In the first installment of this series we discussed the importance of developing a unique selling proposition (USP) and how it can contribute to the success of a small manufacturer’s overall marketing and sales strategy. In this blog post, we focus on developing the right marketing mix to communicate the value of your products or services to your target market by:
- Differentiating yourself from the competition
- Understanding perceived value
- Properly segmenting your audience
Marketing and Sales: The Big Difference
You have probably heard of marketing and sales being bundled together and considered one-and-the-same. While cohesion of both departments is crucial for growth and increased revenue; the functions of sales vastly differ from the responsibilities of marketing. Marketing is responsible for conducting market research to determine your ideal customers, crafting the appropriate messages,materials and potentially generating leads for the sales team.
While the foundation of marketing is market research this is only one function of a marketer’s responsibilities. Small and medium-sized manufacturers may not have the bandwidth to spend a substantial amount of dollars on extensive market research, but there are other ways you can find out about your target market including accessing industry trade groups and local chambers of commerce.
Customers often go for the cheaper product or service unless they feel there is a reason to spend a few more dollars. Unless you are the low-price leader, what makes you different? This is where marketing comes in to design the most accurate message, incorporating your USP and helping you outshine your competitors. Increasing the perceived value of the products or services you offer will increase the likelihood of your prospect paying a higher price. Perceived value resonates in many areas, but specifically in the four Ps as discussed below.
You also need to realize that not everyone in your target market is the same; you need to segment your market into smaller sub-groups. Marketers are then able to create messages specific to that sub-group and sales can tailor their presentations accordingly depending upon which product or service makes the most sense for that target market or set of customers.
The Marketing Mix
Your marketing mix is comprised of the 4 Ps: Product, Price, Placement and Promotion, but there is sometimes a fifth P - People. This additional element to the marketing mix is important because it is people who are the policy and decision makers. Manufacturers, and marketers alike, need to think of the internal people (employees), and the external people (customers), that affect the pulse of the organization. All of the elements are used to develop and market products and services to their intended audience. Below is a description of the 4 Ps:
- Product: what is it and its presentation (packaging)
- Price: what will the price be based on the need, demand and willingness of your target audience to pay
- Place: where will you sell it (online, in-store retailer, dealers or distributors)
- Promotion: how will you build brand awareness (internet ads, print advertising, yellow pages, catalogs, direct mail, online directories, email marketing)
The Sales Factor
Marketing uses all their resources and knowledge to craft compelling messages, incorporating the unique selling proposition for sales to use and re-iterate when selling the product. Sales should aim to address the customers’ pain points when engaging them to show how the product meets their needs so they can easily close the sale. Theoretically, this is how these departments are designed to function; however the reality of it sometimes means a blending of the two functions. Especially for small manufacturers with limited staff. For the best results, your manufacturing organization should adhere as best it can to a separate marketing and sales structure.
Driving Growth through Marketing and Sales
Through the cohesive efforts of marketing and sales, your manufacturing organization will be able to reach new prospects in your current market by building awareness, and hopefully stay in touch with current customers. This involves being very strategic in where you place your resources including employees, product enhancements, investments, etc. By communicating your unique selling proposition, you are setting the stage to give prospects and returning customers a reason to buy.
Over time if you do increase your revenues, you will be able to explore different markets. This can give you added exposure, but it can be the most costly, unpredictable and risky option. However, the upside of entering new markets may include the introduction of new products or enhancements to products for that market. You may find that any new products would also appeal to your current customer base. If you do decide to enter into a new market, keep in mind that you will need to explore different channels, competitors and different customers.
Your manufacturing organization should be building lifetime relationships with your customers using email, your website or social media. Through these channels or others, you can interact with your customers regularly and invite them to check out what’s new. Find ways to remind them of why they selected your company to purchase from in the first place.
Preparing for Quick Sales
While marketing and sales have independent functions, they need to work in conjunction with each other to help increase sales revenue. The foundation of marketing is market research to understand the target market or your customers. However, there is a whole range of functions marketing handles. Each function is meant to communicate a clear and value driven message that encompasses the 4 Ps for the target market. Marketing then crafts the messages and materials and provides that information and knowledge to the sales team to increase their chances of closing a sale.
In the third installment of this series about sales and marketing practices, we will discuss how you can turn these marketing fundamentals into quick results. It will focus on how to best penetrate your past and current customers’ buying habits to develop a specific and targeted message for them.