Right STP is the Right Start to Your Growth Story!

This is where all the marketing begins. Before starting the work on any strategy and allocating budget to different ways and means of marketing your product we must divide the entire market into segments.

Choose the segment which suits you the most, which then becomes your target market.

Now you need to think on how best can you market your product to target the most specific customers in the chosen segment.

STP is one of the most popular models and it’s a must understand model before you draft any communication or plan advertising for the product. Your marketing tactics will be much more efficient and fruitful if you follow the STP Model.

In marketing, if you want to get high value for every rupee spent its imperative that you get specific. “SPECIFIC IS TERRIFIC” seems extra right when it comes to advertising and marketing. When I started my business in Tshirts Printing, Awards & Corporate gifting; we made a mistake of thinking that everyone needs Tshirts & gifts and hence all the people are or can be our customers. 

Result:

Ø  We choose too wide filters in Facebook advertising. The budgets were gone too fast and we didn’t get enough business from there. Our customer acquisition costs overshoot and went beyond the revenues, forget the profits.

Ø  We started accepting all size of orders and spreading ourselves too thin. Our hands got full with pea nuts and had no space for almonds.

Two years later when we made a conscious decision of targeting only the corporates and saying no to everything else – our revenues really grew.  

Another mistake which we made was – wrong positioning. Incidentally my company got positioned as retail personalized gift store. We realized that serving all is serving none. We must be specific and do the home work with STP.

STP focuses on commercial effectiveness, selecting the most valuable segments for a business and then developing a marketing mix and product positioning strategy for each segment.

Through segmentation, you can identify niches with specific needs, mature markets to find new customers, deliver more focused and effective marketing messages. You can use any of the below criteria for segmenting your market:

1.   Demographics – Age, Gender, Income, Education, Marital Status, Language they speak, having kids, no kids etc. This explains WHO the customer is.

2.   Psychographics – Here it’s all about emotions, behaviors and personality of the prospective buyers which becomes the basis for the segmentation. This explains why the customer buys your product. Gathering the psychographic data is much more difficult than the demographic data.

3.   Lifestyle – This refers to hobbies, interests, vacations, entertainment & other recreational activities liked by people. E.g.  home gym equipment sellers will target gym lovers.

4.   Beliefs and values – These maybe religious, political, economic or socio-cultural etc.

5.   Life Stages- this may also be a part of demographic but for some businesses this becomes very important and they may segment solely on the basis of life stage. I know a lady entrepreneur in tour & travel in Delhi and she focuses focuses on travel of people who are more than 50 years of age.  

6.   Geography – This can be filtered by country, state, city, village, area or even climate.

There can be few more bases on which you can segment the market but Demographic, Psychographic, Geographic and Behavioral are the four most commonly used parameters.

Of course the segment which you decide must be of good size. E.g. there is no point in selling something super specific only to the people of age 100 years or more. You can even go for multiple segments but the offering for them will be different.

Positioning map comes the last in the process. It needs two variables to position your product or service. By following the STP to the core, you can grow your business at a fast pace as the speed of customer acquisition becomes faster as you reach to the right customers with right messages. In Positioning we mainly focus on sales channels and product presentation. 

What are Push and Pull Strategies for Amazing Success?

All the companies (B2C & B2B) engage in a range of strategies to get their messages & products across to the customers. One of the many ways to categorize these strategies is Push & Pull or Outbound & Inbound Strategies.

Simply put, push means pushing your product to the customer whereas pull means pulling the customer to your product. Push mostly happens via sales channels by giving incentives to the sellers whereas pull mostly happens by attracting the customers through heavy advertising. In pull consumers actively seek out the brand/product because of high top of the mind recall value and reputation. E.g. Apple iPhones doesn’t need to push the product to the customers. It’s always pull on apple products. Push gives quick results in terms of sales whereas pull is slow but establishes strong brand recognition in the market.

Examples of Push Marketing:

-        -> Face to Face Sales in showrooms

-        -> Point of Sales Promotion to attract the customer for purchase

-        -> Trade show promotion

-        ->  Offering free rides, free samples, free demos

-        -> Cold emails with call to action buttons offering heavy discounts etc

-        -> Affiliate Marketing  

Examples of Pull Marketing:

-        -> Advertising & mass media promotions

-        -> Word of mouth referrals

-        -> Social Media Marketing

-        -> Search Engine Optimization

Like any other marketing strategy – Push & Pull also require planning and consideration of the audience and marketplace. Each tactic must be monitored, reviewed and revised on regular basis. To decide which method best fits your business, think about how you want to approach consumers and what is your objective. If your objective is to quickly clear the inventories or improve the sales – push is the way; if you want to build brand and are ready to wait for the customers to become aware of your brand and come to the point of sales asking for your product – pull is the way. Mostly pull is best fit for the products which sale around the year whereas push the best fit for seasonal products like products related to rains. It’s just because of the slow nature of the pull and the seasons are short.  

You can even use push and pull together. In fact, most companies apply a balance of both the strategies. They advertise heavily talking about the benefits of their products and give incentives to the distributors or retailers (including discounts or even credit) for buying more in expectation of high sales due to massive advertising in print and multi-media.

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What is the AIDA Model in Marketing and Why It Is So Important?

In 1898 Mr Lewis wrote a beautiful definition of good advertisement, “The mission of an advertisement is to attract a reader, so that he will look at the advertisement and start to read it; then to interest him, so that he will continue to read it; then to convince him, so that when he has read it he will believe it. If an advertisement contains these three qualities of success, it is a successful advertisement.”

In other words, copy is only good if it attracts attention, generates interest, and creates conviction, in that order.

This became popular as AIDA model and has shaped the views on marketing and sales strategies for over 100 years. I believe it’s a very practical thing which can help you define the goals of your marketing campaigns and pull or push customers to purchase action or to put differently – it’s a proven model to convert strangers into customers.

AIDA is an acronym which stands for Awareness, Interest, Desire & Action. This is a logical sequence for making any marketing or sales strategy work by making the customer traverse the journey from being aware of your product to actually buying it.

Awareness: How do you make the prospective customers aware of your product or service? Personalization and guerrilla marketing are two perfect ways to master this step of capturing the attention or making the customer aware of your product/service.

Interest: How do you gain their interest in your product or service? 

Desire: What makes your product or service desirable? It can be cognitive (giving features, results or any other information which customers want) or affective (feeling) but the customer should feel intensely about the product. It takes the purchase away from the need towards the want. 

Action: What are the calls to actions? Finally what makes the customer shell out the money and carry your product or service home?  Good advertising should elicit a sense of urgency that motivates consumers to take action immediately. One commonly used method for achieving this goal is making limited time offers (such as free shipping) or discount to first n orders etc.

A major deficiency of the AIDA model and other hierarchical models is the absence of post-purchase effects such as satisfaction (or dissatisfaction), consumption, repeat patronage behavior and other post-purchase behavioral intentions such as referrals/recommendations or participating in the preparation of online product reviews. Just to cover this, post purchase behavior of the buyer, a letter R for ‘Retention’ has been added and you may as well hear the model being called as AIDAR Model.

  

What Is Marketing Mix and Why It Is Important for Growth?

A marketing expert named E. Jerome McCarthy created the Marketing Mix /4Ps in the 1960s. This is a basic thing for marketing professionals in theory but many entrepreneurs get it wrong on the ground while executing the plan and face failure. This article will help you understand the basics of the Marketing Mix. If understood and executed well, you can deliver what your customers want, when and where they want and at what price do they want. Bingo … that’s the recipe for success in business. Let’s get started.

The marketing mix is a foundation marketing model for businesses. Broadly it refers to the set of actions or tactics that a company uses to promote its brand or product in the identified market. The 4Ps – Product, Price, Place & Promotion, make up a typical marketing mix.

Product: refers to the item actually being sold or service being rendered. The product or service must deliver a minimum level of performance; otherwise even the best work on the other elements of the marketing mix won't do any good. The product can be intangible or tangible as it can be in the form of services or goods.

Price: refers to the value that is put for a product or service. It depends on costs of production, targeted segment, ability of the market to pay, supply - demand and a host of other direct and indirect factors. There can be several types of pricing strategies, each tied in with an overall business plan. Pricing can also be used as a demarcation, to differentiate and enhance the image of a product or service. Generally adding elements of service to the base product is a great way to charge some premium or differentiate your product. E.g. FREE installation with the geyser or AC will definitely attract more customers. Even the assurance of quality in terms of guarantee can help you charge more.

Place: refers to the point of sale. In every industry, catching the eye of the consumer and making it easy for her to buy it is the main aim of a good distribution or 'place' strategy. Retailers pay a premium for the right location. In fact, the mantra of a successful retail business is 'location, location, location'.

Promotion: this refers to all the activities undertaken to make the product or service known to the user and trade. This can include advertising, word of mouth, press reports, incentives, commissions and awards to the traders. It can also include consumer schemes, direct marketing, contests and prizes. Promotion boosts brand recognition and hence sales. Promotion compromises of – Sales Organization, Sales Promotion, Advertising & Public Relations.  

All the elements of the marketing mix influence each other. They make up the business plan for a company and handled right, can give it great success. But handled wrong and the business could take years to recover. The marketing mix needs a lot of understanding, market research and consultation with several people, from users to trade to manufacturing and several others.

Later on with the advent of Services Marketing as a subject 3 more Ps – Physical Evidence, Process & People.

With everything available at just the click of a mouse, today’s consumers are more empowered than ever, with greater expectations for brands to meet their requirements with relevant, easy-to-use content, and to provide a product offering that meets expectations.

Marketing is must to sell your products or services and succeed in this competitive era. In the quest to grow, all entrepreneurs do something or the other to spread the word. Figuring out the right marketing mix before you get started on marketing can help you save efforts, time and money.

The marketing mix breaks down what’s needed to make a business work, but success isn’t attributed only to modeling theory templates like Marketing Mix. It’s attributed to the depth of insights used to develop each stage and the excellence of execution.

Businesses that can deliver on what their consumers truly want, and showcase how their brand will enrich their lives, will see the best results.

Top reasons of why most of the startups fail?

Start ups are exciting. More start ups mean an economy which is fertile for growth and a land full of dreamers. 137,000 Companies get started everyday in the world of which 90% i.e. 123,300 companies get shut down in the very first year. In India alone, 107 million people try to establish 85 million businesses every year. How many of these entrepreneurs really succeed? Very few! 

Most of the start ups fail to make a mark and die even before they pick up and start walking - you are right - I am pointing to first year death of start ups. In my opinion there can only be one of the two reasons behind this pre-mature death of any start up:

ONE - Product is not good.

TWO – Marketing is not good.

If the product is not appropriate – I can’t help. I think no one can help here. You, as an entrepreneur need to conceive and give birth to your baby called product. No matter how difficult or complex the process is; you need to take the pain yourself. You are the mom and dad both to your product.

But if the marketing has not been done properly; nothing to worry. It’s not rocket science. You just need to sing the song more melodiously and louder. Raise the voice, shout, cry, make some noise and get heard. If you feel you are already shouting on top of your voice and there is no scope for raising the volume – shout more often and shout at more places. If it’s still not enough get others along who can shout for you.  

Ah yes, knowing some tips and tricks before beginning can definitely help you in saving your hard earned (or your investor’s hard earned) money. Having some experienced & knowledgeable minds contribute to your Marketing Strategy can significantly shorten your learning curve and speed fast your growth curve.