. A better method is to study growth drivers such as demographic information and sales growth in complementary products. Such drivers serve as leading indicators that are more accurate than simply extrapolating historical data. Important inflection points in the market growth rate sometimes can be predicted by constructing a product diffusion curve. The shape of the curve can be estimated by studying the characteristics of the adoption rate of a similar product in the past. Ultimately, the maturity and decline stages of the product life cycle will be reached. Some leading indicators of the decline phase include price pressure caused by competition, a decrease in brand loyalty, the emergence of substitute products, market saturation, and the lack of growth drivers.
Market Profitability While different firms in a market will have different levels of profitability, the average profit potential for a market can be used as a guideline for knowing how difficult it is to make money in the market. Michael Porter devised a useful framework for evaluating the attractiveness of an industry or market. This framework, known as Porter's five forces, identifies five factors that influence the market profitability:
Buyer power Supplier power Barriers to entry Threat of substitute products Rivalry among firms in the industry
Industry Cost Structure The cost structure is important for identifying key factors for success. To this end, Porter's value chain model is useful for determining where value is added and for isolating the costs. The cost structure also is helpful for formulating strategies to develop a competitive advantage. For example, in some environments the experience curve effect can be used to develop a cost advantage over competitors.
Distribution Channels The following aspects of the distribution system are useful in a market analysis: Existing distribution channels - can be described by how direct they are to the customer. Trends and emerging channels - new channels can offer the opportunity to develop a competitive advantage. Channel power structure - for example, in the case of a product having little brand equity, retailers have negotiating power over manufacturers and can capture more margin.
Market Trends Changes in the market are important because they often are the source of new opportunities and threats. The relevant trends are industrydependent, but some examples include changes in price sensitivity, demand for variety, and level of emphasis on service and support. Regional trends also may be relevant.
Key Success Factors The key success factors are those elements that are necessary in order for the firm to achieve its marketing objectives. A few examples of such factors include: • Access to essential unique resources • Ability to achieve economies of scale • Access to distribution channels • Technological progress It is important to consider that key success factors may change over time, especially as the product progresses through its life cycle.
9.
CONCLUSIONS
Organizations engage in marketing research for two reasons: (1) (2)
(1) to identify and (2) solve marketing problems.
(3) This distinction serves as a basis for classifying marketing research into problem identification research and problem solving research. Problem identification research is undertaken to help identify problems which are, perhaps, not apparent on the surface and yet exist or are likely to company image, market characteristics, sales analysis, short-range forecasting, long range forecasting, and business trends research. Research of this type provides information about the marketing environment and helps diagnose a problem. For example, The findings of problem solving research are used in making decisions which will solve specific marketing problems. The Stanford Research Institute, on the other hand, conducts an annual survey of consumers that is used to classify persons into homogeneous groups for segmentation purposes. The National Purchase Diary panel (NPD) maintains the largest diary panel in the United States. Standardized services are research studies conducted for different client firms but in a standard way. For example, procedures for measuring advertising effectiveness have been standardized so that the results can be compared across studies and evaluative norms can be established. The Starch Readership Survey is the most widely used service for
evaluating print advertisements; another well-known service is the Gallup and Robinson Magazine Impact Studies. These services are also sold on a syndicated basis.
Customized services offer a wide variety of marketing research services customized to suit a client's specific needs. Each marketing research project is treated uniquely.
Limited-service suppliers specialize in one or a few phases of the marketing research project. Services offered by such suppliers are classified as field services, coding and data entry, data analysis, analytical services, and branded products. Field services collect data through mail, personal, or telephone interviewing, and firms that specialize in interviewing are called field service organizations. These organizations may range from small proprietary organizations which operate locally to large multinational organizations with WATS line interviewing facilities. Some organizations maintain extensive interviewing facilities across the country for interviewing shoppers in malls. Coding and data entry services include editing completed questionnaires, developing a coding scheme, and transcribing the data on to diskettes or magnetic tapes for input into the computer. NRC Data Systems provides such services.
Analytical services include designing and pretesting questionnaires, determining the best means of collecting data, designing sampling plans, and other aspects of the
research design. Some complex marketing research projects require knowledge of sophisticated procedures, including specialized experimental designs, and analytical techniques such as conjoint analysis and multidimensional scaling. This kind of expertise can be obtained from firms and consultants specializing in analytical services.
Data analysis services are offered by firms, also known as tab houses, that specialize in computer analysis of quantitative data such as those obtained in large surveys. Initially most data analysis firms supplied only tabulations (frequency counts) and cross tabulations (frequency counts that describe two or more variables simultaneously). With the proliferation of software, many firms now have the capability to analyze their own data, but, data analysis firms are still in demand.
Branded marketing research products and services are specialized data collection and analysis procedures developed to address specific types of marketing research problems. These procedures are patented, given brand names, and marketed like any other branded product
Types of marketing research Marketing research techniques come in many forms, including: Ad Tracking – periodic or continuous in-market research to monitor a brand’s performance using measures such as brand awareness, brand preference, and product usage. (Young, 2005) Advertising Research – used to predict copy testing or track the efficacy of advertisements for any medium, measured by the ad’s ability to get attention (measured with Attention Tracking), communicate the message, build the brand’s image, and motivate the consumer to purchase the product or service. (Young, 2005) Brand equity research - how favorably do consumers view the brand? Brand association research - what do consumers associate with the brand? Brand attribute research - what are the key traits that describe the brand promise? Brand name testing - what do consumers feel about the names of the products? Commercial eye tracking research - examine advertisements, package designs, websites, etc. by analyzing visual behavior of the consumer
Concept testing - to test the acceptance of a concept by target consumers
Cool hunting - to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle Buyer decision processes research - to determine what motivates people to buy and what decision-making process they use
Copy testing – predicts in-market performance of an ad before it airs by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. (Young, p 213) Customer satisfaction research - quantitative or qualitative studies that yields an understanding of a customer's of satisfaction with a transaction Demand estimation - to determine the approximate level of demand for the product Distribution channel audits - to assess distributors’ and retailers’ attitudes toward a product, brand, or company Internet strategic intelligence - searching for customer opinions in the Internet: chats, forums, web pages, blogs... where people express freely about their
experiences with products, becoming strong "opinion formers"
Marketing effectiveness and analytics - Building models and measuring results to determine the effectiveness of individual marketing activities. Mystery Consumer or Mystery shopping - An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products. Positioning research - how does the target market see the brand relative to competitors? - what does the brand stand for? Price elasticity testing - to determine how sensitive customers are to price changes
Sales forecasting - to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc. Segmentation research - to determine the demographic, psychographic, and behavioural characteristics of potential buyers Online panel - a group of individual who accepted to respond to marketing research online Store audit - to measure the sales of a product or product line at a statistically selected store sample in order to determine market share, or to determine whether a retail store provides adequate service Test marketing - a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market Viral Marketing Research - refers to marketing research designed to estimate the probability that specific communications will be transmitted throughout an individual's Social Network. Estimates of Social Networking
Potential (SNP) are combined with estimates of selling effectiveness to estimate ROI on specific combinations of messages and media.
All of these forms of marketing research can be classified as either problem-identification research or as problem-solving research. There are two main sources of data - primary and secondary. Primary research is conducted from scratch. It is original and collected to solve the problem in hand. Secondary research already exists since it has been collected for other purposes. It is conducted on data published previously and usually by someone else. Secondary research costs far less than primary research, but seldom comes in a form that exactly meets the needs of the researcher. A similar distinction exists between exploratory research and conclusive research. Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Conclusive research draws conclusions: the results of the study can be generalized to the whole population. Exploratory research is conducted to explore a problem to get some basic idea about the solution at the preliminary stages of research. It may serve as the input to conclusive research. Exploratory research information is collected by focus group interviews, reviewing literature
or books, discussing with experts, etc. This is unstructured and qualitative in nature. If a secondary source of data is unable to serve the purpose, a convenience sample of small size can be collected. Conclusive research is conducted to draw some conclusion about the problem. It is essentially, structured and quantitative research, and the output of this research is the input to MANAGEMENT INFORMATION SYSTEMS (MIS).
Marketing research methods Methodologically, marketing research uses the following types of research designs: Based on questioning: Qualitative marketing research - generally used for exploratory purposes - small number of respondents - not generalizable to the whole population - statistical significance and confidence not calculated - examples include focus groups, in-depth interviews, and projective techniques Quantitative marketing research - generally used to draw conclusions - tests a specific hypothesis - uses random sampling techniques so as to infer from the sample to the population - involves a large number of respondents - examples include surveys and questionnaires. Techniques
include choice modelling, maximum difference preference scaling, and covariance analysis. Based on observations: Ethnographic studies -, by nature qualitative, the researcher observes social phenomena in their natural setting - observations can occur crosssectionally (observations made at one time) or longitudinally (observations occur over several timeperiods) –
examples include product-use analysis and computer cookie traces. See also Ethnography and Observational techniques.
Experimental techniques -, by nature quantitative, the researcher creates a quasi-artificial environment to try to control spurious factors, then manipulates at least one of the variables - examples include purchase laboratories and test markets
Questionnaires 1. What are the objectives of the marketing strategy? Are they clearly stated? Are they consistent with the objectives of the firm? Is the entire marketing mix structured to meet these objectives?
2. What marketing concepts are at issue in the current strategy? Is the marketing strategy well planned and laid out? Is the strategy consistent with sound marketing principles? If the strategy takes exception to marketing principles, is there a good reason for it?
3. To what target market is the strategy directed? Is it well defined? Is the market large enough to be profitably served? Does the market have long-run potential?
4. What competitive advantage does the marketing strategy offer? If none, what can be done to gain a competitive advantage in the marketplace?
5. What products are being sold? What is the width, depth, and consistency of the firm's product lines? Does the firm need new products to fill out its product line?
Should any product be deleted? What is the profitability of the various products?
6. What promotion mix is being used? Is promotion consistent with the products and product images? What could be done to improve the promotion mix?
7. What channels of distribution are being used? Do they deliver the product at the right time and right place to meet consumer needs? Are the channels typical of those used in the industry? Could channels be made more efficient?
8. What pricing strategies are being used? How do prices compare with similar products of other firms? How are prices determined?
9. Are marketing research and information systematically integrated into the marketing strategy? Is the overall marketing strategy internally consistent?
