Channels to market 13 September, 2006Posted by varoom in Marketing Plans.
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An important part of any business is the channel through which your product is delivered to market. This “sales channel” has to add some value for you, if not, why have them work for you? Every channel has its costs, in commissions, in investment from you in training, in promotional terms (you have to promote them as your channel) and in effort you have to take in order to work with them.
Your sales channel must identify and service your customers, taking orders, providing basic support, interfacing with the customers and generally delivering sales of your product. As far as your business is concerned it’s easier to deal with a single company than directly to the end market. This means that you can handle many more sales channels who in turn service a larger number of end customers than you could or would want to support.
When customers of your sales channels become very large and the costs of bringing them through your sales channel becomes significant then you can take them direct and accept the increased cost in your company of servicing them as you save channel costs.
Quite often the sales channels expect you to create the end market demand that they service. What this means to you is any promotion you do, advertising, mailshots, internet promotions, press activities all must specify your preferred sales channels or contact a central service which allocates the leads to the most appropriate channel.
Some sales channels have a customer base and a market image which cam be of use to your business, your product benefiting from placement with a leading distributor.
When developing your business plan you need to take account of the market channels and assess if the normal routes to this market suit your product and if you want to fall in line with the norm or take a new route.
The costs of sales need to be accounted for in your business model, do your margins allow for commission, what will the cost of handling each customer sale be and how can you service the customers?
Competitive Analysis 1 September, 2006Posted by varoom in Marketing Plans.
Analysis of the other suppliers of similar products to your target marketplace, sometimes called competitors, is an important task providing some key benefits to your marketing planning process. Textbooks often guide you through product analysis, market share, strengths, advantages, opportunities and Threats (SWOT).
But why do we do this analysis? For two reasons, firstly in advance of development of a product this analysis can provide some clues to gaps in the market segmentation or weaknesses in the products on offer to the market, which in turn can provide a basis for a product development. Secondly it’s useful to carry out competitive analysis after product development in order to confirm if the competition has spotted the gap and modified their product or the market itself has changed. This analysis also may reveal some unique marketing advantage which may influence how the product is promoted or positioned in the marketplace.
In the rare occasion there is no competition, either because the market is new, or that the existing players cannot make money out this market segment, the competitive analysis can provide information on how your product can be price positioned.
Your core competences as a company should become a competitive strength that you should leverage, marketing your strengths can help position the product against the competition.
Competitive analysis from a customers’ perspective is also important. Sometimes it’s not a particular technical strength or weakness that reveals and opportunity but the image of the product. There are many cases where an inferior product with a top class image can win over a superior product. This analysis could reveal that creating a market image is more important in the competitive arena than stressing the features.
Potential investors will also value a good analysis of the competition and their image in the marketplace. One question will come very quickly is “how easy will it be for the competition to catch up”, or “how easy is it to duplicate your product features”?
In summary, you can learn a considerable amount from carrying out competitive analysis make sure you invest some time in this area.