Please read the article and answer the qeustion. The Need for Promotion You’ve experienced your business “light bulb” idea for a terrific new product or service. You’ve organized an office complete with desk, phone, and computer, and you may possibly even have a small storefront or service vehicle. By all accounts, you are in business. Now ask yourself this: Does your target market know you exist? In order for customers to purchase your goods and services, you must first go to them. You need to advertise and actively promote your business before you can expect inquiries into what you have to offer. While there are a handful of promotional means that are standard for all business ventures, entrepreneurs’ limit to promotions is their own creativity. Unless you know enough customers to keep you in business from the day you open up, you need to gain customers. To some extent, that is a game of numbers. To get people to buy what you are offering, you first need to make an impression on them, letting them know who you are and what you are offering. Those who have some interest become your sales leads and the most interested ones become your prospects for a sale. So at a fundamental level, promotion drives sales. How many prospects? Marketers talk about the marketing funnel, a rule of thumb about how many prospective customers it takes to find one who will actually make a purchase. For mass market and Internet advertising, the typical ratio is 1000 to 1. Figure 10.1 graphically shows you the promotion process and how the marketing funnel fits into it. Promotion is essential to gaining the attention of people in the general audience, and any- thing you can do to improve your marketing will improve your chances of making a sale. The funnel provides some insights into recognizing what is truly important in the marketing process. For this funnel, every customer you keep saves you from having to contact 1,000 new people in the general audience to find a replacement customer—so improving customer loyalty is tremendously important. We will talk about loyalty and other postsale issues later in this chapter. The funnel illustrates selling to the general public, but what if you could target people you al- ready know have a reason to be interested in your goods or services? Maybe one or two people in a thousand would buy a baseball glove, but what if you could target people playing baseball? Instead of two sales per thousand, with qualified leads like people already playing baseball, you might be able to sell 10 times as many gloves, or more. Following Figure 10.1, in this chapter we will talk about defining your target market and deter- mining how to identify segments like those already playing baseball. We then discuss the methods of promotion including social media, public relations, and press relations. We conclude the chapter with a discussion of personal selling, and managing postsale relations in order to retain as many customers as you can. But first, as is true in so much of entrepreneurship, it all starts with you, your ideas for your business, and its goods or services. Because all promotion is about the value you can provide your customer. The Basics: Crafting Your Value Proposition Chapter 7 introduced the idea of value and cost benefit. This was further developed by talking about your total product in Chapter 9. As you recall, your total product is not just the bare bones object or service you provide, but what it means to your customers. You don’t just do a great job cleaning houses; you provide free time to your customers. You don’t just sell desks; you handcraft beautiful and functional desks in exotic woods. You can talk about your competitive edge—what you do bet- ter than your competition—or your distinctive competency—what you do that no one else does, but what it all boils down to is your value proposition.2 Youcanthinkofdefiningyourvaluepropositionalongthesamecategoriesofvalueandcostben- efits of quality, style, delivery, service, technology, shopping ease, place, and scale and scope. For eachofthecategoriesmentionedinChapter7,thinkabouthowyourcompany,product,orserviceis differentfromanyoneelse’s.Undereachcategory,answerafewquestionsasobjectivelyasyoucan: ● Why would someone want your product or service? What need does it fill? List the benefits and the problems it solves. In what way does it improve the life of the user? ● Would you personally buy this product? Why or why not? The “why nots” may give you an insight into potential weaknesses or categories of differentiation that you need to work on. From there, you can then start to determine who will most benefit from your product or service. Begin with these questions: ● Who, in your opinion, is most likely to buy it? Be as specific as you can. How old are they? Male or female? Where do they live? Where do they work? These people are your primary target market. It doesn’t mean that you don’t have second-or third-tier markets. ● How does your primary target market currently go about buying existing products or services of this type? What are its sources of information? Word-of-mouth? Trade publications? Yellow Pages? The Internet?3 By answering these questions, you can start to further develop the value of your product and ways you can find and communicate with your customers. Once you know who needs your product or service, you can begin to craft your value and message directly to where your market would look to find information related to your small business. Skill Module 10.1 will help you develop a value proposition. Segmenting Your Market Many entrepreneurs have trouble answering the question, “Who is your target market?” Most en- trepreneurs assume that everyone is their target market. Why should an entrepreneur care who buys their product, as long as it’s sold? If pressed, the entrepreneurs can usually tell you who is most likely to buy their product or service and why. When they can tell you this, they have targeted their market. Although targeting and market segmentation are more fully discussed in Chapter 12, there are some concepts that are important to know in order to understand promotion. Segmentation is the process of dividing the market into smaller portions of people who have certain common characteristics. Your target market is the segment or segments you select on which to concentrate your marketing efforts. A marketer can chose more than one target market, but it is customary for a smaller business to concentrate its efforts on one target market at the beginning and consider secondary ones later. Marketers use information on the target market’s wants and needs in order to tailor the product or service, as well as its price, distribution, and promotion.4 Dividing the market into different segments can be done in a number of ways. Some of the more typical ways include geographically (in a certain city or neighborhood), demographically (income, age, religion, ethnicity, and many others), or by the benefits sought (clothing that is practical, styl- ish, for a particular sport, etc.). Most companies will use several ways of segmenting to come up with their final target market. For example, the Beacon Street Girls products were segmented by gender (girls) and age (9–13). In addition, the fact that they were into values and community service would be a form of benefit segmentation. Beacon Street Girls also had primary and secondary target markets—the girls and their parents and other gift givers. Let’s start with an example: you run a day care center. Who is your market? For starters, it is small children, or at least, the parents of small children. You have segmented by life cycle position; that is, you have eliminated children, teenagers, senior citizens, and parents of older children. But this really does not eliminate very many potential customers. How else could you limit your poten- tial customers? Driving distance, say 15 miles, is a popular limit since parents are unlikely to want to drive too far. Income, or disposable income, is also a key segmentation device. Families need to be rich enough to afford your service but not so rich as to hire nannies. Other segmentation ideas include schedule (parents who work evenings and nights) or children’s hobbies (e.g., offering soccer or music lessons). The more accurately you define your segment, the closer you come to defining your target market. Figure 10.1 -> https://d2vlcm61l7u1fs.cloudfront.net/media%2F4ab%2F4ab6fad1-376b-4462-ae71-821c81007d0d%2FphpNETp9F.png Choose one small retail business (e.g., children’s clothing store, pet store, independently owned beauty salon, restaurant, etc.). Using promotional and advertising material, level of service, in-store displays, location, and any other information available (website), create a value proposition for that business. The goal of this value proposi- tion is to create and occupy a space inside the target customer’s head. Create a value proposition for your chosen small retail business by replacing the text in parentheses below as it reflects the product, market, and strategy. ● For (target customer) ● Who (statement of the need or opportunity) ● The (retail business name) is a (product or service category) ● That (statement of key benefit–that is, compelling reason to buy/purchase) ● Unlike (primary competitive alternative) ● Our business (statement of primary differentiation) ● Is available (where) Now place the answers in paragraph format to arrive at the overall value proposition. Feel free to share your perception of the proposition with the actual small business owner. The question – What are the categories of value and cost benefits that define your value proposition?