SWOT Analysis, Competitive Intelligence, and Market Research

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Effective Brand Strategy

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In today’s environment, it’s critical for small businesses to create a successful brand strategy for their company, product or service.  An effective brand strategy creates a unique identity in the mind of the consumer that differentiates it from the competition.  Branding makes an emotional connection to consumers, building a stronger and longer relationship with them.  Without an identity and a position in consumers’ minds, your product is just another commodity.   But what makes a brand strategy successful?  The first step is creating the positioning statement.  A standard positioning statement looks like this:

For [target consumers]

Who want/need [compelling reason to buy]

The [product name] is a [product category]

That provides [key benefit].

Unlike [main competitor],

The [product name] [key differentiation]

 

The target consumer is the foundation of the positioning statement.  Who is the brand for and what are their wants/needs?  The more specific and focused the target consumer, the better the brand will address their needs.  If you don’t know the target consumer, a market/consumer segmentation analysis will be able to define the consumer segments within the industry.

The last line of the positioning statement is the USP or unique selling proposition which defines your competitive advantage.  The best USPs are not based on product attributes, rather they are based on an emotional benefit.  The USP should be based on fact, grounded in accomplishments and past experience with consumers.  Focus groups with your current consumers should be able to identify what they think and feel about the product; what makes your brand special.

A winning brand strategy should be:

  1. Differentiated. Is the strategy unique compared to competitors?  If your competitor already stands for quality, you should rethink that strategy and come up with something different and unique.  Think about Volvo.  They don’t stand for quality; they are associated with safety: the safest vehicles for discerning families.
  2. Ownable.  Your strategy and positioning should be something you, and only you, can own.  For example, Skittles, Taste the Rainbow.  Skittles owns the rainbow.  When people think about Skittles, they remember the rainbow.
  3. Sustainable. Is the strategy something that is going to stand the test of time?  Can someone else come along and take it from you?  If you stand for the lowest price, another product can come along at a lower price.  Price is not a sustainable brand strategy, unless you can consistently be lower priced than any current or future competitors.  Think Wal-mart.
  4. Consistent. The message you send to your customers must always be the same.  Any and all communications must deliver the same message to your customers.  The brand strategy includes all aspects of the brand such as packaging, price, logo, brand name, channels of distribution, etc.  If any aspect of the strategy contradicts the message, it will cause confusion.  For example, if you have a high end skin care product, you wouldn’t sell it in Dollar Stores; you would sell it in department stores.  If you have a premium product, your packaging should reflect the premium positioning.  Think about Ford, Quality is Job One, but have you ever seen the lines at a Ford service center?  Your product must deliver what the message communicates.
  5. A Roadmap.  The brand strategy must be able to guide all of the future decisions for the product.  Any future promotions, advertising, package changes, etc., should be consistent with the positioning statement.  If its not, it will be confusing for the customer.

Effective brand strategy will have a direct impact on the bottom line and market share. Have a brainstorming session to work on the positioning statement.  Bring in past market research to help define it.  Assess whether you need additional market research to be able to accurately define the target audience, the key differentiation and compelling reasons to buy.  Market research is becoming more affordable these days.  Some of the larger studies, such as a Market Segmentation, can be attained by using the power of a buyer group.

 

The Importance of Marketing Research in a Recession

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 Savvy marketers know that cutting back on marketing research during a recession is risky.  There are many benefits to continuing marketing research efforts despite a downturn. Riding out this recession depends on staying relevant in the eye of the consumer.  Consumers’ attitudes and needs are changing rapidly.  Americans are cutting back on purchases and looking for deals.  How do companies compete effectively in this new environment without giving away the farm?  Companies need to continue marketing research to manage this uncertainty. How will marketing research benefit your company?

Increase sales.  Quantitative and qualitative studies can be conducted to help you better understand consumers’ attitudes and needs and determine how well your products meet those needs.  Properly designed research will lead to marketing strategies that will target increased product usage from current consumers as well as non-users. Marketing research will help with new product development, advertising and promotion, paving the way for a larger return on investment.

Maximize profit. There are many things a company can do to maximize profits beyond just cutting costs, such as item optimization, customer profitability analysis, and price elasticity.  Weeding out unprofitable products and customers takes time and focus, but the company as a whole will be in a stronger financial position for it.  A price elasticity study will help to determine how much a price increase will impact sales and profitability. It can also determine the optimal price point or the price in which a product is most profitable.  Developing goals based on profitability rather than sales will encourage the entire company to act in a profitable and more responsible manner.

Minimize Risk. The more you know and understand about your consumers, competition and customers, the better able you are to make informed business decisions with confidence.  Tracking surveys are a good way to assess attitudes and behaviors over time, and qualitative research will fill in the details and help you understand what works and doesn’t work with your marketing strategy and communication.

Large companies understand the need for market research and have their own market research departments.  There are more ways than ever to reach consumers in today’s digital world.  You can utilize social networking sites as a cost effective way to conduct market research.  But be careful, those websites may not provide you with the total picture.  You will want to supplement the research with more traditional methodologies.  There are ways to keep research costs low without sacrificing the integrity of the results.  The benefits of the market research can outweigh the costs.

Savvy marketers know that cutting back on marketing research during a recession is risky.  There are many benefits to continuing marketing research efforts despite a downturn. Riding out this recession depends on staying relevant in the eye of the consumer.  Consumers’ attitudes and needs are changing rapidly.  Americans are cutting back on purchases and looking for deals.  How do companies compete effectively in this new environment without giving away the farm?  Companies need to continue marketing research to manage this uncertainty. How will marketing research benefit your company?

Increase sales.  Quantitative and qualitative studies can be conducted to help you better understand consumers’ attitudes and needs and determine how well your products meet those needs.  Properly designed research will lead to marketing strategies that will target increased product usage from current consumers as well as non-users. Marketing research will help with new product development, advertising and promotion, paving the way for a larger return on investment.

Maximize profit. There are many things a company can do to maximize profits beyond just cutting costs, such as item optimization, customer profitability analysis, and price elasticity.  Weeding out unprofitable products and customers takes time and focus, but the company as a whole will be in a stronger financial position for it.  A price elasticity study will help to determine how much a price increase will impact sales and profitability. It can also determine the optimal price point or the price in which a product is most profitable.  Developing goals based on profitability rather than sales will encourage the entire company to act in a profitable and more responsible manner.

Minimize Risk. The more you know and understand about your consumers, competition and customers, the better able you are to make informed business decisions with confidence.  Tracking surveys are a good way to assess attitudes and behaviors over time, and qualitative research will fill in the details and help you understand what works and doesn’t work with your marketing strategy and communication.

Large companies understand the need for market research and have their own market research departments.  There are more ways than ever to reach consumers in today’s digital world.  You can utilize social networking sites as a cost effective way to conduct market research.  But be careful, those websites may not provide you with the total picture.  You will want to supplement the research with more traditional methodologies.  There are ways to keep research costs low without sacrificing the integrity of the results.  The benefits of the market research can outweigh the costs.

 

Tactical Approaches To Driving Growth

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Let’s face it.  Everyone’s top priority is to survive in today’s economy.  Staying in business should be our number one goal right now.  How do we do that? Let’s get back to the basics.  In simplest terms, sales volume is a function of distribution (the number or percent of stores selling your product) and rate of sale (how fast your products are selling in those stores).  Using this model of SALES = DISTRIBUTION X RATE OF SALE, here are a few ways to maximize your sales opportunity.

If you have low distribution, but high rate of sale, focus first on increasing distribution.  But what is distribution and how do we measure it?  We can calculate approximate distribution by taking the number of stores selling divided by the total number of stores in the United States.  Once you have an estimate of your distribution, then you can try to grow it by proactively attracting new customers.  Depending on the mix of customers you already have, you may want to target new customers based on store size, demographics, location or class of trade.  For example, if you aren’t in the larger chain retailers like Michaels, you may want to start there.  If you want to increase your distribution in independents, you need to determine the best way to reach them, such as telephone sales, direct mail, store sales calls, etc.  You need to determine the most cost effective way to reach your target customers.  It is typically more costly to try to increase distribution than to affect rate of sale.

If you have high distribution or cannot afford to actively increase distribution, you will want to focus on increasing rate of sale.  Rate of sale can be calculated in different ways.  The simplest formula is SALES DIVIDED BY NUMBER OF STORES SELLING which will provide you with an Average Sales per Store Selling figure.  There are many marketing tactics you can do to impact Average Sales per Store Selling, such as advertising, promotion, price discounts, etc.  However, we can get even more tactical than that.  In the Consumer Packaged Goods Industry, we have something we call the 80/20 Rule which is when 20% of the customers account for 80% of the sales.  Determine who your top customers are according to the 80/20 Rule and focus your sales and marketing efforts on them.

Take those top 20% of customers and dig deep into their business. Do they carry all of your products/product lines?  How can you get them to carry all of your products?  Are they carrying the right products for their consumer base?  Create a Top Customer List, visit the top stores, and meet with the store managers.  Understand what their needs are and try to help them grow their business with your products.  Building these relationships outside of trade shows helps build loyalty and trust among your core customers.  At the same time, it will help your customers gain a competitive advantage in their local area. Once you have maximized the potential in your top customers, start working on bottom customers.  Compare these bottom customers to the top customers.   What are the top customers doing in terms of product mix, promotion, advertising, pricing that you can then apply to the bottom customers?

Employing some of these tactics will help you accomplish your sales goals by maximizing the potential of your existing products/product lines and help to solidify you as a player in the minds of your customers.

 
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