WEDNESDAY, MARCH 27, 2019
TrainingMarketing Fundamentals The Biggest Marketing Mistake of All

The Biggest Marketing Mistake of All

This is probably the most important lesson of all!  It is so critical that failure to grasp this basic concept could ultimately lead to your business failure (or a lot more pain than is necessary).

Introduction

In this module we look at the fundamental mistake that most businesses make when they first start.  Often this puts them on a path to failure and curtails their chances before they have even started.

If you already have an established business it isn’t too late to implement changes to put your business back on track for success.

At the end of this module you will have a good understanding of how successful businesses stack the odds in their favour.

Marketing is not about:

  • Writing long marketing plans
  • The latest tricks
  • Designing brochures and websites
  • Tactics
  • The latest marketing software

Marketing (as the name suggests) is all about the market, more specifically, serving a market.  We look at serving markets and why we use this specific terminology in the Serving Markets module.

“duh! I knew that” I hear you thinking.  So why is it that so many businesses don’t start by looking at markets, they start the wrong way.

Starting the Wrong Way

How do Most Businesses Start?

Most businesses are started with total disregard for the market, instead they are started by someone with a product idea first.  This can be illustrated with the following case studies:

  1. Rob, a web designer who decided to launch a web design business – he was technically very good at building websites, but he gave no thought as to who he was going to sell to
  2. Amy, a creative artist decided to open a shop to sell her own stuff – she was a very talented artist, but she didn’t know if enough people would like her stuff?  She didn’t know which market she was targeting, or how she was going to reach them?
  3. Sue, a pet lover who loved her pets so much she opened a pet shop, she had great stock, but was it in the right location, she didn’t know who was going to shop there?
  4. Ray, a sales manager develops a product, all his friends and family told him that it’s great, but who is going to buy it?

But why is this a problem?

The problem with this approach is that your chances of success are massively reduced.  If you don’t know what market you are supposed to be serving, you won’t be able to answer any of the following questions:

  • Is there a market for my product or service?
    You may have a product that nobody wants to buy.
  • Is there enough demand for my product or service?
    You may find that only a very small number of people want to buy your product or service.
  • Who am I competing against?
    You may find that the competition is just too strong
  • What do my target customers want?
    If you don’t know what your customers want, how can you possibly expect to sell them anything?

Let’s view this in relation to our examples

  1. Rob, a web designer who decided to launch a web design business:
    Without market knowledge, Rob focused on the product itself, he didn’t know if this was what people wanted, he didn’t know if his offering was competitive, he had to adapt his product to every person who came along and was therefore unable to grow his business.  Rob is still toiling away building websites for small businesses in the local community, but stuggles to make enough money even to take a holiday each year.
  2. Amy, a creative artist decided to open a shop to sell her own stuff:
    Without testing the market first, Amy opened a shop in an area where rents were affordable (she couldn’t afford a high street location).  The location was on a rather run-down road, with little passing trade.  She was open for six months, in that time she never made a profit, she is now back at her job paying off the loan she took to fund the shop.
  3. Sue, a pet lover who loved her pets so much she opened a pet shop:
    Sue opened the pet shop on a small, quiet suburban high street, interestingly less than 2 months since another pet shop had closed on the very same street.  The local market was too small to support her shop, most locals didn’t visit the high street, instead they bought their supplies from the large supermarkets and online.
  4. Ray, a sales manager develops a product:
    Ray had a brain wave one day, he had a great idea for a product, he spent the next two years and thousands of dollars developing the product idea and got it manufactured, all his close friends and family were very supportive, but when he came to sell the product, nobody wanted it (not even his family and friends bought one).

These aren’t isolated cases, this is how most small businesses end up, either closed or struggling on making very little profit, but this can be avoided by paying more attention to the market you are serving.

Starting the Right Way

What is the right way to start a business?

In the majority of cases the right way to start a business is to select the market you wish to serve.  Doing things this way around has a number of benefits:

  • You know the potential size of your target market before you start to develop your product or service or head down a path of no return, you may choose a mass market or a niche market to serve.
  • You get to learn what your market wants to buy, before you decide what you want to sell to them
  • Your product development is streamlined because your market tells you what they want to buy
  • You get to avoid costly mistakes of developing a product or service that nobody wants to buy

There are exceptions to this rule, every now and then a product or service so revolutionary comes along that nobody wants because they can’t even imagine it, a good example of this would be the iPod.  These however are quite rare.

But what about my great product idea?

It is hard to turn your thinking around, it is natural that we want to start with things from our point of view, our service, our product.  We must fight this urge and look to the market to help shape our business, whether you are a new start-up or a business that has been running for several years and needs a fresh approach.  The majority of businesses are successful through using one of these approaches:

  • Solving a need that the market tells them exists, or solving a problem that you yourself has that many others in a market share (Dyson – solving the problem of poorly suction from bagged vacuum cleaners)
  • Taking an existing product or service and making it / doing it better (Virgin – taking trans-atlantic flights and making them better)
  • Taking an existing product, service or idea and bringing it to a new market

It is possible to ignore this and try and educate a market about your product or service to try and make them want it, but without the marketing clout of Coca Cola you may find this a difficult option.[hozbreak]

Actions

  • Write down the market or markets that you currently serve
  • For each market make notes on the following:
    • What is the size of the market?
    • Who are your main competitors in the market?
    • How are others selling into this market?
    • Who are the market leaders?
    • What are people buying?

Next:  How to pick a market.