NOTICE: Hard copies of the Australian New Crops Newsletter are available from the publisher, Dr Rob Fletcher. Details of availability are included in the
Advice on Publications Available.By Kenneth M Biderman MBA
Mr Biderman's book is available on the Internet at the Web site:
Web site: http://www.nettally.com/mktg/index.htm
The publication covers the following topics:
How to do your own Professional Marketing and Business Plan
How to Market Survey your Competition
Recall Systems
Referral Services
Barter Exchanges
Customer Financing
Advertising Agencies
Publicity
Direct Mail
Newspaper Advertising
Magazines
Television Advertising
Radio Advertising
Yellow Pages
Brochures
Videos
Print Advertorials
Internet
Telemarketing
Employee Compensation
Satellite Offices
Business Sales & Acquisitions
How I Work
[The following notes have been extracted from Chapters 1, 2 and 8 of Mr Biderman's book, with his kind permission. He can be contacted at: Email: septuagint@nettally.com]
Introduction
Marketing is like war.
We need to analyse our strengths and weaknesses and those of the competition.
Spending big money to defend a position that is impossible to defend anyway is a poor strategy, especially if we could be launching a marketing campaign into undefended territory elsewhere.
The victor in any war is most likely to be the combatant with the best intelligence.
It's best to collect as much data as is feasible and then to deploy our marketing assets after careful study of the available intelligence.
One advantage we have is that the assets of the competition and their movements can be readily discernible. Reconnaissance needs to be carried out, raw data collected and analysed, and converted into intelligence, before we make any command decisions.
The few assets we have must be deployed carefully for maximum impact.
The marketing war cannot be won with defensive actions only. Hence, competitive intrusions need to be made into enemy occupied territory and such intrusions need to be strategically planned.
The weapons to be used are marketing tactics and we need to understand how these weapons work and how they are used to our best advantage.
After we have positioned ourselves in a market, we need to fortify this position against future competitive marketing thrusts. If we are surrounded by competitive marketing advances, we may need to withdraw our assets to another position which can be secured and defended more profitably.
The rules of engagement are determined by the legal system, ethical considerations, appropriate moral behaviour and the bottom line of our profit and loss statement.
How to do your own Professional Marketing and Business Plan
Marketing needs to have a plan. In preparing the plan it is important to be honest with ourselves.
A marketing plan starts with a Current Analysis which analyses where our marketing and financial affairs are at the moment.
The best marketing efforts are a failure if they generate new customers at a loss, so we must always keep an eye on the bottom line.
We should start with a Profit and Loss Statement not more than six months old. It states how much money came in and how much money went out, categorically.
Money coming in includes all receipts, such as all the bank deposits made into a business bank account over the given period of time but does not include any money received from the sale of equipment or other extraordinary (not usual) expenses.
From these receipts, we need to deduct all the money the business has spent, such as through the business account cheque book during this same period. It is often helpful if these expenses are categorised, under classes such as: Rent, Salaries including Payroll Taxes, Cost of Goods Sold, Supplies, Insurance, Telephone, Postage, Utilities, and Advertising.
The amount of money left after deducting expenditure from the receipts, before the payment of taxation is before-tax profit. In these notes, the influence that taxation may have on how we approach our business is not considered but it could influence how we conduct our business. [The ramifications of the Ralph Report in Australia could have significant influence here if adopted as law]
The proportion of receipts or gross income that was spent on advertising and marketing during the given period also needs to be determined.
Advertising and marketing costs include expenses such as: Yellow Page Ads, Newspaper, TV, Radio, Direct Mail, Newsletters, Brochures, Publicity Agents, Consultants, Artwork Fees, Advertising Agency Fees, and any other related expense.
For the same period, the proportion of gross income which was net before-tax profit needs to be determined.
The same ratios need to be determine for the payroll, so we can determine what proportion of gross income is currently being spent on the payroll. As the business expands, so the payroll expands.
It is important to determine how profitable any expansion has been in terms of the increased payroll and other operating expenses.
These figures will be extremely helpful in the future to objectively evaluate the outcomes of our marketing and business efforts.
Financial Summary
This summary will include the following data:
Financial Forecasts
Where do we want to be at some particular time in the future?
Due to fluctuations in the economy and the market, one year forecasts are more meaningful than those over any longer period. We need to create a plan which will deliver the projected target in one year and this should be visualised as monthly gross income figures at which to aim, so long as our production is not seasonal.
Marketing or business plans over periods of less than three months are not usually worthwhile, but a monthly goal can be easier to use as a goal.
Goals need to be realistic and any partners should be in agreement and supportive of these goals.
Marketing analysis
Once goals have been agreed upon, tactics to achieve them need to be determined.
The key to growth normally is new customers unless there are new products or services to market to existing customers.
How much is a new customer worth to our business in terms of gross income?
If we are currently operating at a profit, a modest growth in new customers should result in a higher percentage of profit with each new customer, since our fixed costs such as rent, payroll, computer, and telephone system expenses should remain the same.
There will be a point in time at which the number of new customers has been so large that there must be an increase in the fixed expenses through increases in payroll or rent, forcing a reduction in profits from the extra new customers.
As growth increases, we will pass another, higher break-even point and enter a regime of higher profitability.
The 'break-even point' is the dollar amount in terms of net income that equals the operating expenses of a business.
Accurate records, referred to as cost accounting or payback analysis, are important because we need to determine where the most profitable positioning for our company will be. Increases in size do not necessarily mean that this is more profitable.
Taxation can also have a significant influence on where the break-even point will be.
How will we promote our business to encourage new customers and which of the categories used for promotion attracts the customers who spend the most money?
The financial quality of new customers by source assists in determining the most useful methods of promotion. Financial quality can be calculated from the profit made on the total purchases resulting from each form of promotion and this comparison is called the 'Return on Investment'.
Marketing Return on Investment analysis
This analysis will include the following data:
If the Gross Profit per new customer is negative, the method of promotion is losing money for us. If we don't know what a new customer is worth to us in terms of gross profit, promotion cannot be properly analysed.
To achieve the monthly goal in terms of new business, how much money should be spent on promotion? Each promotional vehicle will stop performing at some saturation point, because our use of that vehicle will have no effect on the numbers of potential customers using it.
New Business Strategy
This analysis will include the following data:
(This is not a true gross income figure because we deducted the advertising costs).
Such an analysis enables us to monitor the marketing efforts and to determine whether our financial goals are being realised.
Niche marketing
We need to supply a product which is in demand, which we can provide profitably and which is not being emphasised in the marketing efforts of our competitors; this can be called Niche Marketing.
To maximise returns on our investment, we need to direct our marketing efforts at our target audience, which we identify through demographic studies, that is, descriptions of an audience containing potential customers.
A demographic study may be focussed on determining the sex, age, cultural background, occupation, home location etc. of all new customers over the past few months, or of potential customers in a geographical area.
Once this information is available, the appropriate medium to target potential customers can be determined.
Although the demographics of a medium may be appealing, the cost, image and previous use by competitors should be taken into account.
Finally, most promotion wisdom is usually derived from the experience of large companies, large corporations and extensive advertising campaigns focussed at increasing market share.
Niche marketing is not like this and requires special attention. Otherwise large losses can be sustained quite easily through inappropriate targeting of promotional efforts.
How to Market Survey your Competition
We need to know about the competition.
The consumer often has no relevant purchasing knowledge and publicity and advertising provides it.
Publicity
Publicity is closely related to advertising but is quite different.
Advertising campaigns can be easily controlled. Publicity is extremely hard to control.
There are no guarantees with publicity.
Our competition in terms of publicity is anything newsworthy in the whole world.
Businesses often get publicity without looking for it.
When publicity works, results can be spectacular.
Television is the most powerful publicity vehicle. Television shows can be local or national and can be news or talk (current affairs, lifestyle, rural, business etc.) shows. Newspapers can also be local or national. [Many local newspapers may seek editorial to accompany an advertisement about some novel product.]
To obtain appearances on television of get coverage in the print media, the most common vehicle is the press release. It is a printed means of addressing our target audience and advertises our message to the producer or editor. A press release must attract the producer's attention and maintain their interest.
Are we at the forefront of something?
If there is media coverage of something that we are well versed in, we should contact the other media outlets about it. They all like to cover what the other stations and papers cover and don't want their audience to think they are missing out.
The best way to start with a publicity campaign is to construct a media kit which works in conjunction with our press release.
The media kit might contain a resume, photos of people involved and the relevant products, lists of other media appearances, copies of write-ups which may have appeared in the media and lists of public speaking engagements if we wish to publicise ourselves and our company as well as the product. If we want to publicise the product only, the media kit will explain the product, show photos and describe why it is newsworthy.
National television often won't be interested in us unless we can document a history of television appearances. This documentation should be tapes of previous appearances and lets the channels know how someone looks on air. Local television channels are not as particular. If we are focussing on the product, the emphasis on us is not so serious.
The topic of the press release needs to be interesting, revealing and newsworthy.
There are books for sale in the local newsagents which contain names of media contacts for newspapers, magazines, radio and television.
We will be targeting producers of television and radio shows and the science or rural editors of publications. We could also search the library for specialised magazines, journals and periodicals that relate to the product we will be publicising.
A mailing list should be created and software used to print address labels and 'mail merge' letters to explain our message.
Our media campaign should start with the local media. It will be easier for us to obtain publicity from them. Such publicity could be used later on to obtain national publicity.
Five days after all the local media outlets have been send a media kit with a press release, call those who did not respond.
This calling process could be termed 'telemarketing'.
If our press release was not considered interesting, we need to find out why. At the same time, we can find out what the producer or editor is looking for in our field. Hence, a relationship can be formed.
Once a number of local appearances and articles have been achieved, the same approach can be used over a wider area and national television and newspapers targeted, with the same follow-up enquiries for the media outlets that have not responded.
Once a newspaper responds, a writer and possibly a photographer will come to visit. They will ask questions, gather information, hopefully take pictures and write the story. They determine what goes in the story so we need to be careful that we are not the subject of some exploitative or investigative journalism.
We need to be careful if the writer wants information that could be sensitive or controversial, so we should ask very specific questions. It can often be a good idea if the journalist interviews customers as well, so long as we know the journalist and have some idea of the theme of the proposed article.
Some publicity will be highly productive and some will produce little or no response. When it works, it can be very effective.
However, depending solely on the media for new customers is not wise since the media are not a dependable method of eliciting response.
For further information, consult the Web site:
http://www.nettally.com/mktg/index.htm
Or contact Mr Biderman directly at:
Email: septuagint@nettally.com
Any claims made by authors in the Australian New Crops Newsletter are presented by the Editors in good faith. Readers would be wise to critically examine the circumstances associated with any claims to determine the applicability of such claims to their specific set of circumstances. This material can be reproduced, with the provision that the source and the author (or editors, if applicable) are acknowledged and the use is for information or educational purposes. Contact with the original author is probably wise since the material may require updating or amendment if used in other publications. Material sourced from the Australian New Crops Newsletter cannot be used out of context or for commercial purposes not related to its original purpose in the newsletter
Contact: Dr Rob Fletcher, School of Land and Food, The University of Queensland Gatton College, 4345; Telephone: 07 5460 1311 or 07 5460 1301; Facsimile: 07 5460 1112; International facsimile: 61 7 5460 1112; Email:
r.fletcher@mailbox.uq.edu.au[
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GK; latest update 17 October 2001 by: RF