Marketing
Secrets

The experts tell all!

Peter Spalton

Table of Contents

Cover Page

Title Page

Marketing covers all parts of your business

Marketing is a philosophy

1.1 Marketing is about customers

1.2 Marketing is definitely not selling

1.3 Adapt and adopt, learn and evolve

1.4 Customers need to be seduced

Identify markets

2.1 Find a gap in the market

2.2 Define your ideal customer

2.3 Understand how and why they buy

2.4 Look at who really makes the decisions

2.5 Know your strengths and weaknesses

2.6 Define your proposition and values

2.7 Research your competitors

2.8 Analyse market trends and forces

2.9 Estimate market size and potential

Create what people want

3.1 Identify features and benefits

3.2 Understand your competitive edge

3.3 Get the mix right to manage life cycles

3.4 Bundle and unbundle

3.5 Match perceived value and price

3.6 Use discounts and warranty wisely

3.7 Look at added-value and value-added

3.8 Create great packaging and design

3.9 Badge to reach new markets

Look where people buy

4.1 Think beyond bricks and mortar

4.2 Identify where your customers will go

4.3 Multiple channels will get you in

4.4 Use silent salesmen

4.5 Add affiliate schemes

Devise your promotional mix

5.1 “Shoot with a rifle, not a shotgun”

5.2 Grab their attention

5.3 Cover all bases

5.4 Design posters and advertising

5.5 Use the press and media

5.6 Create press releases and drip feeds

5.7 Connect to buyers at trade events

5.8 Network with movers and shakers

5.9 Use loyalty schemes

5.10 Always support your brand

Get on the Internet

6.1 Make yourself visible

6.2 Be a shop window

6.3 Write email newsletters

6.4 Build blogs and podcasts

6.5 Offer forums and portals

6.6 Use viral marketing

6.7 Set up third party schemes

6.8 Join networking sites

Make an achievable plan

7.1 Be clear about your ambition

7.2 Create a thorough long-term plan

7.3 Always know how well you are doing

7.4 Not all customers are equal

7.5 Don’t be afraid to adjust your approach

Jargon buster

Further reading

About the Author

Copyright

About the Publisher

Marketing covers all parts of your business

Most people think that marketing is mainly about advertising. A salesperson might regard marketing people as those who do the brochures and look after the website. But both views are only part of the picture, because marketing actually covers almost every aspect of a business.

I’ve been in marketing for 30 years and have worked as a brand manager, marketing director and freelance consultant in almost every type and size of business. And I’ve discovered that, although theory underpins what we all do, marketing is about innovation and the ability to learn from one’s mistakes.

This book has some classic marketing theory written in an easy way. I have split it into seven chapters with 50 secrets that cover all the practical aspects of marketing. You must read them all, even if you think they’re not all relevant to you. Be inquisitive and see what marketing people do elsewhere. Open your mind and ask yourself how each secret could work in your business.

 Marketing is a philosophy. You must get yourself into the habit of thinking like a marketing person. Open your mind and imagine how you could seduce your customers and outwit your competition.

 Identify markets. Everything starts with the customers and you must understand what makes them tick. To do this you need to be a bit of a clairvoyant and a psychologist, and to learn from experience.

 Create what people want. At the end of the day someone must buy something, otherwise you have no reason to be in business. You must create what people want so they will choose you above your competitors.

 Look where people buy. These days people don’t just buy from a shop or a salesperson. You must make sure that they can get your product wherever they would expect it to be available.

 Devise your promotional mix. There are literally hundreds of ways to promote your business and products. You must pick the tool that’s right for the customer at each stage of the buying process.

 Get on the Internet. You don’t need to be an Internet expert or be able to program a computer. But you must have an open mind and the imagination to see what the Internet could do for your business.

 Make an achievable plan. At some point someone will ask you to write down what you’re going to do and why. Planning is rarely fun, but it helps you to clarify your thinking and justify what you intend to do.

 When you’ve read these 50 secrets you’ll know more about marketing than anyone else in your organization. Then again, I’ve been in marketing for 30 years and I’m still learning!

Marketing starts with your customer and ends in profit.

Marketing is a philosophy

Marketing is much more than just advertising or PR. It’s a culture, a way of doing things that starts with a potential customer and ends up with a profit. In the middle are your competitors who are after the same customers and same profits. Your job, as a marketing person, is to use some proven tools and techniques to attack the competition and gain the customers. It’s about predicting the future and using your imagination.

1.1 Marketing is about customers

If you pick up any of the classic books on marketing, you’ll find a definition that goes something like this. “Marketing is the process where a company satisfies customer needs with a product and service at a price that generates a profit.”

But marketing can be seen simply in two parts. Firstly, you must be able to work out what your customers want, now and in the future, and design a product and service that they will buy. Secondly, you must be able to tell potential customers all about your products and convince them to part with their money.

So a marketing person needs a mix of analysis, guesswork and psychology. It also helps if you are creative, but that’s not essential, as you can pay someone else for creativity. Over the years, marketing people have devised some tools and techniques to help them think it all through. Traditionally they are known as the four Ps of marketing.

1 Product. You must be able to answer three questions about your product or service. Is it what customers want? How does it stack up against the competition? And when will it be out of date?

“The aim of marketing is to know and understand the customer so well that the product or service fits him or her and sells itself”

Peter F. Drucker, management guru

2 Price. What someone will pay is always a judgement, especially if you are the first in the market. It’s always better to price higher than you might initially think because you can always cut prices, whereas it’s almost impossible to increase them later.

3 Place. This is the marketing term for where your customer buys your product. These days, it can be very complicated, incorporating a variety of shop sizes and types, the Internet and mail order. You must manage all those different outlets, or places, so you don’t miss an opportunity to sell your products.

4 Promotion. There’s not much point in creating a product if nobody has heard about it. There are two vital questions. How will customers find out about our prod ucts? And will they have enough information to make a decision?

Fifty years ago, a company made a product and people bought it. Thirty years ago, companies had to sell their products. Today, companies must market their brand successfully, so that people trust them before they buy their products.

You must continuously evolve your products and services to match the changing needs of your customers.

1.2 Marketing is definitely not selling

Many people are confused by the difference between sales and marketing. Just remember that marketing people deal with markets that contain many potential customers, and they talk to them as a group. Whereas salespeople deal with a few customers and talk to them one at a time.

There is a lot of overlap between the two roles and this can sometimes cause conflict and misunderstanding. But it is essential that marketing and sales people work together and support each other to achieve the organization’s business objectives.

one minute wonder Make sure that you involve sales and customer service people as early as possible in all promotional campaigns. This eliminates hostility, misunderstanding and any feelings of things not being invented here.

 Marketing looks at what’s happening in the market. It’s important to assess market trends and the competition. These days, most forward-thinking marketing people also involve salespeople to help their understanding. This is because salespeople have an intimate knowledge of individual customers and competitors.

 Marketing creates promotional campaigns. This is to increase awareness of the business and its brand. Salespeople must be told what the promotions are doing and when they’re going to happen. Then sales can ride on the back of the campaign and generate additional business.

 Marketing prepares promotional material. This is to help potential customers understand what your business does. It includes brochures, presentations and your website. Salespeople should use these to describe the business and explain the benefits of your products to individual customers.

 Marketing works with sales. Together they create campaigns to generate enquiries from customers. It is essential that these campaigns support sales activities and objectives.

 Sales weeds out the time-wasters. Sales must identify those potential customers who are seriously interested in buying your products. It’s also their job to convince individual customers to make a purchase. Then salespeople will either take an order or the money.

 Sales and marketing work together on catalogues. Whether it’s with mail order, over the Internet or through third parties such as distributors and agents, marketing and sales must work together. In this situation marketing must support sales.

To learn more about selling, you should read the Selling Secrets book in this series.

Marketing approaches broad groups of potential customers; salespeople talk to them individually.

1.3 Adapt and adopt, learn and evolve

Marketing people love change because it means opportunity. Markets, the competition and technology never stand still, and you must embrace this culture of constant change. Those businesses that didn’t have been forgotten.

Can you name any company that used to make slide rules or steam cars? The crossbow was destroyed by the musket, the musket by the rifle, and the rifle by who knows what.

The best marketing people understand that they can’t stand still because the world does not stand still. Their philosophy is one that embraces change with open arms. If you want to be successful in marketing, you’ll need to do the same. That means never being satisfied with the way things are, but instead constantly looking at how things could be improved, particularly in relation to the competition.

one minute wonder See what happens when you buy your main competitor’s product. Was it easy? How was their service compared to yours? If you’re not ahead, you need to change.

“Marketing takes a day to learn. Unfortunately it takes a lifetime to master” Philip Kotler, marketing guru

 Always keep an eye on your competition. Regularly look at what your competitors are up to. Analyse what they’re good at and what they’re not. Adjust your own approach and play to their weak spots.

 Buy your competitors’ products. You must buy their products and give them to your design people. Ask them what’s good and what’s bad about them. Try to understand what they’re doing now and predict what they’re going to do next year and the year after.

 See what’s happening in your industry in other countries. Some countries are way ahead of others. See what they’re up to because it’s where your market might be in two, three or five years’ time.

 Look at other industries and see how they do things. Adapt their successful ways to your business. Most companies in the same industry do things in a similar way. So a different approach may give you a unique advantage over your competitors.

 Attend seminars and workshops. Go to at least two workshops a year on sales and marketing. Network with the audience and find out what works well for them. Even if you don’t learn anything, you’ll remember something good that you’d forgotten.

 Regularly review your own performance. Don’t be afraid to admit that something didn’t work as well as you’d hoped. Remember, it’s always better to do something, than regret doing nothing.

The secret of success in marketing is to keep learning and evolving the way that you do things.

Change means opportunity. Embrace it and try new things.

1.4 Customers need to be seduced

Fifty years ago people went to the local shops for most of what they needed. The shopkeeper knew them and took time to talk and ask about their family. In those days, shopping was relaxed and shopkeepers were usually friendly.

Gradually, though, the small local shops disappeared as the large chains and supermarkets took over. Shopping then became impersonal. It became transaction-based: you went to a shop, bought what you needed and left. As it didn’t really matter where you shopped, you weren’t loyal to any particular retail outlet. After all, you could get your favourite brands anywhere. But, at the start of this century, companies realized that they needed to engage with their customers to keep them coming back. Loyalty, lifestyles and aspirations became the buzzwords of the day in marketing.

 The Apple example. In the early 1990s, Apple was a small, specialist computer company. Its customers were loyal and most of them worked in the fashion, design and media industries. But, in October 2001, the company launched the iPod, which was aimed at young people. It became a lifestyle purchase and a statement of freedom.

one minute wonder Think of a company that seduces you with it’s advertising and products. What is it about them? Now consider how you could do the same to your customers.

Two years later, the company introduced iTunes, which added a recurring revenue stream. Within seven years Apple had sold 150 million units and transformed the company and the entire music business.

 The Emirates example. In the 1980s airlines were totally transaction based. If you wanted to fly, you bought a ticket and that was it. But Emirates broke the mould when it decided to sell the sensuous experience of flying. They changed their slogan to “Fly Emirates, keep discovering”, and put their 16,000 cabin staff in designer uniforms. With minimum cost, they dramatically increased the perceived value of flying Emirates. Since then, the company has won 400 industry awards.

 The Red Bull example. In 1987, a European company launched a sports drink called Red Bull. Its marketing was aggressive and it sponsored sports and extreme activities: Formula 1 racing, snowboarding, surfing, skateboarding and windsurfing. It is clearly aimed at young men and now produces a monthly magazine called the Red Bulletin, available online, and free in many bars, clubs and hotels. With its memorable slogan, “Red Bull gives you Wings”, today the company sells more than 3 billion cans a year around the world.

All these companies have one thing in common. They’ve each found out how to seduce their customers effectively. You must learn how to do the same. It starts by clearly understanding what you do and what you want your customers to feel about you. Find out more about this in Secrets 2.2 and 5.10.

Learn to seduce your customers so that they keep wanting you.

Identify markets

Your market is vital. It’s the group of potential customers who will use your type of product. So you must understand who will buy your product, why they will buy it and how they will make the decision. This is where you need to be part psychic, part psychologist. You also need to realize that marketing is like warfare, and you will probably need to use guerilla tactics. This means you must spot opportunities and attack little bits of the market, one at a time.

2.1 Find a gap in the market

Do you start with a product, an idea or a skill? Whatever your answer, you must find a gap in the market to focus on. You’re not likely to succeed if you go head on against a business that is already established. You must find a group of potential customers that the main players have ignored.

Think about how Nintendo spotted a gap in the crowded market for computer game consoles. It chose families, rather than teenage boys, and the Wii has become one of the marketing success stories of the last few years. A gap in the market is called a niche. It must be large enough for you to make a reasonable profit and small enough for you to dominate it.

case study AT Cross is famous for its gold-plated writing instruments that every up-and-coming executive wants to have. Rather than attacking the whole stationery market, and making every sort of pen and pencil imaginable, it has chosen to focus on the high-price niche, and has added business bags and gold-plated accessories, such as cuff links, to its exclusive product range.

 Product niche. Your product could have a unique feature that appeals to a particular market group or application. Dyson’s Cyclone vacuum cleaner is an example of this type.

 Location niche. This is usually a service, such as a local convenience store that’s open all hours, or an airport departure lounge shop.

 Customer niche. Find a group of potential customers that have similar characteristics or interests that you can easily identify. The grey market, for example, refers to people over 60. Extreme sport enthusiasts form another market niche.

 Low price niche. You could decide to reduce the quality or the number of your product’s features and sell it at a reduced price. This is what the food suppliers do with their ‘own-label’ products.

 Luxury niche. You can price yourself into a market with a high quality, stylish and expensive product. The most important aspect of this niche is to have the right image and reputation. Honda created a new brand, Lexus, to move into the luxury niche. It also built a new dealer network to distance itself from the existing Honda brand.

If you already sell a product in a particular market niche, you need to see if there are any other niches where it would also sell. Often you can make a simple modification and sell it into another group of customers. There’s more about this in Secret 3.4

You must find a niche in the market, without too much competition, where you will sell enough to make a profit.

2.2 Define your ideal customer

The work that you do to define your potential customer is probably the most valuable time you spend in marketing. Traditional marketing people call this segmentation, and they will put a lot of time and energy into getting it right.

Let’s assume that you have an idea for a product and need to decide who it’s aimed at. The best way to do this is to have a meeting with two or three people who know the product and the type of customers you’re interested in, then take these four simple steps.

1 Start with demographics. If you are selling to consumers, this is their age, gender, income bracket and geographic location. If you sell to businesses, it’s their size, industry and the region or country in which they are based.

case study In the 1950s, Parker turned the pen business on its head when it decided that its ideal customer was someone looking for a gift. Parker Pens put more money into the packaging, so their products became presents. These days, we have specific pens for pre-school children, school children, students, office workers and professionals. And nobody actually buys a pen for themselves.

2 Look at buying habits. Will customers be heavy users and buy your products and services every day, week or month? Or will they buy only once every few years? For example, office workers in the city may buy coffee from the same place every day, whereas, at the other extreme, people tend to buy a car only every few years and a house just three or four times in their life.

3 Consider who will purchase the product. And how they will pay for it. For example, baby clothes are for babies but they’re bought by parents, grandparents and friends. Will people pay for your product with cash or credit card? Or, in the case of a very expensive item, will they need a bank loan? If so, you might like to approach a bank so that you can arrange loans on behalf of your customers. That would be a great added-value service.

4 Think about the motives for buying your products. Is it a lifestyle purchase, where customers buy to feel good or improve their status in their community? Or will they buy to solve a problem, save time or reduce costs? And think about whether they will make a decision based on quality, service or price.

When you have finished, you should have a picture of your ideal customer. Then you need to consider how they might find out about you, where they would buy your products and the size of the market.

The time you spend on clearly defining your ideal customer is never wasted.

2.3 Understand how and why they buy

This is where you need to be a bit of a psychologist. There are two aspects to this. You have to understand why people would want to buy your type of product. And, you must know why they would choose yours rather than one of your competitor’s.

Think for a moment about what people actually do before they part with their money. Whether you realize it or not, they think through four steps, usually without knowing it. We call these the buying stages.

 Need or want stage. This is when a person decides that they want or need something. It might be that they want to save money or time, or they might want to gain something, such as money or status. Equally, they might want to avoid something, such as hunger, thirst or having to clean the house on their hands and knees.

 Knowledge stage. They search for information to help them decide which one to buy. For some products, they will look at advertising, brochures or reviews in specialist magazines. For other, more basic products, such as bread, they’ll probably just look at them on the shelf.

“Look at markets through the other end of the telescope – not the lens of what you want to sell, but the lens of what people want to buy”

Gary Bencivenga, American celebrity copywriter

 Preference stage. Then they actually make a decision and choose the one they will have. Even though they might have thoroughly researched the product, they will often subconsciously decide on things like colour, quality, price, style or what’s in fashion.

 Buy and justify stage. After they have made their decision and bought the product, they will then justify to themselves that they’ve made the right choice. They will say things like “it was the best,” or “it was reduced in price”.

Some people make almost instant decisions because they’re known as decisive. Some need lots of information and facts before they can make a decision. They are methodical and they just need time. Then there is another group, who take almost forever to make a decision. These are cautious and you will need to encourage them to make the decision by telling them who else has bought your product.

In Secret 5.3 you will see which sort of advertising and promotion you must do for each stage of the buying process.

You need to be a bit of a psychologist to see how people make a decision and why they would buy your product.

2.4 Look at who really makes the decisions

If you’re alone and want a sandwich or coffee, the decision is fairly easy. But, unfortunately, most purchases involve many people, especially if it’s a product or service for a business.

Even something that at first sight appears to be simple can involve more than one person. Imagine a mother in the shopping mall with her two children. One of them says, “I want a sweet.” That child is known as the initiator and is also the consumer. The mother is the buyer. The other child has a vested interest in the decision because they know that they’ll get a sweet too. That child is a stakeholder. If the purchase is not a sweet but something more expensive, the other parent may be involved in the decision process also. We give the people these names to help explain their role in the decision process of making a purchase.

 Initiator. The person who first suggests the idea. In the example above, this is one of the children. If the mother had made the suggestion by asking, “Would you like a sweet?”, she’d be in initiator instead.

 Consumer. The person who actually uses the product or service. This is the child in the example above. But, if you wanted to buy a computer network for a business, it might be a whole team of people.

“Most sales are lost because the salesman presented his product before he knew what motivated everyone else involved”

Gary Bencivenga, American celebrity copywriter

 Influencer. A person or group of people whose views and advice have a bearing on the buying decision. In the example of buying sweets, this could be a dentist who might suggest that sweets are bad for the teeth.

 Money man/woman. The person who has the money or signs the cheque. They have the ultimate authority to say, “No, we can’t afford it”.

 Buyer. The person who actually buys or pays for the product or service. In business these are the people who check the contract and look at the viability of the supplier in the long term.

 Stakeholder. A person or group of people who have no influence over the decision, but are interested in the purchase.

The more expensive the product, the more people you’ll tend to find involved in the decision. You must identify the individuals by name and work with your salespeople to make sure that you influence them correctly. It’s the little things that matter, so you must give the right kind of information to the right person. For example, the buyer is not interested in the technical merit of your product, they are interested in the status of your company. The money man is really only interested in making sure that they get value for money.

Purchases are never as simple as they seem, and there can be many people involved in even an easy decision.

2.5 Know your strengths and weaknesses

The best marketing people know exactly what they’re good at, and what they’re not so good at – their strengths and weaknesses. You also need to have an understanding of the strengths and weaknesses of your competitors, and know what your customers think of you and your products.

Your customers’ views are much more important than your own. I’m sure you think that you have the best products in the world, but actually it’s their perception that matters most. And you must match your product and customer service to their expectations, based on your marketing material.

one minute wonder Phone your customers immediately after they have bought something from you. You will then get their instant reaction to how the purchase went.

 Product. Ask customers how the features, quality and reliability of your product stacked up to what they had expected.

 Price. Did they feel that they got value for money? Find out if they got more or less than they had expected.

 Availability. How easy was it for them to find out the information they needed when choosing which product to buy? How easy was it for them to buy it? Was it in stock?

 Service. What did they think of your service? Was it friendly, efficient and did it match what they had anticipated?

Many businesses employ someone to phone customers; others use the post. A postal or email survey can gather more information, but it won’t capture the customer’s immediate feelings.

You also need to talk to your prospective customers, particularly those who have never purchased anything from you. Ask them if they’ve heard about your business and what they think you stand for. This is called your company’s level of awareness.

Make a list of what you think you’re good at and a list of what you’re not so good at, and add your customers’ views to the lists. Then look long and hard at each of the weaknesses, and work out how you can address them. Ideally, you want to turn them around completely, so that they become strengths.

Know what you’re good at and not so good at, so you can play to your strengths and fix your weaknesses.

2.6 Define your proposition and values

Once people have decided that they want to buy something, they tend to choose the business that closely matches their own lifestyle and values. You need to define what you do and what you stand for as a business.

You need a very clear statement that is called your proposition. If you’re not a household name it needs to say what you do. If you are a well-known brand you can get away with a slogan, such as “We try harder”, from Avis, or “The ultimate driving experience”, from BMW.

At first sight, it seems very difficult to create your proposition and brand values. But your proposition should just say clearly what you do in one sentence. One way is to fill the gaps in this statement: we supply (customers) with (product) that will (benefit). For example, “We supply commercial vehicle manufacturers and repairers in South America with cooling systems that will cope with the rugged conditions and harsh climate”.

Your brand values are what you want your customers to feel when they see and interact with your business. You need to match these to your market, though. For example, it’s no good trying to be a young and energetic business if your market is elderly people.

one minute wonder Visit the food shops in your area and look at their displays. What colours do they use? What’s the layout like? What sort of people shop there? Try to decide what their brand values are, and which is their target group of customers.

Think which one of these best describes your business. And is it what your target customers want?

 Reliable and stable. The banks and insurance companies must come across as safe and secure.

 Exciting and energetic. BMW and Red Bull have created energetic brands with emotional appeal.

 Innovative and leading edge. Brands like Audi, Apple and Sony promote their leading-edge technology.

 Creative and stylish. Think about Gucci and Ferrari.

 Sophisticated and high-status. Brands such as Rolls Royce, Dunhill and Rolex say that you’ve arrived.

 Value for money. Companies like Kia, Skoda, Hyundai and Asus Computers push value for money.

People today want to feel engaged with a company and be proud to buy its products. Your proposition and your brand values show this and form your promise to customers. Just make sure that you never break this bond of trust.

You must be able to state clearly what you do and what you stand for in fewer than 35 words.

2.7 Research your competitors

Every business has competitors. And actually it’s good for everyone, as the combined spend on promotion and advertising increases the size and growth of the market. Only the very largest companies can hope to cover the whole market and all the niches within it. You must understand who your competitors are and how you stack up against them.