Few businesses keep tabs on competitors, yet such knowledge can give you a distinctive competitive edge. Building a file on them, looking at everything from customer’s viewpoint and asking suppliers and employees what they know about them can be worthwhile. Keeping a jump ahead of competition means knowing precisely what they are up to. Here are some tips to help you stay one, if not several, leaps ahead.
Step 1 Get clear on your marketing mix
You will often here someone on website refer to marketing mix. This refers to five P's of marketing. Product, Place, Price, Promotion and People. Any business who combines 5 P's effectively will be successful.
Who is Your Customer? In order to tailor your marketing and advertising strategies to appeal to tastes and interests of your market, you must first identify your customer. In order to do this, you it is necessary to conduct thorough research of consumer marketplace. Keep in mind, more information you have about your target market, better able you will be to develop a successful marketing plan.
A market profile typically uses primary and secondary sources to answer key questions about a potential market. A profile is a picture or an outline. Information that makes up social profiles of people in your target market is called demographic information, and includes: age, usually given in a range (20-35 years) sex marriage/partner status location of household family size and description income, especially disposable income (money available to spend) education level, usually to last level completed occupation interests, purchasing profile (what are consumers known to want?) cultural, ethnic, racial background
A clothing manufacturer may consider a number of possible target markets--toddlers, athletes, grandparents (for grandchildren), teenagers, and tourists. A general profile of each of these possible markets will reveal which ones are more realistic, pose less risk, and which are more likely to show a profit. A test market survey of most likely market groups, or those who buy for them, such as parents for babies and toddlers, can help you separate real target markets from unlikely possibilities. The Right Product What are your customer's needs? What do they expect to get when they buy your product or use your service? The right product is one that best fits their requirements. People who eat in restaurants want more than a good meal. They might expect quick service, a reasonable price, a vegetarian menu, a children's menu, entertainment, a drive through window, or to be identified with a trendy crowd. It becomes a difficult and probably an unprofitable venture trying to satisfy everyone's needs.
If you have identified your customer and listed their expectations, you can design your product or service around their requirements.
The more you fulfil your customer's expectations, better quality of your product. Think of your product or service as more than just what customers pays for. When you are planning your business consider how whole transaction meets customer's needs.
It is important to note that developing product or service COMES AFTER you have identified customer and their need. If you have an idea you think might be worth pursuing, develop concept only when you have determined a genuine need and interest in product.
Then let market help you develop it and strengthen it. Most small businesses fail because market was not enthusiastic about their idea and entrepreneur was too vested to listen to market early in process. Positioning your Business Positioning refers to image customers have of your business. The goal is to create a business image that enables you to position your business in such a way that, in essence, it acts as a natural magnet for your intended customers. A number of factors that customers often look for include: price (i.e. cheapest price, fair price, price for quality, etc.) assortment parking service sales personnel quality fashion convenience location atmosphere
Your overall position should emphasize those areas that your customers value most, and those which make you different from your competition. Pricing Techniques The importance of pricing can not be underestimated as incorrect pricing can often result in failure of a business. New businesses often make mistake of either charging too little or too much for their product or service. So to help you avoid making one of these mistakes, following section will outline some of guiding principles of price determination. Price is a key part of marketing. Setting prices is called pricing.
Pricing to Market Compare prices with your competitors for similar products and services. Set price range that customers will expect. You can use that market price range--what is acceptable to market--as a guide to set your prices. Businesses or people to whom you sell may also price to market by telling you what they will pay for your product or service. As you keep records of actual costs, cost approach to pricing will help you make sure all your costs are covered, which may not be true in a market approach to pricing.
NOTE: Be careful about under pricing in order to compete or make sales. Use competitor's prices to establish price range for similar products or services but don't under price; if your true costs are higher, your final prices will have to be higher.
Cost Approach to Pricing Price must cover all costs of goods/services sold, including production costs of supplies, materials, fixed overhead, and time/labour, plus a profit. Costs should include costs of production, labour and non-labour, including overhead or fixed costs as well as supplies and materials. Use this simple formula in setting a price (per unit): Total Costs of Production Per Unit + Desired Dollar Profit Per Unit.