MERCADEO

CONTENTS
No product sells itself. Your

Marketing Overview
business needs a well thought-out
marketing plan in order to
succeed in the marketplace.
Conducting Market Research
Competitors
Products and Services
Advertising and Promotion
Your Marketing Campaign
Marketing and Advertising

Methods
Producing Marketing Materials

Marketing Overview
TOPIC OUTLINE
MARKETING OVERVIEW
DEFINING YOUR BUSINESS
MARKETING SWOT ANALYSIS
FORMULATING STRATEGIC MARKETING GOALS
TARGET MARKETING
DEFINING YOUR MARKETING, SALES, AND PROFIT GOALS
THE IMPORTANCE OF A MARKETING BUDGET
THE STRENGTHS AND WEAKNESSES OF YOUR BUSINESS
SELECTING A MARKETING STRATEGY
Marketing Overview
I MARKETING OVERVIEW
MARKETING OVERVIEW
The purpose of marketing is to create customers.
Technological excellence, delivery capability, service skills, pricing theory, and product perfection will gain you nothing (or create
a loss) if you don't have enough customers.
Marketing is the complex process of creating customers for your products and services. A marketing plan is a written document that
helps you manage this process, and it includes the action steps needed to make the plan work.
Writing a marketing plan is easy—you don't write the plan until you've done 95 percent of the work. The tough part of market
planning is a careful examination of your business, including these analyses:
Product and service analysis
Analysis of your market and your position in that market
Analysis of the strengths and weaknesses of your business

Planning cannot be done in a vacuum. The first step is to take a broad overview of your marketing efforts, including current
markets, products, and services, in the context of current economic and competitive conditions.
Copyright Dearborn Financial Publishing, Inc.® 1998, The Market Planning Guide, 5th Edition, by David H. Bangs, Jr., published by Upstart Publishing Company®.
Marketing Overview
I MARKETING OVERVIEW
MARKETING OVERVIEW
The purpose of marketing is to create customers.
Technological excellence, delivery capability, service skills, pricing theory, and product perfection will gain you nothing (or create
a loss) if you don't have enough customers.
Marketing is the complex process of creating customers for your products and services. A marketing plan is a written document that
helps you manage this process, and it includes the action steps needed to make the plan work.
Writing a marketing plan is easy—you don't write the plan until you've done 95 percent of the work. The tough part of market
planning is a careful examination of your business, including these analyses:
Product and service analysis
Analysis of your market and your position in that market
Analysis of the strengths and weaknesses of your business
Planning cannot be done in a vacuum. The first step is to take a broad overview of your marketing efforts, including current
markets, products, and services, in the context of current economic and competitive conditions.
Marketing Overview
III MARKETING SWOT ANALYSIS
SWOT stands for "Strengths, Weaknesses, Opportunities, and Threats." Conducting a SWOT analysis is fairly straightforward for
most small businesses. Once completed, the SWOT analysis is used to help drive your marketing plans. A word of advice: The
more employees you involve in the SWOT analysis the better. Successful business owners find that a periodic meeting with all
employees to work through the analysis not only gives rise to some extraordinarily insightful comments but also makes sure that the
employees buy into the planning process. It can take as little as half a day to set the broad directions.
Internal Analysis
SWOT begins by looking at internal strengths and weaknesses. The following areas are common to all businesses and should
always be examined:
Profitability
Sales and marketing
Quality
Customer Service
Productivity
Financial resources
Financial management
Operations
For each of these areas, ask whether it is a strength or a weakness. It may be both—people sometimes have different views. What
you are looking for is a rough profile of your business's internal performance. You want to be able to capitalize on the strengths and
defend or improve the weaknesses.
External Analysis
While external business factors are not under your control, if you examine their potential effects, you can take precautionary or
preemptive action. Again, this is usually a fairly simple analysis. For each external factor, ask yourself and your employees what
opportunities and threats to the success of your business are potentially coming up. The following types of factors are commonly
included in an external analysis:
Technology. Technological factors include new or improved technologies. Think of what happened to the typesetting
industry when desktop publishing became affordable.
Government and Regulation. Regulatory factors are in constant flux.
Legal. Legal factors are also in constant flux. You might grow into a new area of legal exposure; for example, if you employ
15 people, you have to comply with the Pregnancy Discrimination Act.
Economic Environment. The economic environments—local, national, and international—have obvious impact on your
ability to reach financial goals. Be aware of them.
Don't dwell too long on these issues. You are looking for major forces that will impact your business, not for some subtle wrinkle.
Strategizing has to be done with a broad brush. The details, the goals and objectives and implementation of the strategies, are
another matter.
Acting on Your SWOT Analysis
After you've completed your SWOT analysis, pick no more than five strengths and opportunities to work on and no more than five
weaknesses and threats to worry about. Pick them carefully. Limit the choice to make sure that you focus attention on areas with the
greatest payback. If you only pick one or two strengths and opportunities, or weaknesses and threats, that's fine. If they are really
important, this choice will drive your marketing plans.
The essence of small business strategy is to find and dominate small market niches, please customers better than the next business,
and keep it all simple so the strategies can be communicated effectively. In narrowing down your key strengths, weaknesses,
opportunities, and threats, you should decide on a plan of action for each one. These actions form the basis for your strategic
marketing goals.
Marketing Overview
IV FORMULATING STRATEGIC MARKETING GOALS
Goals are the desired result of the actions you choose. Goals have to be measurable (most often in dollars or units), have a deadline,
and be someone's responsibility. Goals also have to be believable and achievable. If the people responsible don't believe the goals
are worthwhile, they won't make the effort necessary to achieve the goals. If the goals aren't achievable given the resources
available and conditions that apply, then those responsible for achieving the goals will be frustrated no matter how hard they try and
eventually your goals will be ignored.
Goals direct and control actions. They give you something to aim for, some way to measure progress and answer the question,
"How am I doing?" The clearer you can make your goals, the better; clear goals make communicating strategy a lot easier than
vague, fuzzy aims such as "make more money" or "increase profits."
Qualitative Strategic Goals
The following types of qualitative goals should be defined in the strategic planning process.
Positioning: What is the position of your business in its markets and among its competitors? How is it perceived by your
target markets?
Segmentation: What segments of the market do you want to attract?
Culture: What is the culture of your business?
Differentiation: How does your business differ from its competitors? What are the special skills and competencies of your
business?
Social Responsibilities: What purposes does your business serve beyond its own survival and profitability?
Choosing Your Goals
If you've already defined your business and conducted a SWOT analysis, you are ready to turn the ideas you have developed into
long-term goals, three to five years out, and then turn the goals into specific short-term objectives. These goals and objectives are
the foundation of your marketing plans.
Take time to choose your goals carefully. Consider how meeting these goals would impact your finances, your personnel, your
place of business , and your equipment. What would it do to your life outside the business, especially time commitments?
Write your goals down. Be as specific as possible. Next to each goal, include a due date, and name the person responsible for
seeing that it gets achieved.
Marketing Overview
V TARGET MARKETING
TARGET MARKETING
Target marketing is a simple concept. You have a limited number of marketing dollars, so you want to invest them wisely. Your
business has a potential market consisting of a vaguely defined group of people who might buy your products. In order to invest
your money wisely, you have to narrow that broad group down to those people (or people in particular institutions) most likely to
buy from you.
Many potential buyers are too far away geographically, can't afford your prices, don't want to change suppliers, prefer to deal
locally, or are unlikely for other reasons to become your customers. Recognizing these limitations on your market is the first step
toward target marketing. The next step is to identify the segments of the overall market that are most likely to buy from you.
Customer Focus
Customer focus forces your business to succeed. There are two ways to view customer focus. First, adopt your customers' (actual or
prospective) focus on your products and services. Second, base all your efforts on meeting your customers' needs.
If you target your market effectively, you will have a manageable number of customers you can learn a great deal about—how they
think, why they buy, when they buy, what their preferences might be. You will be able to learn what benefits they seek so you can
choose to address those demands. Knowing the benefits they seek allows you to market your goods and services economically and
effectively, using messages and media that they will see and be influenced by.
In a wider sense, customer focus helps you make strategically helpful decisions in all aspects of your business. For example: You
would choose what to offer in light of your market's desires; you would choose a location or means of distribution primarily
because it was convenient for your customers, and only secondarily convenient for you; you would hire, train, and manage staff to
better serve your customers and prospects—and your staff would serve the customers the way the customers wanted to be served.
You cannot do any of this unless you focus on your best customers and prospects. Ask them what they want. They'll tell you.
The Target Marketing Process
In marketing, you have to keep track of what you're up to. Fashions change. The economic climate changes. Products and services
gain and lose value. Markets shift.
For this reason, target marketing is an ongoing five-step process:
Who is most likely to buy from you? These people are at the center of your target market.
What characteristics (wants, needs, habits, and so forth) do your best customers and prospects share? This information is
used to segment or differentiate the market.
How big are the segments?
Rank the segments in terms of potential profitability for your business. You may need help from a financial adviser in order
to do this.
What is the most profitable segment mix (in terms of ease and cost of sale, sales volume, and price)?
Marketing Overview
VI DEFINING YOUR MARKETING, SALES, AND PROFIT GOALS
When establishing professional goals, you really need two sets of goals: one for your business and one for yourself. Your personal
goals come first. You want to be sure you don't commit your business to a strategy that runs counter to your personal wishes. Do
you want to sell your business in a few years and retire? Build the business to Fortune 1000 size, or keep it small? Do you want to
be a technological trailblazer? Your personal goals will have profound marketing implications.
Marketing Goals
Some plausible marketing goals for the immediate future are increased dollar or unit sales, improved market share, greater profits,
entry into new markets, abandoning a current market, and adopting a new technology or product line. Maybe you want to improve
your company's image, advertising, or promotional efforts. Or perhaps you want to implement a new pricing strategy or distribution
process.
Be general. These goals will be reexamined and refocused in time. For now, just jot down the broad marketing goals you would like
to achieve over the next year and over the next three years.
Sales Goals
Sales and profit goals should be more precise. If you have a small number of product or service lines, break the goals down further.
But even an aggregate number is helpful; you can break it down later. List each of your products or product lines. Next to each one,
include its target market and sales forecast for the next year. For each product or product line, estimate what sales would be if
everything goes wrong next year. Then estimate what sales would be if everything goes perfectly. Since neither case is likely, an in-
between sales figure will be a more accurate forecast. This number is not an average of worst and best cases, but it is rather your
considered opinion of what will happen to each product or service line over the next year.
Profit Goals
Profit goals are harder to establish. If you know what profit you traditionally make as a percentage of sales, use the sales forecast
and add a bit. You don't want to set goals too low, and you will (you hope) become more profitable with more sales. Experience
will correct or corroborate your hopes.
Risks to Achieving These Goals
Possible barriers to your goals include cash flow or capital shortages, personnel deficiencies or inefficiencies, weak technology,
stale product lines, pricing woes, declining or flat sales, strong new competitors, quality control problems, and many more.
Every company has limitations. A small-business owner or manager needs to know what the problems are and should be able to
address them. Being aware of threats and weaknesses will help you anticipate and respond to potential risks to your business.
Some problems are long-term: A job shop printer has to be concerned about laser printing and desktop publishing, not because the
technology is increasingly widespread but because it will change his or her business climate. Being a supplier to a declining
industry is a long-term problem. So is being located in a stagnant or declining local economy.
Know your limitations. As part of this process, involve your employees, advisers, and investors. Limitations affect all of them
directly, and their support is needed to overcome these limitations. Keep a list of problems that you think might get between you
and your goals. The finest memory is not so firm as faded ink.
Marketing Overview
VII THE IMPORTANCE OF A MARKETING BUDGET
The most common budgeting problem for small business owners is having no budget at all. The second most common problem is
relying on a reactive, sloppy excuse for a budget. Marketing is as much a cost of doing business as rent or payroll. It isn't something
to cut at the first sign of a sales slump, or to reduce to boost profits for a month or two. You have to have a budget—unless you
want to waste money and forgo improvements in sales and profit.
Anyone can set a budget. Setting a budget worth following requires skill. One common method of setting a marketing budget is to
allocate a fixed percentage of forecast sales on a calendar basis. If you don't have trade figures available, ask for them from your
business counselor, accountant, banker, or other financial experts such as editors of trade magazines. Or ask other successful
business owners. These trade averages will provide some useful guidelines.
More than advertising and public relations come out of your marketing budget. You also need to look at costs such as sales and
sales training, window displays, sales support, and sales presentation pieces. Your marketing budget has to reflect your business,
not someone else's.
Look at your marketing, sales, and profit goals and try to figure out what it will cost to reach them. If it is more than you can afford,
that forces you to make some choices. You need a marketing budget that you can live with, one that helps you reach your goals and
doesn't tie you to the past or to a formula that can't be adjusted to sudden shifts.
The best marketing budgets have two parts: a fixed monthly amount to meet ongoing, monthly marketing expenses, and a
contingency or project budget to help you meet unexpected marketing needs. A new market may open up, or a competitor retire, or
a new competitor appear. How you respond to these opportunities and challenges is heavily influenced by your budget.
Incomplete campaigns eat profits. Make sure you have enough money to finish your marketing campaigns. You will get tired of
your advertisements just about when your markets first take notice of them. That's a problem you can easily deal with. But running
out of money is another matter.
To set up your budgets, use your resources. Your accountant or financial advisers can help you put dollar costs to your goals more
efficiently than you can. However, you can provide estimates, based on your goals and prior experience in your business. Start by
creating preliminary budget estimates. List the marketing actions you plan to take, noting when they will happen and how much
they will cost.
Marketing Overview
VIII THE STRENGTHS AND WEAKNESSES OF YOUR BUSINESS
Your marketing strategy has to reflect the strengths and weaknesses of your business. This includes conducting a SWOT analysis as
well as looking closely at your competition and target market.
In a successful business, all important parts of running the business are covered adequately, if not necessarily brilliantly, through
one's marketing plans. No major area can be left unattended. A management audit helps you gauge the quality of your management,
spot areas where improvement is needed, and make sure that there are no glaring omissions to trip you up.
Your aim is to establish the right balance for your business. Your business is an assemblage of systems, each of which has to work
well for the whole business to be profitable. A management audit helps make sure that your business has all its necessary parts, that
they are all working together toward the same goals, and that the goals are suitable for the resources of your business. Furthermore,
all parts should be the right size. Letting one part outgrow the others leads to an imbalanced allocation of resources.
Once you've evaluated your internal management structure and processes, it's important to identify those areas where you can
improve your performance. For instance, if you discover that your business has unbalanced skills, you may wish to balance them by
taking an educational course in the skills where you are deficient, hiring the right skills, or delegating those areas where you are
uncomfortable to someone already working with you.
The next step is to relate your findings directly to your marketing plans. Weaknesses are areas where you have a golden opportunity
to improve your business's performance. A weakness identified is a problem half resolved. Strengths are areas to build on.
Your search for strengths and weaknesses should go further than internal analyses. External opportunities and threats also have to
be identified. If you have not already conducted a SWOT analysis, or your business has changed since you last updated it, you
should revisit the external analysis portion of your SWOT.
Your Business's Strengths
Internal strengths are under your control. But your perception of what are your strengths and weaknesses may not be shared by
others. Your colleagues, advisers, and employees may have a different feel for internal strengths and weaknesses than you, and will
almost certainly have different notions about the opportunities and threats posed by the external environments affecting your
business. Get their input. This helps you widen your perceptions and helps your employees buy into the SWOT process and the
changes that a SWOT analysis may prescribe.
Your strengths may include a great product, skilled personnel, super location, close relationship with an ad agency, or outstanding
technology. You want to find as many of these advantages as possible to help you sharply define your marketing niche.
Opportunities are external, and include a number of factors you have little control over. For instance, your competition may be
feeble, or your industry expanding, or the local economy booming. These opportunities tend to be temporary: No economy booms
forever, markets do have limits, and weak competition opens the doors for stronger competitors. Still, you want to be aware of and
carefully monitor such opportunities so you can benefit from them.
Questions to Answer
Which products and services are most important to your customers?
Which products and services are least important to your customers?
What important proposals or bids have you won this year? Why did you win them?
What important bids or proposals have you lost this year? Why did you lose them?
What aspects of your advertising and public relations have been the most successful this past year?
What aspects were the least successful?

Which target markets or customer groups created the most sales for your business? Which created the most profits?
Which target markets or customer groups created the least sales? Which created the least profits?
What additional goods or services will you need to remain competitive in the future?
What did your business do best this year?
What were your greatest triumphs?
What were your greatest disappointments or failures?
Your Business's Weaknesses
Weaknesses are internal problems. Samples of internal weaknesses include untrained or underutilized personnel, lack of sales
support materials, frequent stockouts, poor quality control, and undercapitalization. While some weaknesses may have to be
addressed from a company-wide point of view, some are essentially marketing problems. Do you have a marketing budget? If not,
why not? Do you have sales training? Why not? Are your sales support systems weak? If so, strengthen them.
Threats are external problems. Your awareness and understanding of external threats help you to handle them. Maybe you face
new, aggressive competition, or the local economy is taking a nosedive, or your market is evaporating due to a new technology.
You have to know what these larger forces are to intelligently respond to or preempt them. Maybe you can't control them, but you
can control how your business reacts. If you predict external threats, you gain a sudden competitive advantage over the unprepared
competitor. He or she gets swamped while you ride the wave.
List the strengths and weaknesses, both internal and external, then go out and look for more. This is an open-ended process that will
become second nature. As you identify the strengths and weaknesses, opportunities and threats, ask yourself:
How can I take advantage of or build on this set of circumstances?
If one or more are beyond my control, how will it affect my business?
How long will these advantages and disadvantages last—and how can my business take advantage of these circumstances?
Taking Action
The next step in this process is to review your weaknesses and threats, and decide what to do about the most pressing. Since these
represent significant problems, you want to focus your efforts on resolving the most important ones first.
Also turn to the more positive side of the coin and consider how you can take advantage of your strengths and opportunities by
building on them. Once again, limit yourself to the most important—don't try to address all opportunities and strengths as if they
were equally important.
Marketing Overview
IX SELECTING A MARKETING STRATEGY
Selecting a marketing strategy is a four-step process:
Step One: Examine Past and Current Marketing Strategies
Has your strategy been "business as usual," "get whatever pieces of business we can," or "follow-the-leader"? These are three
common and ineffective strategies. Few small-business owners plan to run their businesses in these ways, but inattention and habit
make such choices inevitable.
You can't change strategies overnight. They are built into the culture of your business. Your methods of achieving those goals
(including business practices and relationships among people within the business) are inextricably mixed up with your strategic
choices. The strategies and culture evolve together slowly; they change slowly too.
Strategies can be active or passive, aggressive or defensive, goal-oriented or opportunistic. Your strategies should reflect your
attitudes and personality. For instance, if your own style is relaxed and averse to taking risks, an aggressive, high-risk strategy
probably won't work. But if you enjoy risk and being ahead of the crowd, then a defensive, reactive strategy will drive you up the
wall. That doesn't mean that you can't adopt a conflicting strategy for a short while—but if you adopt one counter to your feelings,
be aware of the potential conflict.
Active/passive, aggressive/defensive, goal-oriented/opportunistic: These three sets of pairs help you define your current strategies.
Apply them to your marketing, management, financial, production, and operations setups; ask yourself which strategic adjective
applies from each of the three pairs. There is nothing normative about these pairs. No one is better than another, though some are
more useful for your business at one time than another.
Strategies vs. Tactics
All strategic elements must be defined in terms of needs, attitudes, and unmet desires in the market. These will include known
needs that can be accurately determined by investigations and hypothetical needs that must be nourished to become a market need.
Tactics are:
Concrete
Specific
Individual
Linear
Sequential
Strategies are:
Conceptual
General
Complex
Organic
Interactive and systemic
Qualitative Strategies
Strategic planning must define goals that are qualitative in nature. These qualitative goals include:
Positioning: What is the position of your organization in its target markets and among your competitors? How does the
market view it?
Segmentation: What are the demographics and qualitative characteristics (attitudes and tastes) of your defined target
markets?
Cultural: What is the culture of your business?
Stylistic: What is the style of your business?
Differentiation: In what ways does your business and its product or service structure differ from all other organizations
offering similar products and services?
Functional: What purpose does the organization and its product or service structure fulfill beyond its own parochial needs?
Quantitative Strategies
Quantitative strategic elements to be defined include: price strategy, market share, growth rate, cost characteristics, sales and profit
goals, production and distribution goals, and logistics.
Step Two: Summarize Personal and Business Objectives
Include your personal goals in your marketing plans. If you want to retire in five years, fine. Plan for it. If you want to work until
you drop, fine. Plan for that. If you want your business to remain small enough so you can bring your dog to work, great. It can be
done. Just don't set up your business to thwart yourself. If you want to see how big a business you can build, go ahead. Build the
business. But not unless it makes sense to you personally.
Step Three: Reexamine Marketing Strategies
Examine each of your strategies and ask yourself if, given your resources and competitive situation, it would help you reach your
goals. You will probably want to use more than one strategy, or modify one or more to better fit your business.
Step Four: Choose the Simplest Strategies
Choose the simplest strategies for your business. To be effective, strategies have to be communicated. Fancy strategies look great
on paper, but if they present opportunities for misunderstanding, then there will be misunderstandings. The simplest strategies are
the best strategies.
Your Final Strategic Choices
Once you've completed these four steps, you're ready to make your final strategic choices. When selecting your marketing
strategies:
Test them for consistency with each other. You don't want to pursue contradictory strategies.
Test them for feasibility. If they require more resources than you can muster, they won't work.
Test them for coherence. Do they fit your business? Do they tend toward unifying the focus of your marketing efforts? Do
they form an understandable, easily communicated grand strategy?
Make sure they are acceptable to your employees. If you can't generate company-wide support, the strategy will fail. This is
where complicated strategies break down. If you can't communicate the strategies clearly, you have a problem.
Marketing Overview
II DEFINING YOUR BUSINESS
DEFINING YOUR BUSINESS
The best place to start the process of developing a strategic marketing plan is with an understanding of what you hope to
accomplish in your business. Once you've established this, you must develop the strategies that will best help you to achieve those
goals.
You could be the best marketer or manager in the world, but if you aim for the wrong market, or have the wrong products, you will
still go broke. Being in the wrong industry at the wrong time, or in the most promising industry with the wrong resources,
guarantees that you won't succeed. The point is simple: pick your focus, where you concentrate your efforts, very carefully.
Specialize if you can, and strive to identify strengths you can build on and opportunities you can seize. Also, be sure to improve
weak areas, and avoid any problematic threats that you cannot control.
Every business is run according to some strategy, some guiding set of goals and assumptions that result in a directed approach to a
business opportunity or situation. "Trusting to luck" is a strategy. "Reacting to outside pressure" is another. "Inertia" and "habit"
and "business as usual" are also strategies, though not particularly good ones. The question isn't whether or not your business will
pursue a strategy. The question is whether the strategy you select will be the most useful for your business at this time, given your
resources, interests, markets, and competition. A strategic plan based on analysis of your strengths, weaknesses, opportunities, and
threats will help you identify and then accomplish your business goals.
Picking an Initial Business Strategy

John Case, writing for the Boston Globe, proposed a simple way to pick an initial strategy. He based his proposition on whether you
are in a commodity, specialty, or head-to-head business.
Commodity Businesses
If you are in a commodity business, one where there is little or no perceived difference between your products or services and those
offered by competitors, the suggested strategy is to be the low-cost producer or supplier. In a commodity business, competition will
be driven by price. Agricultural products exemplify commodity businesses.
Specialty Businesses
Specialty businesses, such as specialty retailers or ethnic restaurants, compete by carving out a niche in the marketplace and raising
barriers to entry into that niche. For example, if you run a bicycle shop, you might try to become the local authority on mountain
bicycles and gear, sponsor races, put on training and informational workshops, and make sure to stock the newest and best
equipment. Such an approach would make it very difficult for anyone else to dislodge you from your niche. Note that you would
not compete on price.
Head-to-Head Businesses
Most small businesses are what Case calls head-to-head businesses. These should find a niche and fill it. They adopt a strategy of
finding out what their markets would find especially attractive about their products, services, or delivery systems, and then
providing it. By establishing a unique selling proposition, a competitive advantage can be maintained and built on over time. Think
of Frank Perdue and the humble chicken.
What Business Are You In?
Strategic marketing, which is simply marketing that has been planned to take advantage of your strengths and minimize your
weaknesses, starts with this single question: What business are you in?
There are lots of ways you could answer this. A product definition would list the products or services you offer. A technology
definition would stress your technological competencies. A market definition would define your business in terms of your current
and prospective customers. A conceptual definition would give a sense of what your business is all about, what it hopes to become,
and how it will go about becoming that.
Describing Your Business

To adequately describe your business, answer the following questions. Don't aim for 100 percent accuracy; you can fine-tune your
business definition later. Ask yourself and your colleagues these questions:
What are our products and services? Your business definition is based on what you sell.
Who are our customers? Your present customer base and the target markets you choose to serve help focus the definition
further.
Why do our customers buy from us? Every business has plenty of competitors, and your customers and prospects have a
wide range of products and services to choose from.
What sets our business apart from our competitors? What is distinctive or unusual about your business? If you can
differentiate yourself from your competitors in the eyes of your markets, you seize a strong advantage.
These four core questions are more difficult to answer than you may think, especially if you are a new businessperson. To help you
answer them, make use of the free advice available from the Small Business Administration's SCORE and SBDC programs. You
should also have your employees, advisers, and banker help you sketch out answers to these questions. Their input will be very
revealing.
Your definition of your business determines the direction your business takes. If you can state clearly and succinctly what you sell,
to whom, and why they buy from you and not from someone else, you are well on the way to creating an effective marketing plan.
There is no right definition. A series of answers will evolve as your business changes. Your products, services, and markets change
all the time. So does your competitive position. Other people will copy what you do well and compete for your customers on price,
quality, service, or wherever you appear vulnerable.
Your Mission Statement
The next step is to write a mission statement, a condensed version of your business definition. Mission statements do not bind your
hands. They liberate you from continually grappling with strategic decisions.
Long-Range Planning
The business definition and mission statement make it much simpler to select and evaluate appropriate long-term goals for your
business. The effort you put into these basic strategic questions saves you effort in the long run. By planning three to five years out,
you make it easier to keep your business focused on the goals you choose to pursue.
Marketing Overview
III MARKETING SWOT ANALYSIS
SWOT stands for "Strengths, Weaknesses, Opportunities, and Threats." Conducting a SWOT analysis is fairly straightforward for
most small businesses. Once completed, the SWOT analysis is used to help drive your marketing plans. A word of advice: The
more employees you involve in the SWOT analysis the better. Successful business owners find that a periodic meeting with all
employees to work through the analysis not only gives rise to some extraordinarily insightful comments but also makes sure that the
employees buy into the planning process. It can take as little as half a day to set the broad directions.
Internal Analysis
SWOT begins by looking at internal strengths and weaknesses. The following areas are common to all businesses and should
always be examined:
Profitability
Sales and marketing
Quality
Customer Service
Productivity
Financial resources
Financial management
Operations
For each of these areas, ask whether it is a strength or a weakness. It may be both—people sometimes have different views. What
you are looking for is a rough profile of your business's internal performance. You want to be able to capitalize on the strengths and
defend or improve the weaknesses.
External Analysis
While external business factors are not under your control, if you examine their potential effects, you can take precautionary or
preemptive action. Again, this is usually a fairly simple analysis. For each external factor, ask yourself and your employees what
opportunities and threats to the success of your business are potentially coming up. The following types of factors are commonly
included in an external analysis:
Technology. Technological factors include new or improved technologies. Think of what happened to the typesetting
industry when desktop publishing became affordable.
Government and Regulation. Regulatory factors are in constant flux.
Legal. Legal factors are also in constant flux. You might grow into a new area of legal exposure; for example, if you employ
15 people, you have to comply with the Pregnancy Discrimination Act.
Economic Environment. The economic environments—local, national, and international—have obvious impact on your
ability to reach financial goals. Be aware of them.
Don't dwell too long on these issues. You are looking for major forces that will impact your business, not for some subtle wrinkle.
Strategizing has to be done with a broad brush. The details, the goals and objectives and implementation of the strategies, are
another matter.
Acting on Your SWOT Analysis
After you've completed your SWOT analysis, pick no more than five strengths and opportunities to work on and no more than five
weaknesses and threats to worry about. Pick them carefully. Limit the choice to make sure that you focus attention on areas with the
greatest payback. If you only pick one or two strengths and opportunities, or weaknesses and threats, that's fine. If they are really
important, this choice will drive your marketing plans.
The essence of small business strategy is to find and dominate small market niches, please customers better than the next business,
and keep it all simple so the strategies can be communicated effectively. In narrowing down your key strengths, weaknesses,
opportunities, and threats, you should decide on a plan of action for each one. These actions form the basis for your strategic
marketing goals.
Marketing Overview
IV FORMULATING STRATEGIC MARKETING GOALS

Goals are the desired result of the actions you choose. Goals have to be measurable (most often in dollars or units), have a deadline,
and be someone's responsibility. Goals also have to be believable and achievable. If the people responsible don't believe the goals
are worthwhile, they won't make the effort necessary to achieve the goals. If the goals aren't achievable given the resources
available and conditions that apply, then those responsible for achieving the goals will be frustrated no matter how hard they try and
eventually your goals will be ignored.
Goals direct and control actions. They give you something to aim for, some way to measure progress and answer the question,
"How am I doing?" The clearer you can make your goals, the better; clear goals make communicating strategy a lot easier than
vague, fuzzy aims such as "make more money" or "increase profits."
Qualitative Strategic Goals
The following types of qualitative goals should be defined in the strategic planning process.
Positioning: What is the position of your business in its markets and among its competitors? How is it perceived by your
target markets?
Segmentation: What segments of the market do you want to attract?
Culture: What is the culture of your business?
Differentiation: How does your business differ from its competitors? What are the special skills and competencies of your
business?
Social Responsibilities: What purposes does your business serve beyond its own survival and profitability?
Choosing Your Goals
If you've already defined your business and conducted a SWOT analysis, you are ready to turn the ideas you have developed into
long-term goals, three to five years out, and then turn the goals into specific short-term objectives. These goals and objectives are
the foundation of your marketing plans.
Take time to choose your goals carefully. Consider how meeting these goals would impact your finances, your personnel, your
place of business , and your equipment. What would it do to your life outside the business, especially time commitments?
Write your goals down. Be as specific as possible. Next to each goal, include a due date, and name the person responsible for
seeing that it gets achieved.
Marketing Overview
V TARGET MARKETING
TARGET MARKETING
Target marketing is a simple concept. You have a limited number of marketing dollars, so you want to invest them wisely. Your
business has a potential market consisting of a vaguely defined group of people who might buy your products. In order to invest
your money wisely, you have to narrow that broad group down to those people (or people in particular institutions) most likely to
buy from you.
Many potential buyers are too far away geographically, can't afford your prices, don't want to change suppliers, prefer to deal
locally, or are unlikely for other reasons to become your customers. Recognizing these limitations on your market is the first step
toward target marketing. The next step is to identify the segments of the overall market that are most likely to buy from you.
Customer Focus
Customer focus forces your business to succeed. There are two ways to view customer focus. First, adopt your customers' (actual or
prospective) focus on your products and services. Second, base all your efforts on meeting your customers' needs.
If you target your market effectively, you will have a manageable number of customers you can learn a great deal about—how they
think, why they buy, when they buy, what their preferences might be. You will be able to learn what benefits they seek so you can
choose to address those demands. Knowing the benefits they seek allows you to market your goods and services economically and
effectively, using messages and media that they will see and be influenced by.
In a wider sense, customer focus helps you make strategically helpful decisions in all aspects of your business. For example: You
would choose what to offer in light of your market's desires; you would choose a location or means of distribution primarily
because it was convenient for your customers, and only secondarily convenient for you; you would hire, train, and manage staff to
better serve your customers and prospects—and your staff would serve the customers the way the customers wanted to be served.
You cannot do any of this unless you focus on your best customers and prospects. Ask them what they want. They'll tell you.
The Target Marketing Process
In marketing, you have to keep track of what you're up to. Fashions change. The economic climate changes. Products and services
gain and lose value. Markets shift.
For this reason, target marketing is an ongoing five-step process:

Who is most likely to buy from you? These people are at the center of your target market.
What characteristics (wants, needs, habits, and so forth) do your best customers and prospects share? This information is
used to segment or differentiate the market.
How big are the segments?
Rank the segments in terms of potential profitability for your business. You may need help from a financial adviser in order
to do this.
What is the most profitable segment mix (in terms of ease and cost of sale, sales volume, and price)?
Marketing Overview
VI DEFINING YOUR MARKETING, SALES, AND PROFIT GOALS
Marketing Goals
process.
Sales Goals
Profit Goals
Marketing Overview
VII THE IMPORTANCE OF A MARKETING BUDGET
The most common budgeting problem for small business owners is having no budget at all. The second most common problem is
relying on a reactive, sloppy excuse for a budget. Marketing is as much a cost of doing business as rent or payroll. It isn't something
to cut at the first sign of a sales slump, or to reduce to boost profits for a month or two. You have to have a budget—unless you
want to waste money and forgo improvements in sales and profit.
Anyone can set a budget. Setting a budget worth following requires skill. One common method of setting a marketing budget is to
allocate a fixed percentage of forecast sales on a calendar basis. If you don't have trade figures available, ask for them from your
business counselor, accountant, banker, or other financial experts such as editors of trade magazines. Or ask other successful
business owners. These trade averages will provide some useful guidelines.
More than advertising and public relations come out of your marketing budget. You also need to look at costs such as sales and
sales training, window displays, sales support, and sales presentation pieces. Your marketing budget has to reflect your business,
not someone else's.
Look at your marketing, sales, and profit goals and try to figure out what it will cost to reach them. If it is more than you can afford,
that forces you to make some choices. You need a marketing budget that you can live with, one that helps you reach your goals and
doesn't tie you to the past or to a formula that can't be adjusted to sudden shifts.
The best marketing budgets have two parts: a fixed monthly amount to meet ongoing, monthly marketing expenses, and a
contingency or project budget to help you meet unexpected marketing needs. A new market may open up, or a competitor retire, or
a new competitor appear. How you respond to these opportunities and challenges is heavily influenced by your budget.
Incomplete campaigns eat profits. Make sure you have enough money to finish your marketing campaigns. You will get tired of
your advertisements just about when your markets first take notice of them. That's a problem you can easily deal with. But running
out of money is another matter.
To set up your budgets, use your resources. Your accountant or financial advisers can help you put dollar costs to your goals more
efficiently than you can. However, you can provide estimates, based on your goals and prior experience in your business. Start by
creating preliminary budget estimates. List the marketing actions you plan to take, noting when they will happen and how much
they will cost.
Marketing Overview
VIII THE STRENGTHS AND WEAKNESSES OF YOUR BUSINESS
Questions to Answer
Taking Action
Marketing Overview
Tactics are:
Concrete
Specific
Individual
Linear
Sequential
Strategies are:
Conceptual
General
Complex
Organic
market view it?
markets?


strategies:
Marketing Overview
Tactics are:
Concrete
Specific
Individual
Linear
Sequential
Strategies are:
Conceptual
General
Complex
Organic
market view it?
markets?

strategies:
TOPIC OUTLINE
WHY RESEARCH YOUR MARKET?
OVERVIEW OF MARKET RESEARCH
MARKET RESEARCH METHODS
CUSTOMER ANALYSIS OVERVIEW
INTRODUCTION TO CUSTOMERS
WHAT DO CUSTOMERS NEED?
SEGMENTING THE MARKET
DEFINING THE PRODUCT IN THE CUSTOMERS' TERMS
IDENTIFY AND TARGET YOUR PRIMARY CUSTOMERS

I WHY RESEARCH YOUR MARKET?
WHY RESEARCH YOUR MARKET?
The Duke of Wellington, British general and prime minister, defined reconnaissance as the "art of knowing what is on the other
side of the hill." Market research is the business equivalent of this military activity. It is the name given to the process of collecting,
recording, classifying, and analyzing data on customers, competitors, and any other influences in the chain that links buyers to
sellers.
”
PRESIDENT OF THE HARVARD BUSINESS SCHOOL … "IF YOU THINK KNOWLEDGE IS EXPENSIVE, TRY IGNORANCE."
The research should be done before the business is started or a new strategy is pursued, thus saving the time and cost incurred if
expensive mistakes are made. Obviously, the amount of research undertaken has to be related to the sums at risk. If a venture calls
for a start-up investment of $2000, spending $10,000 on market research would be a bad investment. However, new and small
businesses that do not want to join the catastrophically high first-year failure statistics would be prudent to carry out some
elementary market research, whatever level their start-up capital is to be. As the President of the Harvard Business School said: "If
you think knowledge is expensive, try ignorance."
The starting point in any market research has to be a definition of the scope of the market you are aiming for. A small convenience
store may service the needs of only a few dozen streets. A specialist restaurant may have to call on a much larger area to be viable.
You may eventually decide to sell to different markets. For example, a retail business can serve a local area through the store and a
national area by mail order. A small manufacturing business could branch out into exporting.
People all too often flounder in their initial market research by describing their markets too broadly. For example, they say that they
are in the automobile industry when they really mean that they sell used cars, or in health foods, when they are selling whole-grain
bread from a suburban storefront. While it is important to be aware of trends in the wider market, this goal must not obscure the
need to focus on the precise area that you have to serve.
It is unlikely that you will already have the answers to all the important questions concerning your marketplace. The purpose of the
market research element of your planning is to ensure that you have sufficient information on customers, competitors, and markets
so that your market entry or expansion strategy is at least on the target, if not in the bull's eye itself. In other words, enough people
want to buy what you want to sell at a price that will give you a viable business. If you miss the target completely, you may not
have the resources for a second shot.
One of the sad aspects of new business starts is that often the 1 in 3 failure rate for businesses in the first three years of life involves
someone investing a lump-sum payment received from a previous severance, through taking early retirement, or from an
inheritance. It is one of the paradoxes of small businesses that, while you cannot start without investing some time and money, it
may be safer to have more time than money. Those with their own money frequently have less pressure from banks or financial
investors to thoroughly research their ideas first, simply because they do not have to go to the bank in the early stages to obtain
support before starting. Those with time but inadequate resources always have to seek advice before starting, and inevitably this
will include researching the market as widely as possible before commencing. You do not have to open a store to prove there are no
customers for your goods or services; frequently some modest do-it-yourself market research beforehand can give clear guidance as
to whether your venture will succeed or not.
urpose of practical market research for entrepreneurs investigating or seeking to start a new business is, therefore, twofold:1.
To build credibility for the business idea; the entrepreneur must prove first to his or her own satisfaction, and later to
outside investors, a thorough understanding of the marketplace for the new product or service. This will be vital if resources
are to be attracted to build the new venture.
To develop a realistic market-entry strategy for the new business, based on a clear understanding of genuine customer needs
and ensuring that product quality, price, promotional methods, and distribution chain are mutually supportive and clearly
focused on target customers.
wise, "fools rush in, where angels fear to tread." The same is certainly true in starting a business, where you will need to
research in particular:1. Customers. Who will buy your goods and services? What particular customer needs will your
business meet? How many of them are there?
Competitors. Which established companies are already meeting the needs of your potential customers? What are their
strengths and weaknesses?
Product or Service. How should it be tailored to meet customer needs?

Pricing. What price should you charge to be perceived as giving value for money?
Promotional Material. What is needed to reach customers; what newspapers or magazines do they read?
Location. Where should you locate to reach your customers most easily, at minimum cost?
Research, above all, is not just essential in starting a business but must become an integral part in the ongoing life of the company.
Customers and competitors change; products have life cycles. Once started, however, ongoing market research becomes easier
because you will have existing customers (and staff) to question. It is important that you monitor regularly their views on your
business and develop simple techniques for this purpose (for example, questionnaires for customers beside the cash register,
suggestion boxes with rewards for employees).
Copyright Colin and Paul Barrow 1998, The Business Plan Workbook, published by Kogan Page.

II OVERVIEW OF MARKET RESEARCH
OVERVIEW OF MARKET RESEARCH
Marketing research provides answers to questions such as:
Who are your best customers and prospects?
How does the 80/20 rule (that 80 percent of your profits come from 20 percent of your customers) affect you?
How do your customers and prospects perceive your products and services?
What do they want from a business like yours?
How can you satisfy their needs and wants profitably?
What's the potential of this market?
Should you market goods, services, or both?
What do your customers read, watch, and listen to?
Gathering Market Research Information
Some sources of market research information include
Customer lists
Trade publications
Local trade associations
Chambers of commerce
Service clubs such as Rotary or Kiwanis
Government agencies: economic development agencies, Small Business Administration programs, Department of Commerce
Libraries, both corporate and public
Basic Market Research Questions
Market research will help you gather information about customers, competitors, and products. Here are some of the more basic
questions market research can address in each of these areas.
Customers
Age?
Annual income?
Gender?
Ethnic group?
Profession or occupation?
Owner of a home?
Preferred media (what do they read, watch, and listen to)?
When do they buy?
How do they buy?
What do they buy?
Why do they buy?
Competition
Market share?
Advertising plan?
Price strategies?
Distribution?
Length of time in business?

Products
Benefits?
Price?
Service?
Design specifics?
Where is it sold?
Packaging?
How will it be used?
How many units are purchased in a year?
What should you improve?
Market Segmentation
Market segmentation is a method of organizing and categorizing those persons or associations that you think will buy your
products. Look at your customers and note their salient characteristics, then look to wider markets for more groups of people with
the same (or similar) characteristics. The usual route is to begin with a fuzzy concept, seek out more detailed information to help
define some rough market segments, then refine these into better-defined target markets. This can be highly rewarding as well as
entertaining.
The ingenuity of market research professionals is noteworthy. As an example, a research technique called Value and Lifestyle
Study (VALS) was developed by the Stanford Research Institute and helped Manufacturers Hanover Trust Company in New York
identify six psychographic groups within one demographic segment—the baby boomers. The upshot was a successful marketing
campaign that used only one slogan, "We realize your potential," to appeal to the six different mindsets.
Conducting Market Segmentation
As you perform a market segmentation analysis, you will probably find that you sell most profitably (and comfortably) to certain
segments and poorly to others. This information should affect your planning. Think of the old 80/20 rule: 80 percent of your profits
come from 20 percent of your customers. If you can get a good handle on who that profitable 20 percent are and who the
unprofitable 80 percent are, you will prosper.
It's important to look at the major market segments and customer base that you currently market to (or intend to market to). First
define the market segment by product or service. Who is the customer or prospect? How do you describe those persons? For
example, do you organize corporate customers by SIC code, or by size, or by membership association? Do you categorize
individual customers by age, income level, educational attainment, or where they live? Don't get hung up on perfection. Any
descriptions you select will be revealing and helpful, and you can always revise these selections as you hone your needs over time.

III MARKET RESEARCH METHODS
MARKET RESEARCH METHODS
There are two main types of research in starting a business: 1. Desk Research, or the study of published information
Field Research, involving fieldwork in collecting specific information for the market
Both activities are vital for the starter business.
Desk Research
There is increasingly a great deal of secondary data, available in published form and accessible via business sections of public
libraries, to enable new starters both to quantify the size of market sectors they are entering and to determine trends in those
markets. In addition to populations of cities and towns (helping to start quantification of markets), libraries frequently hold studies
of growth in different business sectors. Government statistics, showing trends in the economy, are also held. It is important to
demonstrate that your sector is growing, or if the sector is declining, to demonstrate why your product/service will be different and
will not be affected by this trend.
If you plan to sell to companies or stores, many industrial sectors are represented by trade associations, which can provide
information, and chambers of commerce are good sources of reference.
Field Research
Suppose you were contemplating opening a classical music store focusing on the young. While desk research might reveal that out
of a total area population of 250,000, 25 percent were under 30 years old, it would not state what percentage were interested in
classical music or how much they might spend on classical recordings. Field research (a questionnaire in the street) might, for
example, provide the answers of 1 percent and $20 a month spent, suggesting a potential market of only $150,000 a year. This
would suggest that alternative locations should be investigated, and the cost, only two afternoons spent conducting a survey, would
be far less than the horrors of having to dispose of the lease of an unsuccessful store.
work is now becoming quite big business. Most fieldwork carried out consists of interviews, with the interviewer putting
questions to a respondent. The more popular forms of interview are currently· personal (face-to-face) interview
telephone interview
mail survey
test and focus group
Personal interviews and mail surveys are clearly less expensive than getting together panels of interested parties or using expensive
telephone time. Telephone interviewing requires a very positive attitude, courtesy, an ability not to talk too quickly, and listening
while sticking to a rigid questionnaire. Low response rates on mail services (less than 10 percent is normal) can be improved by
accompanying letters explaining the purpose of the research and why respondents should reply; by offering rewards for completed
questionnaires (small gifts); by sending reminder letters; and, of course, by providing prepaid reply envelopes.
ethods of approach require considered questions. In drawing up the questionnaire, attention must be paid first to these
questions: What are your research objectives—what exactly is it that you need vitally to know? (For example, how
often do people buy, how much?)
Who are the customers to sample for this information? (For example, for do-it-yourself products, a home show crowd might
be best.)
How are you going to undertake the research? (For example, face-to-face in the street.)
you are sure of these points, and only then, you are ready to design the questionnaire. There are six simple rules to guide this
process:1. Keep the number of questions to a minimum.
Keep the questions simple. Answers should be either "Yes/No/Don't Know" or offer at least four alternatives.
Avoid ambiguity. Make sure the respondent really understands the question (avoid "generally," "usually," and "regularly").
Seek factual answers; avoid opinions.
Make sure at the beginning of the survey you have a cutout question to eliminate unsuitable respondents (for example, those
who never use your product/service).
At the end, make sure you have an identifying question to show the cross section of respondents.
The introduction to a face-to-face interview is important; make sure you are prepared, either carrying an identifying card or with a
rehearsed introduction. You may also need visuals of the product you are investigating (samples, photographs), to ensure that the
respondent understands. Make sure these are neat and accessible. Finally, try out the questionnaire and your technique on your
friends prior to using it in the street. You will be surprised at how questions that seem simple to you are incomprehensible at first to
respondents.
The size of the survey undertaken is also important. You frequently hear of political opinion polls taken on samples of 1500 to 2000
voters. This is because the accuracy of your survey clearly increases with the size of the sample.
For example, with a random sample of 250 respondents, 95 percent of surveys are right within 6.2 percentage points. With random
samples of 1000 and 6000, accuracy increases to within 3.1 points and 1.2 points respectively.
So, if on a sample size of 600 your survey showed that 40 percent of women in the town drove cars, the true number probably lies
between 36 and 44 percent. For small businesses, a minimum sample of 250 completed replies is usually recommended.
Remember, above all, however, that questioning is by no means the only or most important form of fieldwork. Visiting competitors,
visiting exhibitions, and buying and examining competitors' products (as the Japanese have so successfully done by disassembling
piece by piece competitive cars, deciding in the process where cost-effective improvements could be made) are clearly important
fieldwork processes.
Just as important, test marketing gives an opportunity to question interested customers and can be the most valuable fieldwork of
all. All methods are equally valid, and results of each should be carefully recorded for subsequent use in presentations and business
plans. Once the primary market research and market testing are complete, pilot testing of the business should be undertaken in one
location or customer segment, prior to setting targets and subsequently measuring the impact of a full regional launch.

IV CUSTOMER ANALYSIS OVERVIEW
Who wants your goods and services? You can't know too much about your customers and prospects. This calls for marketing
research. Facts and figures can elevate your marketing plans from wishful thinking to purposeful action plans. There is no substitute
for hard information.
IN ORDER TO MAKE GOOD MARKETING DECISIONS YOU HAVE TO KNOW HOW YOUR TARGET MARKETS PERCEIVE THE VALUE OF YOUR PRODUCTS
”
AND/OR SERVICES.
Your hunches, based on experience and observation, are important. They simplify market research by defining limits and setting
directions for further investigation. But they have to be substantiated. Hunches have an irksome way of being half-truths, and half-
truths can be disastrous. "I feel that there's a big market for this . . ." and "I have a hunch that we can double sales by . . ." are two of
the most common traps small-business owners fall into. Put another way, small businesses aren't destroyed from outside by
competitors or a malign fate, they self-destruct.
In order to make good marketing decisions you have to know how your target markets perceive the value of your products and/or
services. If you don't know how your company and its products are perceived, you will waste time and aim the wrong products at
the wrong markets at the wrong time.
Professional marketing consultants can get this information faster and more cheaply than you can. If your budget is tight, check
with local business schools; marketing professors sometimes do consulting work. Since most basic market research questions are
the same, this saves you from reinventing the wheel. It should cost you no more than out-of-pocket expenses. They know the
questions to ask, how to get the answers, and they will help you put this information to work ferreting out better opportunities for
you to pursue—an added bonus for your investment.
Know Your Current Customers
You can't specify target markets, segment the markets, or otherwise improve your marketing abilities without detailed knowledge
about your current customers.
Suppose your product capitalizes on the latest adolescent craze. What will you do when the next fad hits? Grow up with your
market and change with them? Cater to the tastes of teenagers forever? If you sell to individual consumers, what are they like?
What are the demographics of the market? What is the customer's age, gender, income, education level, and stage in the life cycle?
If you sell to industrial markets, who are they? What are their sales levels and geographical distributions? Who makes the buying
decision? What market segment buys which products—and what information can these people give you?
Your Customers' Buying Habits
Key pieces of marketing information are who buys what, when, where, and why. If you determine nothing more than the answers to
these questions, you will be miles ahead of most of your competitors. Gather the following basic information on each product,
product line, or service you offer:
Who makes the buying decision?
What's the size of the sale in dollars?
How many units are sold?
What is your cost per sale?
What do your customers buy?
When do they buy it?
Is their purchase seasonal?
Why do they buy it?
Where do they make the buying decision?
How do they finance their purchase?

Understanding Why Customers Buy From You
How do your customers view your products and services? This is a key research and development question. If you can understand
your products from their point of view, you can discover new ways to market your products and services, new target markets, new
profitability. For instance, if a customer has asked for a refinement of a standard product in your line, can you redesign and
repackage that product for other people? Reworking your basic products and services to fit customer demands can be a powerful
marketing tool. For example, think of:
Blister packaging of foods and medicines after the first Tylenol scare exposed the need for tamper-resistant packaging.
The ongoing simplification of microcomputers. The current generation of user-friendly computers is geared to people
unfamiliar with computers.
Overnight package delivery. Federal Express spotted a market for overnight small package and letter delivery. It was always
there; they just were the first to spot it. Their competitors are still playing catch-up.
Cash management accounts opened huge markets for Merrill Lynch. That product should have been developed by the
banking industry. However, bankers failed to notice that their customers' problems with juggling various banking and
brokerage accounts had created a mammoth opportunity.
The key marketing point: People buy solutions to problems. They buy satisfaction of their wants and needs. They don't buy
products and services. If your customers have complaints, find out why. What's their problem? How can your company help them
solve that problem?
The best way to find out why people buy your goods and services is to ask them. It helps if you give your customers a structured
survey to work with. This is an area where a professionally developed survey pays off. Call your local Small Business
Administration (SBA) office and ask for the nearest Small Business Institute program. Or check with local colleges—a customer
survey is one of those projects that costs you little and gains you much. When conducting a survey, make sure you get answers to
these three basic questions:
Where did hear of our store/product/service?
What would you like us to offer?
How can we serve you better?
Match products with the needs and wants they fulfill. Then find out who has these needs and wants, which of your target markets
you can satisfy profitably, and how you can go about repositioning some of your products to appeal to these markets. Sometimes
you will have to change the product/service mix in the process. Of course, you should keep in mind that people won't buy goods
and services they don't want, no matter how good the advertising and positioning. You can only sell them what they want to buy.
Sometimes that will be what they need. But it will very seldom be what you think you are selling.
For example: You think you sell a medical service. Your customers think they are buying a solution to a problem, a friendly ear, an
antidote to fear. Cosmetics manufacturer Helena Rubinstein was widely quoted as saying she didn't sell perfume, she sold hope.
Detroit sells transportation, not cars. Hollywood sells entertainment, not movies.
Here are other examples. If you sell to bureaucrats, remember that their number one concern is to be safe. If you sell to teenagers,
remember that they need to be in step with their peers. If you sell to a local retail customer base, remember that they buy
convenience, safety, cleanliness, familiarity, and courtesy along with your groceries or dry goods.
Apply this way of thinking to your business. What emotional needs or wants do your products satisfy? What other benefits do they
provide? Then match those benefits to your target markets.
How can you determine your market's needs and wants? Ask them. Observe them. Read trade magazines, they are full of articles
about why people buy and what triggers their purchasing decisions. Attend trade seminars. Talk with other business owners and
managers. Above all, ask your customers, whether prospective, current, or former.
Identifying Prospective Customers
Use a straightforward approach: Match the information about the most profitable products with the market segments that purchase
those products. If you can figure out why they made these purchases, and can find other sufficiently large groups with similar
characteristics, then these new groups become your best prospects. With work, they will turn into your best customers. This is an
endless process. Your target markets will change over time; your product lines and mix will change; and your business will change.
But the basic process remains constant:
Identify your profitable products and services, including those that will be profitable in the future.
Find out as much as you can about the people who buy those products and services. Who are they? What are their buying
patterns? How often do they buy? How much do they spend? What offers do they respond to?
Find other people like them. These are your hot prospects.
Identify unprofitable products, especially those that take up a disproportionate amount of time and money. Often, these are
either products in which management has a special investment, or old familiar products that have outlived their useful life.
Find out who buys these unprofitable products and services—and stop marketing to them, or switch them to more profitable
products. This may mean leaving a comfortable market for a profitable one. Remember why you're in business: to create and
satisfy your customers at an acceptable profit.
Customer Service and Planning

Truly good customer service comes from paying close attention to details. The only way to do this is to make your customers a
component of every business decision, from product, service, location, and pricing issues to staffing and training. While putting
customers at the heart of all decisions is extraordinarily tough for large companies, it works well for small businesses. That isn't to
say it's easy for small businesses—just much easier than for big ones.
An effective customer service strategy cannot be implemented until you know what your business can and cannot do. You can't just
say, "I will run a customer-centered business" and do it. Your strategy and business evolve together, posing unexpected challenges.
The culture of your business, the norms, values and expectations that you and your employees share, can change. Above all, your
customers' perceptions of your business and the competition never stay still.
Customers come and go. They move, change their buying habits, and are lost to competitors. A good rule of thumb is that your
customer base will change at least 20 percent each year—that is, you can expect to replace one customer in five every year. Each
year there are new products and services to contend with, new shifts in the economy, new competitors. The basic parts of your
strategy should remain relatively constant, but many of the details must be continuously updated. Since you sell to a shifting set of
customers, you can count on their perceptions of the value of your products and services shifting as well.
What does this mean for you? Two key points: First, you have to continuously engage in market research. You have to know what
their perceptions are, what they seek, and how they want to be served. Second, all your business plans, financing, marketing, and
personnel plans hinge on this ongoing market research. As your market shifts, so should your plans.

V INTRODUCTION TO CUSTOMERS
INTRODUCTION TO CUSTOMERS
Without customers no business can get off the ground, let alone survive. Some people believe that customers arrive after the firm
"opens its doors." This is nonsense. You need a clear idea of who your customers will be in advance, because they are a vital
component of a successful business strategy, not simply the passive recipients of new products or services.
”
WITHOUT CUSTOMERS NO BUSINESS CAN GET OFF THE GROUND, LET ALONE SURVIVE.
Knowing something about your customers and what you plan to sell to them seems so elementary that it is hard to believe that any
potential businessperson could start a business without doing so. But it is all too common—and one of the reasons why many new
businesses fail.
VI WHAT DO CUSTOMERS NEED?
WHAT DO CUSTOMERS NEED?
The founder of a successful cosmetics firm, when asked what his business did, replied, "In the factories we make perfume and in
the shops we sell dreams."
Business people usually define their business in physical terms. Customers, on the other hand, see businesses as satisfying their
needs. Compare a cheap ballpoint pen with a quality fountain pen. Basically they are very similar: they both write well, are
comfortable to hold, and have clips that hold them in place and caps that protect your pockets from ink stains. One costs $1, the
other perhaps $100. Customers pay the extra $99 for largely intangible benefits, such as status or the pleasure the pen will bring as
a gift. The makers of each pen both have successful businesses, but the needs they satisfy are poles apart.
Until you have clearly defined the needs of your potential customers, you cannot begin to assemble a product to satisfy them.
American psychologist Abraham Maslow says that "all customers are goal seekers who gratify their needs by purchase and
consumption." He classifies consumer needs in a five-stage pyramid, called the hierarchy of needs:
Self-realization
Self-esteem
Social needs
Safety
Physiological needs (hunger and thirst)
Every product or service is bought to satisfy one or more of these needs. So, for example, as people's hunger and thirst needs are
satisfied, they move up the hierarchy to satisfy other needs.
Try interesting someone who is starving and cold in "higher" things, or see how much more food you buy if you shop when you are
hungry than when you have just consumed a large meal.
Where are your customers on the needs hierarchy, and how can your product or service help them to achieve their goals?
It may also help to shape your business to distinguish between the needs of consumers of your product (for example, children who
eat the candy) and the needs of customers who make the buying decision (for example, parents who pay for the candy).

VII SEGMENTING THE MARKET
SEGMENTING THE MARKET
Market segmentation is the name given to the process whereby customers and potential customers are organized into clusters or
groups of similar types. For example, a store or restaurant has regular customers and passing sales. The balance between the two is
a fundamental issue that affects everything the business does. Also, each of these customer groups is motivated to buy for different
reasons, and the selling message has to be modified accordingly. These are some of the ways that markets can be segmented:
Demographic Segmentation
This groups customers together by such variables as age, sex, education, and income. One owner of a corner store identified two
particular groups of customers: children and local adult residents who had run out of products they would normally buy from a
supermarket. For the former, the products offered are candy, comics, pencils, and cheap games. For the latter, small sizes of such
items as butter, cereal, and detergent.
Benefit Segmentation
This recognizes that different people get different satisfaction from the same product or service. Most toothpaste manufacturers
stress the benefit of decay protection, such as the claim, "Look mom, no cavities." However, others reach a quite different market
with their "whitening" message. White teeth, with the implied attractiveness to the opposite sex, is a more important benefit to some
customers.
Geographic Segments
These arise when customer preferences vary by location. For example, the photocopy center and the bicycle courier service are very
much products of a city environment.
wners of a dried flower shop segmented the market in two ways: 1. By type of sales outlet, for example flower shops,
farm suppliers, garden centers, supermarkets, garages, airports, and street markets
By type of end use, for example commercial displays (restaurants, hotels), shop window decoration, exhibition, display, and
educational courses at colleges
Such segmentation enabled the shop to focus its selling efforts on specific outlets and users that could be located and quantified,
enabling the owners to set realistic sales goals.
Industrial markets can be similarly segmented by size and location of company (number of employees, sales volume, geographic
concentration), by category of merchandise (furniture, glass, ceramics), or by level of technology and production process (types of
buyer, service requirement).
are useful rules to help you decide on whether a market segment is worth trying to sell to.· Measurability. Can you
estimate how many customers are in the segment?
Accessibility. Can you communicate with these customers? Just knowing they are out there somewhere is not much help.
Size. A segment has to have a large number of customers, although exactly what constitutes "large" will be relative to your
business.
Open to Practical Development. Just being a large segment is not enough. The customer must have money to spend and be
able to spend it. Some government departments, for example, are restricted to buying from approved suppliers only. So they
may be large but are of no interest at all if you cannot sell to them.
One example of a market segment that has gone undeveloped for a long time is the sale of goods and services to retired people.
Several factors made this a particularly difficult segment to develop. Firstly, retired people were perceived as less adventurous.
Secondly, they were considered less likely to make expensive purchases at their stage in life. And finally, they were thought to have
less money. In recent years, all those perceptions have changed; people retire earlier, live longer, and many have relatively large
pensions. The result is that travel agencies, contractors, magazine publishers, and insurance companies have rushed out a stream of
products and services aimed particularly at this market segment.
Segmentation is an important marketing process because it helps to bring customers more sharply into focus, and it classifies them
into manageable groups. It has wide-ranging implications for other marketing decisions. For example, the same product can be
priced differently according to the intensity of customers' needs. Peak-season travel and off-season travel is an example.
Segmentation is also a continuous process that needs to be carried out periodically, for example when strategies are being reviewed.

VIII DEFINING THE PRODUCT IN THE CUSTOMERS' TERMS
DEFINING THE PRODUCT IN THE CUSTOMERS' TERMS

you know what you are selling and to whom, you can match the features of the product (or service) to the benefits that
customers will get when they purchase. Features are what a product has or is, and benefits are what the product does for the
customer. For example, cameras and film are not the end product that customers want; they are looking for good pictures.
Finally, include "proof" that these benefits can be delivered. For example: Features: We use a unique hardening
process for our machine
which means that …
Benefits: Our tools last longer and that saves you money
you can see this is true because …

Proofs: We have a patent on the process; independent tests show that our product lasts longest.
Features: Our stores stay open later than others in the area
Benefits: You get more choice when to shop
Proofs: Come and see.
Features: Our computer system is fault tolerant using parallel processing
Benefits: You have no downtime for either defects or system expansion
Proofs: Our written specification guarantees this; come and talk to satisfied customers operating in your field.
Remember, the customer pays for the benefits and the seller for the features. So the benefit will provide the copy for most of your
future advertising and promotional efforts.

IX IDENTIFY AND TARGET YOUR PRIMARY CUSTOMERS
IDENTIFY AND TARGET YOUR PRIMARY CUSTOMERS
Customers do not sit and wait for a new business to open its doors. Word spreads slowly as the message is diffused throughout the
various customer groups. Even then it is noticeable that, generally, it is the more adventurous customers who first buy from a new
business. Only after these people have given their seal of approval do the "followers" come along.
This adoption process, from the 2.5 percent of innovators who make up a new business's first customers to the stragglers who will
not buy from anyone who has not been in business for 20 years, is most noticeable with innovative products, such as computers, but
the general trend is true for all businesses.
Until you have sold to the innovators, significant sales cannot be achieved. So an important first task is to identify these customers.
The moral is that the more you know about your potential customers at the outset, the better your chances of success.
At the minimum, your business plan should include this information:
Principal Customers
Who your principal customers are, or if you are launching into new areas, who they are likely to be. Determine in as much detail as
you think appropriate the income, age, sex, education, interests, occupation, and marital status of your potential customers, and
name names if at all possible.
Customer Purchasing Considerations
What factors are important in the customer's decision to buy or not to buy your product and/or service, how much they should buy,
and how frequently?
Many factors probably have an influence, and it is often not easy to identify all of them. These are some of the common ones that
you should consider investigating:
Product Considerations
Price
Quality
Appearance (color, texture, shape, materials, etc.)
Packaging
Size
Fragility, ease of handling, transportability
Servicing, warranty, durability
Operating characteristics (efficiency, economy, adaptability, etc.)
Business Considerations
Location and facilities
Reputation
Method(s) of selling
Opening hours, delivery times, etc.
Credit terms
Advertising and promotion
Variety of goods and/or services being offered
Appearance of company's property and/or employees
Capability and attitude of employees

Other Considerations
Weather, seasonality, cyclicality
Changes in the economy (recession, depression, boom)
Since many of these factors relate to the attitudes and opinions of the potential customers, it is likely that answers to these questions
will only be found through interviews with customers. It is also important to note that many factors that affect buying are not easily
researched and are even less easy to act upon. For example, the amount of light in a store or the position of a product on the shelves
can influence buying decisions.
You could perhaps best use the above list to rate what potential customers see as your strengths and weaknesses. Then see if you
can use that information to make your offering more appealing to them.
Market Research Data
In addition to knowing something of the characteristics of the likely buyers of your product or service, you also need to know how
many of them there are and whether their ranks are swelling or contracting. Overall market size, history, and forecasts are important
market research data that you need to assemble—particularly data that refer to your chosen market segments, rather than just to the
market as a whole.
Satisfying customers' needs or solving customers' problems must be the primary focus of any new or growing business. Customers
change, and companies must adapt to these changes; recent research has revealed that the major reason for companies losing
customers was indifference to customer complaints—not price, not quality, but indifference! You should try to view each of your
customers as a potentially valuable asset; for example, if they spend $100 a week with you for the next 10 years, that would make
each one an asset worth $50,000.
Competitors
TOPIC OUTLINE
RESEARCH ON COMPETITORS
ANALYZING THE COMPETITION
SUMMARY OF ANALYSIS OF COMPETITORS

Competitors
I RESEARCH ON COMPETITORS
RESEARCH ON COMPETITORS
Researching the competition is often a time-consuming and frustrating job, but there are important lessons to be learned from it.
Some of the information that would be of most value to you will not be available. Particularly hard to find is information relating to
the size and profitability of your competitors. Businesses, and particularly smaller businesses, are very secretive about their
finances. Because of this, you may have to make estimates of the size and profitability of various firms.
”
IT IS CRUCIAL THAT YOU MAKE AN ACCURATE DETERMINATION OF YOUR COMPETITORS.
When you begin your research, it is crucial that you make an accurate determination of your competitors. Remember, just because
businesses sell a similar product or service, that does not necessarily make them competitors. Perhaps they make the same product
but sell it in an entirely different market. (Different market here means that it could be sold in a different geographical market or to
a different demographic market.) Just because businesses sell a product or service that is different from yours does not mean that
they are not competitors. Completely dissimilar products are often substitutable for each other.
Once you have identified your competitors, you need to classify them further as "primary," "secondary," or "potential." There are
two reasons for doing this. First, you need to limit the number of firms that you will do your research on to a workable number. If
you try to research 25 firms in depth, you will not have time to do anything else. If you end up with more than 10 or 12 primary
competitors, you should probably do your research on only a sample. Second, you may want to classify competitors into primary
and secondary because your marketing strategy may be different for each group.
A source of information is local business directories. In addition to other types of information, these books list the category in
which a particular company's sales volume falls. For instance, while it will not tell you the company's exact sales volume, it may
tell you whether the company does less than $500,000 to $1,000,000 annually.
Another way to find out size and profitability totals is to read the publications that cover the business scene. The financial sections
of your newspaper and trade magazines often contain stories that can be used for research.
If you have been unable to get the necessary information from published sources, try doing some primary research. Contact the
company directly and ask them your questions. Usually, you will not get the information that you want, but occasionally this
approach does work. Next, contact the firm's suppliers or other individuals who are in a position to know or estimate the
information. Sometimes you can get an estimated figure, if not an exact one, from a wholesaler or other supplier.
Finally, you may be able to make a reasonable estimate from the bits and pieces of information that you were able to collect. This is
commonly done with the use of operating ratios. To illustrate, let us assume that you are researching a large restaurant. You are
unable to find out its annual sales volume, but after striking up a conversation with one of the employees, you find out that the
restaurant employs 40 full-time people. Because of your knowledge of the restaurant industry, you feel confident in estimating the
restaurant's payroll at $300,000 a year. From a book that lists operating ratios for the restaurant industry, you find that payroll
expenses, as a percentage of sales, average 40 percent. With these facts, you are able to estimate the annual sales volume of the
restaurant at $750,000.
Several points should be noted here. First, operating ratios are published by a variety of trade associations and businesses. For most
types of business, they are not that difficult to obtain. Second, this approach is not limited to employment ratios. You can make
estimates based upon inventory levels, rent, or other expenses. Third, learning to use this technique is not difficult. Once you
understand the use and logic of ratio analysis, you should be able to make estimates like the one above. These estimates are derived
by doing ratio analysis in reverse. Instead of taking figures and working out the ratio, you start with the ratio and work out the
figures. Fourth, the use of estimates resulting from this technique should be only a last resort or used in conjunction with estimates
derived in some other way. The reason for this is not that the ratio you found in the books may be "average," but that the particular
business may, for a variety of reasons, be far from average.
Competitors
II ANALYZING THE COMPETITION
ANALYZING THE COMPETITION
The following are some of the areas that you should cover in this section of your business plan:
Description of Competitors
Identify those businesses that are or will be competing with you. If the number is few, list them by name. If there are many, then
describe the group without naming them individually (for example, 47 charter fishing boat operators). List any expected or potential
competitors.
Size of Competitors
Determine the assets and sales volume of the major competitors. Will you be competing against firms whose size is similar to
yours, or will you be competing against giant corporations? If assets and sales volume cannot be determined, try to find other
indications of size, such as number of employees, number of branches, etc.
Profitability of Competitors
Try to determine how profitable the business is for those companies already in the field. Which firms are making money? Losing
money? How much?
Operating Methods
ch of the major competitors, try to determine the relevant operating methods. For example, what pricing strategy does each
firm use? Other operating methods, besides price, that you may consider are· quality of product and/or service
hours of operation
ability of personnel
servicing, warranties, and packaging
methods of selling—distribution channels
credit terms—volume discounts
location—advertising and promotion
reputation of company and/or principals
inventory levels
Many of the above items will not be relevant to all businesses. Location will not be relevant, perhaps, to a telephone answering
service. On the other hand, there are many items that are not listed above that may be very relevant to your business. In the used car
business, trade-in value and styling may be as relevant as the price. So it is very important for you to determine the relevant
characteristics on which you will do your research.
Competitors
III SUMMARY OF ANALYSIS OF COMPETITORS
SUMMARY OF ANALYSIS OF COMPETITORS

After you have completed your research of competitors, it is useful to summarize your findings in tabular form. You must decide
the relevant characteristics that will go into your table.
”
NEVER, EVER UNDERESTIMATE THE OPPOSITION.
When the table is complete, analyze the information contained in it to reach your conclusions. Is there a correlation between the
methods of operation and other characteristics, and the size and/or profitability of the competitors? A thoughtful analysis is
essential, because there may be many patterns shown. For instance, you may find that all the profitable companies are large, and all
the unprofitable companies are small. That would be an easy pattern to spot (and an important one, as well) because it involves only
two factors, profitability and size. However, it is more common that success and failure correlate with a number of factors that are
not always so easy to discern, even when your findings are summarized on one page.
Looking for patterns is not the only type of analysis that is needed. You may find that a company is very successful, even though its
characteristics are completely different from the other profitable firms. What factors apparently contribute to its success? Or you
may find that a company is failing despite the fact that its operational characteristics are similar to those of the profitable firms. Can
you identify the reason?
Once you have reached conclusions about the competition, relate them to your business. What is the competitive situation in the
market? Is everyone making money and expanding, or is it a dog-eat-dog situation? Are your competitors likely to be much larger
than your business is? If so, what effect will this have? Are there some operating methods that appear critical to success in this
market? If so, will you be able to operate in the necessary fashion? Are there operating methods or characteristics not being widely
used in the market that you think have merit? If so, why are they not found at present? Is it because they have been overlooked or
because they have problems that you have not foreseen?
The above are some of the questions that you will want to address. You will probably have many others. The important thing,
though, is for you to decide the general outlook for your business. At this point in your research, does it appear that you will be able
to compete successfully in this market? Do you now feel that you know what it will take in order to compete successfully? If you
can answer these two questions to your satisfaction, you have probably done an adequate job of research.
urpose of your competitive analysis is, therefore, as Harvard's professor Michael Porter has researched, twofold:· To
determine where your competitors are weak and how they might retaliate to your activity
To help you define what should be your product's point of difference, based on your understanding of the key factors for
success in your industry sector
Canon, for example, in developing its personal copier, set production benchmarks based on competitors' products: Copy quality
had to be as good as IBM office copiers, price slightly below major competitors, and weight below 40 pounds compared with 80
pounds for the leading competitor. This analysis forced managers to find novel ways to meet objectives in manufacturing and
marketing areas.
So, you must buy and analyze competitors' products, study competitive advertisements, and visit trade exhibitions to learn all you
can about competitors' offerings first hand. Continue to do so, since competitors, like customers, change all the time. And never,
ever underestimate the opposition.

TOPIC OUTLINE
PRODUCTS AND SERVICES OVERVIEW
ANALYZING PRODUCT AND SERVICE BENEFITS
IDENTIFYING YOUR UNIQUE SELLING PROPOSITION (USP)
RANKING YOUR PRODUCTS AND SERVICES
EVALUATING YOUR SALES PRACTICES

I PRODUCTS AND SERVICES OVERVIEW
PRODUCTS AND SERVICES OVERVIEW
If you are already in business, you already have products, services, markets, and problems. If you are about to begin a business, you
probably have a clear idea of what you will be selling, where, when, and to whom.
The leading theoretical approach to marketing demands that you first determine what your markets want, then provide a way to
satisfy them profitably. That's fine if you have the luxury of choosing your target market and product-service mix before you start a
business. Most of us, though, are limited by our experience and interests, to say nothing of other limitations such as money, family
obligations, and so forth.
What can you do if you are already in business? Make haste slowly. Change to a marketing orientation, a marketing strategy that
focuses on your customers' perceptions and demands. Understand your target markets in depth, and measure the products and/or
services you offer against the demands of those markets. You can change product and service lines over time to meet the changing
demands of your customers and prospects. But don't suddenly switch—it takes planning and time.
There are powerful constraints on the kinds of products and services you can offer: money, time, customer habits, competition, and
technology are a few. Creating demand for a new product and changing consumer buying habits are close to impossible.
Introducing a new technology can bankrupt you. The number of truly innovative products or services introduced each year is tiny.
Distinguishing Your Products and Services
Most products and services offered by small businesses are generic. While you may think that your products and services are
special, that perception is not necessarily shared by your market.
To gain a competitive advantage, do two things:
Know your products and services better than the competition knows theirs.
Know the benefits of your products and services from your customers' perspective.
Understand the benefits your customers hope to get from your products or services. Look at your business from their point of view:
Without a strong reason to think otherwise, one hardware store is like another; lawyers are interchangeable; seafood markets are
where you buy fish. What's so special about your screwdrivers, or wills, or halibut?
People buy benefits. What they want is not necessarily what you think you are selling. They buy solutions to their problems. They
buy satisfaction of needs and wants. The solutions and satisfactions are the benefits they buy along with your products and/or
services. Benefits are the "what's in it for me?" that your customers seek.

II ANALYZING PRODUCT AND SERVICE BENEFITS
A careful analysis of products, product lines, and services goes beyond a list of what you currently sell, and far beyond product
knowledge. Not that this is unimportant information—in fact, that's where analysis of products and services begins.
Categorizing Your Products and Services
It's important to organize and categorize your products or services. Before you can match up products and services with markets,
you have to form a clear idea of what needs and wants those products and services satisfy. Any product or service can satisfy a
number of wants and needs for the same people. While people don't always know why they buy what they buy, you can draw some
useful conclusions by observing and inquiring.
Think of several applications for each product or service, and several sets of wants and needs they satisfy. By communicating these
applications, wants, and needs to your target markets, you greatly increase the market appeal of those products and services. The
more reasons to buy you can communicate to your target markets the better.
The Purpose of Your Products and Services
For each product or service, ask: What is its purpose? What needs or wants does it satisfy for your customers? For your prospects?
Take a look at the kinds of needs and wants you should consider, and then jot down the most obvious ones each product or service
satisfies. This will give you a better understanding of the markets you can reasonably target and provide the underpinnings of your
entire marketing strategy.
The Earning Potential of Your Products and Services
For each product or service, ask: Is it a breadwinner now, or will it be in the future? Is it past its prime? Should it be continued? Or
be given more support (financial, personnel, promotional)? You want to put your resources to work where they'll have the best
long-term payoff. Where is the product or service in its life cycle?
Expanding Your Product Lines
Should you expand current product lines? Sometimes sales of one product reveal customer needs for another. If a significant
number of your customers ask for a product that would be an extension of your current lines, the risk may be worth taking. Your
old customers take less effort to cross-sell than it takes to create new customers.
Ask questions about the product line quarterly. It's easy to get so attached to the old product line that we forget to update it.
Meanwhile the market moves away.
Knowing Your Competitors' Products and Services
What are the particular advantages/disadvantages of your products or services as compared with competitive products and services?
Product/service comparisons tip you off to competitive positioning, so take special note of the differences between your target
markets versus your competitors' as well as differences between the benefits you advertise versus the ones they do.
Your Product Mix
Are you offering the right mix of products and services to meet your customers' demands? It's important to get a feel for why
people might buy a particular product or service. Don't just guess. Ask your customers, focus groups, trade authorities, or other
sources of information to fill out buying questionnaires.
Even though individuals ultimately make all purchasing decisions, their approach will differ depending on whether they are buying
for themselves or buying for their company or institution. The you-don't-get-in-trouble-buying-IBM attitude is a good example of
bureaucratic thinking. The IBM choice isn't necessarily the best, but it's viewed as defensible.
Comparisons are another place you may discover new applications, new product ideas, new opportunities. Look outside your
business. Maybe the competition has a wider, deeper, or more specialized line. Would this make sense for your business? Maybe
their packaging is better, or their distribution or delivery system is superior. Perhaps their advertising is stronger. Compare product
mix, product lines, or other areas where you might be able to gain a competitive edge or blunt a competitive weakness.
Improving Your Products and Services
Have you made improvements in your products or services lately? Are you planning any? You don't want your products and
services to become stale, old hat, or rendered obsolete by your competitors' changes. This is more than a question of style or fads.
"New! Improved! . . ." is a great marketing line, especially if the product or service is really new and improved. Improvements are a
powerful positioning tool: Who doesn't want the improved model?
Developing New Products and Services
What new products and services are you planning? Should you develop new ones? Fill out a product line? Meet competition? Or
should you prune back your product line to the most profitable elements?
The most powerful marketing strategy for any small business is to locate and dominate market niches too small or too specialized
for bigger companies to profitably invade. Quite often this calls for new products or highly specialized sets of skills. However, any
new product or service cries out for strong marketing justification. Otherwise, it's all too easy to squander your resources on
exciting but unprofitable new ventures.
Replacing Your Products and Services

What are possible substitutes for your goods or services? Are there any new developments (technological, social, economic) that
might result in new ways of satisfying your market's wants and needs? Not all dangers and opportunities are obvious. The only way
to keep abreast of what might affect your business is read, attend trade or other business shows, and keep alert. Your chances of
picking up on an opportunity are far greater than your competitors' if you periodically review and analyze your product and service
lines.
New Applications for Your Products and Services
Repackaged products or new applications of old products open up new marketing opportunities. Huge marketing gains have come
from new applications of old products and services. You can sometimes repackage or reposition a product or service to appeal to a
wider market, or for a deeper penetration of your current markets. A classic example of repackaging: Arm & Hammer significantly
increased its sales potential when—in addition to advertising its baking soda as a leavening agent—it began marketing its product
as a refrigerator cleaner and air freshener.
Ask questions. Ask your customers, suppliers, sales force, and other interested persons how your products and services might be
used. Their answers may provide new applications that result in tomorrow's sales.
Use these ideas to rethink how your products might be marketed, and list five new applications for each of your products or
services. As an example, basketballs are used as float valves in some industrial applications. Their features of toughness, uniform
size and quality, roundness and floatability make them ideal for this purpose.
Now put these concepts together. Consider what wants and needs do your products fill; who might have these wants and needs; and
what would be the best fit between products and markets.

III IDENTIFYING YOUR UNIQUE SELLING PROPOSITION (USP)
What sets your products and services apart from the rest? For each product and service: Is it quality? Price? Convenience? Style?
Professionalism? Ask the same questions about your store, restaurant, or office. Gathering this information is the basis for
determining your unique selling proposition (USP).
Your aim is to develop an image or perception in the marketplace that you offer something special. Your neighborhood
convenience store has a unique selling proposition: You can get a loaf of bread or a jar of mayonnaise at odd hours without getting
in your car. Look at competing businesses and ask what's special about them? Can those insights help you position and define your
business? Every business has something special to recommend it. What's your claim?
Setting Your Products Apart
Here are some examples of ways companies set their products apart from the competition.
New and Improved
Matthew's Teak Cleaner took a messy, dangerous process and simplified it. Lotus took spreadsheets for microcomputers a step
further than the competition and dominated the market for business software.
Packaging
Think that L'Eggs profit comes from a superior stocking? Think again.
Pricing
BIC grabbed the ballpoint pen market with their 19-cent pen. On the other hand, lack of courage in pricing is a major weakness for
small business. Be very careful: Small businesses cannot afford to compete on price. If you do compete on price, aim to be the most
expensive, not the least expensive.
What really is the difference between McDonald's and Burger King? Better yet, think of Frank Perdue and his chickens. Chicken is
chicken is chicken—until Frank Perdue changed our perceptions of a commodity and differentiated his product from everyone
else's through advertising and promotion. You pay more for a Perdue chicken, too.
Delivery
Retail stores all over the world are being hurt by direct marketing. It's the fastest growing retail segment. Land's End, L.L. Bean,
Spiegel's, Victoria's Secret, and hundreds of other merchants let you shop at home and will quickly deliver their products to your
door.
Convenience
Look at direct marketing again. Or check out your local 7-11 Store. Even banks are beginning to be open at more convenient hours
due to the press of competition. A bank that opens Saturday morning has a big advantage over a bank that doesn't. A bank with
many automatic teller machines (ATMs) scattered around their market area offers more than one that doesn't provide such access.
Follow-up Service
After-sale efforts are strong product/service differentiators. Wherever you live, Sears will service your washing machine. Today.
That's a deliberate policy—and sharply contrasts with discount stores. Both after-sale service and price chopping are valid
marketing strategies. But Sears makes more money in the long run by stressing service, not price. A medical practice that routinely
involves its patients in their own health care by sending reminders will lose fewer customers than one that saves money by not
keeping in touch.

IV RANKING YOUR PRODUCTS AND SERVICES
RANKING YOUR PRODUCTS AND SERVICES
What product or service is the best contributor to your overhead and profits (O&P)? What is your worst?
This is a simple accounting question. If you cannot tell quickly which product you sell makes the most money (net of all expenses,
including marketing and sales costs, bad debts, and so forth), then you'd better have a talk with your accountant. This is important
information with very direct marketing implications: Where do you make money? Where do you lose money? How can you do
more of the former and less of the latter? Can you ride your strong products more? Cull the losers? Who buys the good products?
Who buys the bad ones?
Analyzing the Risks of Your Products and Services
Where do your leading products and services fall on a product/service analysis grid? Your aim is to increase sales and profits.
Product Grid
Core Markets New Target Markets
P Old Product Old Product
R Old Customers New Customers
O (lowest risk) (risky)
U New Products New Products
C Old Customers New Customers
T (risky) (riskiest)
Ask yourself how you could sell old products to new customers, or new products to old customers before even considering selling
new products to new customers. Increasing sales of old products to old customers is normally the safest way to increase sales, but
may not provide a sufficiently large gain. Selling new products to new customers is as risky as starting a new business—perhaps
riskier, because it will sap your energy at the expense of your current business.
Labeling Your Products and Services
Label your products and services as cash cows (which provide a lot of profit for little investment), dogs (which lose money), rising
stars (which are tomorrow's cash cows), and investments in owner's ego (which are those offerings that you just can't give up; these
are tomorrow's dogs).
For now, just keep it simple. What products or services make money for you now? What products or services don't?
There may be excellent reasons to lose money for a while: gaining market share, acquiring mastery of a new technology or learning
new skills, investing today for tomorrow's profits. A current loser is not necessarily a dog or an investment in owner's ego. Nor is a
current winner necessarily good. You may miss out on an emerging market by sticking with a product too long.
The important point: Know what products and services contribute or take away from your business.
Making Changes to Your Product or Service Line
Analyzing and labeling your products and services can help you set new product/service objectives. If you decide to make changes
in these areas, or want to provide new goods for your target markets to purchase, treat these changes as seriously as any other major
change in your business. Set objectives, including costs, deadlines, and responsibility. Changes that make good business sense
should be implemented carefully and systematically, not left to chance.
Consider improved or changed products and services as you would new products or services. Don't hurry with any product change.
Let the idea stew for a while. Discuss it. Play the devil's advocate. New products have huge hidden costs that are difficult to
foresee, and seldom pay off as well or as fast as you hope.

V EVALUATING YOUR SALES PRACTICES
EVALUATING YOUR SALES PRACTICES
If you're already in business, don't assume that your current method is the only way you can move your products or services.
Examining and improving selling methods is part of a business's marketing plan. Consider the following points.
Your Sales Practices
How are you currently selling your products? For example, a medical service might be sold solely by referral from a local hospital
or by word of mouth—or through more assertive methods. Most stores rely on location, plus a minimum amount of advertising in
local media.
You might be able to add sales by adding direct mail, using sales representatives, or direct, face-to-face selling. What changes
might result in more sales? Are you cross-selling to your current customers, or merely taking orders?
Competitors' Sales Practices
What are your competitors' selling practices? If they are adding salespeople, or changing their advertising strategies, or moving to a
new location, better take note. How do they get new customers and retain old ones?
Shop the competition, either in person or by using a consultant who will provide a detailed analysis of their sales methods. While
you're at it, have your own business shopped. Close to 75 percent of lost customers complain of rude, discourteous, or poorly
informed salespersons—and the irate customer complains to an average of 11 other people. That's powerful negative word-of-
mouth.
Sales Follow-Up Procedures
What follow-up do you have after the sale? Your best prospects are your current customers. If you don't provide adequate service
after the sale, that customer will end up buying from your competition.
If you never have repeat customers as part of your marketing strategy, fine. But for 99 percent of businesses, repeat sales are vitally
important (and frequently overlooked in the scramble for new customers). Since you buy customers with your advertising and
promotion efforts as well as your products and services, it makes sense to hang onto them as long as possible.
How should you follow up? Direct mail is excellent and can be low-cost. Phone calls are good. Maintain a service desk or a call-in
number. Set a strong return policy favorable to the customer.
Follow-up differentiates your business from all the others. Satisfied customers talk. So do unhappy customers. Think of the effort
Sears puts into its service department. Think of how a good auto dealer provides after-sales service, or how L.L. Bean and
Nordstrom's handle customer returns.
Sales Training
What kind of sales training do you provide? Salespeople aren't born knowing how to sell, and while you may be able to impart all
the product knowledge they need, sales training is a highly specialized field.
If you don't provide sales training, why not? If it's on the grounds that sales training is something like advertising, an expense that
you'd rather not incur, you can count on being swamped by your competitors. You can find excellent sales training workshops
through the Small Business Administration's SCORE and SBDC programs, at local colleges, or just ask your chamber of
commerce. Sales training is as good an investment as you can make in your business's future. It has a very fast payback, improves
morale, and puts money in your pocket. What more could you ask for?
TOPIC OUTLINE
ADVERTISING AND PROMOTION OVERVIEW
BUDGETING FOR ADVERTISING AND PROMOTION
HOW TO PROMOTE YOUR BUSINESS
SELECTING AN AD AGENCY
LEGAL STANDARDS FOR ADVERTISING
MARKETING METHODS PROS AND CONS

I ADVERTISING AND PROMOTION OVERVIEW
With the possible exception of pricing, nothing causes more unnecessary confusion than advertising and promotion. If you have
done your work so far, you will have a good feel for your markets—what they are looking for (their "what's in it for me?"), what the
competition offers those markets, what the members of the market read, watch, listen to, and attend. That massive amount of
information makes it possible to tailor a message to your markets that will stir them to action.
Advertising Myths
There are three myths to avoid.
Word-of-Mouth Advertising
1. "You can rely on word-of-mouth advertising." This is usually an excuse to not invest in advertising rather than a good way to
gain customers. Passive word of mouth is always ineffective. Happy customers tell an average of 0.7 other people if they have had
a positive experience with you. Unhappy customers tell 11 to 20 other people.
Word-of-mouth advertising can be made to work, but it requires discipline and a programmatic effort: Ask customers for referrals.
Make it easy for them—give them brochures, flyers, samples, or whatever it takes to make your case. Then follow up. Used in
conjunction with other media, word of mouth can be extremely effective.
Creative and Clever Advertising
"Only highly creative and clever advertising works." Not true. Clearly targeted and consistent advertising works. It does not have to
be creative and clever. Some of the most effective promotions merely keep the name of a small business in the public's view—
sponsoring a local team, running a consistent advertisement in the local paper, making sure to use the Yellow Pages. Nothing
particularly creative or clever here, so it won't win prizes, but it works.
Self-Made Advertising
"You can save money by doing your own advertising." This is a bogus savings. Ineffective advertising is expensive. Advertising
that does work, that informs your markets honestly, accurately, and effectively, is worth its high initial costs. Professionals can put
your message together faster and make it more effective than you can—especially since you can tell them who your customers are,
what and how and when and why they buy from you rather than from the competition.
Advertising Guidelines
Effective advertising and promotion is built on specific information, not on hunches or hopes. Conducting a periodic promotion
audit can help you promote your business to its markets more effectively. Your advertising and promotional efforts are adjuncts to
more direct methods of selling, not substitutes.
Advertising and promotion are not substitutes for selling. Advertising is what you do when you can't have a salesperson work
directly with the prospect. Advertisements can make prospects aware of you, make them receptive to your products and services,
and even stir them to call or write for more information. But they can't replace ongoing sales efforts. Effective creativity is based
on thorough knowledge of products, target markets, and competitive conditions. Your advertising agency has to know what your
objectives are, what your budget is, and when you plan to run your campaign.
Advertising and promotion have to be managed the same way you manage other parts of your business. You have to know what
resources you can afford to commit to them, what you want to accomplish, and how to form a coherent strategy that ties in with
your broader business and marketing goals.
Many small businesses have discovered that marketing geared at drawing online visitors is the single most important part of
building an online presence. Simply creating a Web site does not guarantee that users will visit it, so many businesses now
advertise on the Internet through online city guides and yellow pages. An online yellow page directory allows companies to expand
their geographic reach beyond local customers, connects businesses with consumers who are ready to buy, and gives users the
ability to search the directory's listings in a variety of ways. To learn about placing such an advertisement in the Microsoft
Sidewalk™ Yellow Pages listings, call 800-291-0633 or visit http://www.microsoft.com/sidewalk/opportune.htm.

II BUDGETING FOR ADVERTISING AND PROMOTION
BUDGETING FOR ADVERTISING AND PROMOTION
If you don't have an advertising and promotion budget, you don't have a rational marketing plan.
Advertising and promotion is a cost of doing business. Rigorously and ruthlessly suppress the urge to cut it at the first sign of
sluggish sales. Build it in, like payments on plant or equipment or any other fixed cost, and be prepared to increase it. An
advertising campaign is like a military campaign. Attaining your objectives calls for careful allocation and concentration of your
resources so you can successfully implement your strategy.
You buy and maintain market share with advertising as well as with product, service, distribution, and other business efforts. When
sales are off, increase advertising efforts. When sales are up, you may be able to ease off a little—run ads less often, for example.
Reducing advertising costs when business starts to slow down will only accelerate a sales slump, not save your profitability.
Developing an Advertising Budget
How do you set an advertising budget? Here are some common methods:
Percent of Sales
You can get trade figures to show how others in your industry allocate their advertising dollars—it may be available from the trade
association serving your industry. Figure this on your anticipated or desired sales, and treat advertising and promotion as a fixed
expense. If sales levels or goals increase, change the advertising budget. Do not cut advertising budgets in response to short-term
sales slumps.
This method is inflexible, and doesn't reflect the cost structures and marketing goals of your business. It does provide a good
baseline. If you differ seriously from industry standards, have a good reason for that deviation and be prepared to justify that
deviation to your banker.
Flat Dollar or "Leftover" Budget

This is sometimes arrived at by adding all the other expenses and then allocating what's left to advertising. Another way: take last
year's advertising expenses and increase it a set percentage or amount.
This leaves your advertising unbudgeted, campaigns incomplete, and your marketing efforts gutted. Flat dollar budgeting is far and
away the most popular budgeting method for small-business owners, which should provide a competitive opening for you to take
advantage of.
Project-by-Project or "Whim" Budgeting
While this approach may enrich your advertising agency, it is effectively no budget at all. It lets you reduce advertising without
noticing that you are doing so. It does have great flexibility, which is a strength if used in conjunction with a budget for ongoing
advertising and promotional efforts.
Flexible Budgeting
Set a lower limit based on experience, industry standards, and sales goals. Then be prepared to increase it, on a project basis, to take
advantage of opportunities or to turn a sales slump around.
Smart small-business owners use two budgets to support their promotional campaigns. The first is a percentage of sales or flat-
dollar budget for ongoing advertising and promotional expenses, while the other is a discretionary budget (project budget) with
well-defined applications and dollar limits.
Budgeting Pointers
Promotion = Time + Money. It's useful to take into consideration the availability of both time and money when developing your
promotion budget.
Time
Time must be set aside for:
Long- and short-term market planning. This should be done annually with key staff involvement.
Strategic planning for promotions. This should be done semiannually with key staff or ad agency involvement.
Discussion of marketing and promotional goals and objectives. This should be done quarterly with all staff involvement.
Discussion and evaluation of specific promotional activities and materials. This should be done before and after each
campaign with all staff involvement.
Implementation and scheduling. This should be done monthly or as necessary with involvement by you and your ad agency.
Other important time-intensive promotional efforts include development and production of materials, all public relations activities,
development and purchase of mailing lists, coordination of bulk mailings, writing and mailing individual letters and proposals,
telephone, mail, and personal follow-up of promotional efforts.
Money
Money must be set aside for:
Public relations and general information materials.
Printing
Photography
Sponsorship of events
Open houses
Mailings
Internet (Web page)
Community service advertising
Donations
Memberships (Rotary, chamber of commerce, service clubs)
Targeted product and service campaigns.
Copywriting and design fees
Media placement costs
Photography, typesetting, and graphic costs
Printing
Bulk mail (fulfillment)
Mailing lists
Studio and talent costs of radio/TV spot production
Advertising agency fees other than copy and design

Incomplete campaigns eat up money. You might as well burn the cash and save the time; you'd come out ahead. When setting up
your promotional schedule, check with your advertising agency to make sure that you have allotted sufficient time and money to
complete your ad campaigns.

III HOW TO PROMOTE YOUR BUSINESS
HOW TO PROMOTE YOUR BUSINESS
When working with an advertising agent or public relations expert to establish a promotional campaign, the leading items on
their agenda will be to determine: What business are you in?
What do you want to accomplish with your advertising, publicity, or promotion?
What do you sell?
To whom?
What are your sales and marketing goals?
What's your budget?
What's your timetable for achieving your goals?
If these seem to be familiar questions, they are. Advertising and promotional campaigns begin with your current situation, rely on
the budgetary guidelines to help you reach your goals, and demand thorough knowledge of what your business is and wants to
become. And as you may already know, these are time-consuming questions to answer. Quick answers just aren't enough. You need
facts, documentation, analysis, and more facts.
You can simplify and streamline much of the research and groundwork that effective advertising and promotion requires. Most of
the work can and should be done by you. After all, it's your vision and experience and intuition that make your business special.
It's a good idea to have an advertising agent critique your groundwork and research. You may have missed some information or
misread the situation.
Your Advertising Plan

An advertising plan (including promotional efforts) involves eight steps. Once you know your advertising/promotional budget and
your objectives, you can set down a preliminary plan.
Step 1
Identify long-term objectives. These are objectives a year or more out. As always, make them as precise as you can: dollar or unit
sales, time frames, persons responsible for attaining them, some indication of the resources you can allocate to achieving them.
Step 2
Define short-term objectives and priorities. What do you want to get done next month, next week, tomorrow?
Step 3
Assemble resources. Have your in-house information available. A sketch of your options and priorities is helpful. Have your
business plan near to hand.
Step 4
Select an advertising agency to guide you through the thickets of media selection and production scheduling.
Step 5
ule projects. This is the heart of your advertising plan, and calls for a large calendar to help establish timelines. For each
advertisement or project, ask yourself: Where will it run?
What is the "street date" when it will appear?
What size will it be?
How much will it cost to prepare?
What is the media cost?
Production Timelines
Print Ad Two-Color Coupon Letter/Press Release

Brochure
Choose publication 1-7 days Not applicable Not applicable 1-3 days
Assign tasks/hire professionals 1-2 days 1-2 days 1-2 days 1 day
Write 1-4 days 1-7 days 1-2 days 1-3 days
Edit 1-2 days 1-3 days 1 day 1-2 days
Design 1-4 days 1-7 days 1-2 days 1-2 days*
Get estimates for Not applicable 1-3 days 1-2 days 1 day
printing/choose printer
Photography 2-7 days* 2-7 days* Not applicable 2-7 days*
Illustration 2-7 days* 2-7 days* Not applicable Not applicable
Paste-up 2-4 days 2-7 days 1-2 days 1-2 days*
Printing/proofing Not applicable 1-3 weeks 1-3 days 1-3 days
Total time 1-4 weeks 2-8 weeks 1-2 weeks 1-3 weeks
* If necessary.
Important considerations to keep in mind throughout the plan are timing, repetition (will you get bored with the ad before your
prospects and customers are aware that it's running?), and reinforcement. Ads alone don't sell—but they create awareness and
support your other sales efforts. You must spell out deadlines and assign responsibility to one individual (perhaps yourself) to make
the most of your budget.
Step 6
Choose media.
Step 7
ications for ads. This step is often handled by an ad agency, but if you do it yourself, be sure to include: · Purpose of the ad:
What do you want to accomplish?
Preferred approach: Hard sell? Soft sell? Humor? Fit the approach to your customers and your desired image.
Size and frequency of ad.
A creative budget.
Deadlines.
Step 8
Evaluate the results. Unevaluated advertising might give you some short-run advantages, but if you can learn from advertising and
promotional experiences, your advertising can become more effective.
an test many elements of your advertising by following traditional methods. The following work; they have been well proven.
Offer coupons.
Offer sales of certain items.
Split runs of your ad. For example, run your ad in a national magazine only to certain geographic areas.
Track inquiries. For example, ask people to "write Department XYZ" for more information.
Look for patterns of response (timing, numbers, percentages).
Keep a scrapbook of your ads and other promotional efforts. Keep one for your competitors, too.
Ask your staff what they think of the ads.
Ask customers what they read and watch.

IV SELECTING AN AD AGENCY
Questions to ask when shopping for an advertising or public relations agency:
What process does your agency use in analyzing client needs?
A successful program includes as much or more planning as execution. You want to be sure that the agency has the "mental
horsepower" to see beyond the obvious and move your promotional programs beyond the limits of your own abilities.
Once you've determined my needs, what is the process used to position my company?
The agency has to be your partner in developing a creative strategy for your business. What processes do they use to develop your
communications goals? Why?
How do you measure the effectiveness of your strategies?
Results can be measured in attitude changes, exposure, awareness, sales increases, specific information requested—and other ways.
Make sure you are comfortable with their measurement plans, and that you understand why those are valid measurements. Be very
leery of "You can't measure the results, but…" excuses. If it can't be measured, you can't afford it.
How do you keep us informed about your activities?
You should get tear sheets, comprehensive and understandable billing, and full explanations of what is going on upon your request.
The smoke-and-mirrors approach is fine for movies, but not for your investment.
Who else have you worked with?
Find out if the agency has worked with other companies similar to yours. What success (and horror) stories do they have? Whom
may you contact?
Customers, both happy and unhappy, provide the least biased information about how well performance matched expectations.
Describe a successful program for a business like ours.
What were the goals of the program? What strategies and tactics did the agency use? How did they measure success?
You want to separate fact from selling. Ask for names and numbers.
What are your relationships with the media?
If the campaign is public relations (PR or unpaid advertising), what types of relationships does the firm have with the media? Is that
firm on a first-name basis with influential people in your field?
Nothing is as helpful as a friend in high places. PR firms work to establish these relationships, and are (usually) proud of them.
How do you approach creativity?

How is creativity measured? How does the agency involve clients in the creative process?
The aim is to find out if they value creativity as a tool (good) or as an end in itself (bad). This is a judgment call you have to make
—once again, smoke and mirrors are fine for entertainment, but not for your money.
What important clients have you lost in the past year?
Why did the agency lose them? Request that you speak with them.
An agency that badmouths a former client will eventually badmouth you. Every agency loses clients to their competition; good
agencies know why and aren't ashamed or antagonistic about it.
Who will be working on our account day-by-day?
This question is the most important of all. You want to have experienced talent working for you, not the newest hire. You can't
afford to train beginners. Make sure the agency's top talent is working for you.

V LEGAL STANDARDS FOR ADVERTISING
LEGAL STANDARDS FOR ADVERTISING
Both federal and state laws regulate advertising. Under the law, your ad is unlawful if it tends to mislead or deceive. This means the
government doesn't have to prove at an administrative hearing or in court that the ad actually fooled anyone, only that it had a
deceptive quality. Your intentions don't matter either. If your ad is deceptive, you'll face legal problems even if you have the best
intentions in the world. What counts is the overall impression created by the ad, not the technical truthfulness of the individual
parts. Taken as a whole, your ad must fairly inform the ordinary consumer.
In addition, if your ad contains a false statement, you have violated the law. The fact that you didn't know the information was false
is irrelevant.
The Federal Trade Commission (FTC) is the main federal agency that takes action against unlawful advertising. State and local
governments also go after businesses that violate advertising laws; usually this is the responsibility of the state attorney general,
consumer protection agency, and local district attorney. Consumers and competitors may also be able to proceed directly against the
advertiser.
Over the years, the FTC has taken action against many businesses accused of engaging in false and deceptive advertising. A
significant number of those administrative actions have been tested in court. By and large, courts have upheld even the most
stringent FTC policies. For the most part, the FTC relies on consumers and competitors to report unlawful advertising. If FTC
investigators are convinced that an advertisement violates the law, they usually try to bring the violator into voluntary compliance
through informal means. If that doesn't work, the FTC can issue a cease-and-desist order and bring a civil lawsuit on behalf of
people who have been harmed. The FTC can also seek a court order (an injunction) to stop a questionable advertisement while an
investigation is in progress. In addition, the FTC can require an advertiser to run corrective ads, which are ads that state the correct
facts and admit that an earlier ad was deceptive.
Most states have laws, usually in the form of consumer fraud or deceptive practices statutes, that regulate advertising. Under these
laws, state or local officials can seek injunctions against unlawful ads and take legal action to get restitution to consumers. Some
laws provide for criminal penalties (fines and jail), but criminal proceedings for false advertising are rare unless fraud is involved.
Consumers often have the right to sue advertisers under state consumer protection laws. For example, someone who purchases a
product or services in reliance on a false or deceptive ad might sue in small claims court for a refund or join with others (sometimes
tens or thousands of others) to sue for a huge sum in another court.
A competitor harmed by unlawful advertising or faced with the likelihood of such harm generally has the right to seek an injunction
and possibly an award of money (damages) as well, although damages are often difficult to prove. Such cases usually are based on
one of two legal theories: unfair competition or commercial disparagement.
How to Stay Out of Trouble
The following rules will help keep your ads within safe, legal limits.
Be Accurate
Make sure your ads are factually correct and see that they don't tend to deceive or mislead the buying public. Don't show a picture
of this year's model of a product if what you're selling is last year's model, even if they look almost the same.
Be truthful about what consumers can expect from your product. Don't say ABC pills will cure headaches if the pills offer only
temporary pain relief. Don't claim a rug shampooer is capable of removing all kinds of stains when in fact there are some it won't
budge.
Waterproof or fireproof means just that—not water-resistant or fire resistant under some circumstances. The term polar, when
attached to winter gear, suggests that it will keep people warm in extreme cold, not that it's just adequate when the temperature
drops near freezing.
Get Permission
Does your ad feature someone's picture or endorsement? Does it quote material written by someone not on your staff or employed
by your advertising agency? Does it use the name of a national or international organization such as the Boy Scouts of America or
the International Red Cross? If so, get written permission.
Under U.S. copyright law, the fair-use doctrine allows limited quotations from copyrighted works without specific authorization
from the copyright owner. In some circumstances, this doctrine provides legal justification for the widespread practice of quoting
from favorable reviews in ads for books, movies, plays, and even vacuum cleaners. However, with the exception of brief quotes
from product or service reviews, you should always seek permission to quote protected material. For more on the fair use doctrine
and many other aspects of copyright law and practice, see The Copyright Handbook: How to Protect and Use Written Works, by
Stephen Fishman (Nolo Press).
Treat Competitors Fairly
Don't knock the goods, services, or reputation of others by giving false or misleading information. If you compare your goods and
services with those of other companies, double-check your information to make sure that every statement in your ad is accurate.
Then check again.
Have Sufficient Quantities on Hand
When you advertise goods for sale, make every effort to have enough on hand to supply the demand that it's reasonable to expect. If
you don't think you can meet the demand, state in your ad that quantities are limited. You may even want to state the number of
units on hand.
State law may require merchants to stock an advertised product in quantities large enough to meet reasonably expected demand,
unless the ad states that stock is limited. California, for example, has such a law. In other states, merchants may have to give a rain
check if they run out of advertised goods in certain circumstances. Make sure you know what your state requires.
Watch Out for the Word Free
If you say that goods or services are free or without charge, be sure there are no unstated terms or conditions that qualify the offer.
If there are any limits, state them clearly and conspicuously.
ssume that you offer a free paintbrush to anyone who buys a can of paint for $8.95 and that you describe the kind of brush.
Because you're disclosing the terms and conditions of your offer, you're in good shape so far. But you'll want to avoid the
following pitfalls: If the $8.95 is more than you usually charge for this kind of paint, the brush clearly isn't free.
Don't reduce the quality of the paint that the customer must purchase or the quantity of any services (such as free delivery)
you normally provide. If you provide a lesser product or service, you're exacting a hidden cost for the brush.
Disclose any other terms, conditions, or limitations.
Be Careful When Describing Savings
You should be absolutely truthful in all claims about pricing. Be sure to describe all sale offers clearly and completely.
Observe Limitations on Offers of Credit
advertise that you offer easy credit unless it's true. A business that's not careful in this area can be charged with engaging in
an unfair or deceptive practice that violates the FTC law. You don't offer easy credit if: You don't extend credit to people
who don't have a good credit rating.
You offer credit to people with marginal or poor credit ratings, but you require a higher down payment or shorter repayment
period than is ordinarily required for creditworthy people.
You offer credit to poor risks, but after all the fine print is deciphered, the true cost of credit you charge exceeds the average
charged by others in your retail market.
You offer credit to poor risks at favorable terms but employ draconian (although legal) collection practices against buyers
who fall behind.
If you advertise specific credit terms, you must provide all relevant details, including the down payment, the terms of repayment,
and the annual interest rate.
Copyright Fred S. Steingold 1997, Legal Guide for Starting & Running a Small Business, Volume 1, published by Nolo Press, Inc.

VI MARKETING METHODS PROS AND CONS
As you begin to research marketing and advertising methods, the numerous options can seem overwhelming. By identifying the
factors that are most critical to your campaign (such as budget, time, creative resources, visibility, the type of message you want to
communicate, etc.), you'll be better able to zero in on the methods most likely to achieve your goals. The following list provides
you with an overview of the advantages and disadvantages of 16 basic marketing methods. Compare them to each other as well as
against your criteria. Then explore further the methods that appear most suited to your business's needs.
Newspapers
Newspaper Advantages
Your ad has size and shape, and can be as large as necessary to communicate as much of a story as you care to tell.
The distribution of your message can be limited to your geographic area.
Free help is usually available to create and produce your ad.
Fast closings. The ad you decide to run today can be in your customer's hands two days from now.
Newspaper Disadvantages
Clutter. Your ad has to compete for attention against large ads run by supermarkets and department stores.
Poor photo reproduction limits creativity.
A price-oriented medium. Most ads are for sales.
Short shelf life. The day after a newspaper appears, it's history.
Waste circulation. You're paying to send your message to a lot of people who will probably never be in the market to buy
from you.
A highly visible medium. Your competitors can quickly react to your prices.
Magazines
Magazine Advantages
High reader involvement means more attention will be paid to your advertisement.
Less waste circulation. You can place your ads in magazines read primarily by buyers of your product or service.
Better quality paper permits better photo reproduction and full-color ads.
The smaller page (generally 8-½ by 11 inches) permits even small ads to stand out.
Magazine Disadvantages
Long lead times (generally 90 days) mean you have to make plans a long time in advance.
Higher space costs plus higher creative costs.
Classified Advertisements
Classified Advertising Advantages
Low advertising and production costs.
Motivated audience. People read the classifieds to find specific products and services.
Easy to test and measure results.
Classified Advertising Disadvantages
Small space for message means you can't provide much information.
Crowded pages and small print can make your ad hard to notice.
Yellow Pages
Yellow Pages Advantages
Almost everyone uses the yellow pages.
Ads are reasonably inexpensive.
You can easily track responses.

Yellow Pages Disadvantages
Most of your competitors are also listed.
Ads must follow a certain format and therefore are not very creative.
Radio
Radio Advantages
A universal medium that's accessed at home, at work, and while driving. Most people listen to the radio at some point during
the day.
Permits you to target your advertising dollars to the market most likely to respond to your offer.
Permits you to create a personality for your business using only sounds and voices.
Free creative help is usually available.
Rates can generally be negotiated.
Least inflated medium. During the past ten years, radio rates have gone up less than other media have.
Quick production turnaround.
Radio Disadvantages
Because radio listeners are spread over many stations, to totally saturate your market you have to advertise simultaneously
on many stations.
Listeners cannot refer back to your ads to go over important points.
Ads are an interruption to the entertainment. Because of this, radio ads must be repeated to break through the listener's "tune
out" factor.
Radio is a background medium. Most listeners are doing something else while listening, which means your ad has to work
hard to be listened to and understood.
Advertising costs are based on ratings, which are approximations based on diaries kept in a relatively small fraction of a
region's homes.
Television
Television Advantages
Permits you to reach great numbers of people on a national or regional level.
Independent stations and cable now offer new opportunities to pinpoint local audiences.
Very much an image-building medium.
Television Disadvantages
Ads on network affiliates are concentrated in local news broadcasts and on station breaks.
Creative and production costs can quickly mount up.
Preferred slots are often sold out far in advance.
Most ads are 10 or 30 seconds long, which limits the amount of information you can communicate.
Direct Mail
Direct Mail Advantages
Your advertising message is targeted to those most likely to buy your product or service.
Your message can be as long as necessary to fully tell your story.
You have total control over all elements of creation and production.
A "silent" medium. Your message is hidden from your competitors until it's too late for them to react.
Easy to test different ads or offers.
Direct Mail Disadvantages

Long lead times required for creative printing and mailing.
Requires coordinating the services of many people: artists, photographers, printers, etc.
Each year over 20 percent of the population moves, meaning you must work hard to keep your mailing lists up to date.
Likewise, a certain percentage of the names on a purchased mailing list are no longer useful.
Flyers
Flyer Advantages
Flexibility in production helps you keep costs down.
Can distribute same flyer through different means (direct mail, trade shows, street corner handouts) to increase reach.
Flyer Disadvantages
Message must be kept simple to be effective.
May require coordinating the services of many people: artists, photographers, printers, etc.
Newsletters
Newsletter Advantages
Maintains contact with regular customers without pressuring them.
Increases customer loyalty by helping clients get to know you better.
Provides useful information that builds your company's credibility.
Puts a human face on an impersonal product or service.
Newsletter Disadvantages
Can be time-consuming if you create it yourself.
Can be expensive if you hire professionals to help you write and design it.
Inefficient use of resources if your regular customer list is still small.
Must publish regularly and keep the content useful to maintain effectiveness.
Brochures
Brochure Advantages
Provides in-depth information to interested prospects.
Can be kept for reference after sales discussion, or as follow-up to coupons, ads, telemarketing, etc.
Brochure Disadvantages
Can be expensive and unnecessary if distributed to people who haven't expressed interest.
Can require vigilance to continually update its look and feel, product information, and pricing.
Telemarketing
Telemarketing Advantages
You can readily answer questions about your product or service.
It's easy to prospect and find the right person to talk to.
Cost is effective compared to direct sales.
Highly measurable results.
You can get a lot of information from a well-structured script.

Telemarketing Disadvantages
Lots of businesses use telemarketing.
Can be extremely expensive if you hire a telemarketing agency.
Web Sites
Web Site Advantages
Combines text, graphics, sound, and movement to provide information.
Interesting, useful sites build customer loyalty.
Interactive. Customers can choose the information they want and give you feedback.
Global medium.
Markets as well as sells directly to customers.
Easy to change information and correct mistakes.
Web Site Disadvantages
Little value if customers aren't online.
Web site must be marketed so customers know that it exists.
Regular updates required to attract repeat visitors.
Outdoor Advertisements
Outdoor Advertising Advantages
Low cost per thousand (CPM).

High reach and frequency for general audiences.
Can be hard to ignore.
Outdoor Advertising Disadvantages
Extremely limited message length. Best when paired with another medium.
Production costs can be expensive.
Trade Shows
Trade Show Advantages
Exposure to targeted customers who are ready to buy.
Can demonstrate and offer samples.
Trade Show Disadvantages
Exhibiting is expensive.
Detailed preplanning is required, with inflexible deadlines.
Specialty Advertisements
Specialty Advertising Advantages
Can be attention grabbers if they are done well.
Gets your name in front of people.

Specialty Advertising Disadvantages
Difficult to target your market.
Can be an inappropriate medium for some businesses.
Difficult to find items that are appropriate for certain businesses.
Effectiveness can be hard to measure.
Public Relations
Public Relations Advantages
Relatively inexpensive if you do it yourself.
Builds credibility with customers because you didn't pay for the coverage.
Provides feedback about your company's image, position, and trends.
Public Relations Disadvantages
Faulty PR efforts can hurt your company.
Can be time intensive.
PR agencies are often too expensive for small businesses.

TOPIC OUTLINE

CREATING SUCCESSFUL ADVERTISEMENTS
YOUR MARKETING MESSAGE
CHOOSING THE RIGHT MARKETING METHODS
CREATING A MARKETING CALENDAR
CREATING AN ADVERTISING BUDGET
KEEPING ADVERTISING COSTS DOWN

I ADVERTISING AND PROMOTION OVERVIEW
With the possible exception of pricing, nothing causes more unnecessary confusion than advertising and promotion. If you have
done your work so far, you will have a good feel for your markets—what they are looking for (their "what's in it for me?"), what the
competition offers those markets, what the members of the market read, watch, listen to, and attend. That massive amount of
information makes it possible to tailor a message to your markets that will stir them to action.
Advertising Myths
There are three myths to avoid.
Word-of-Mouth Advertising
1. "You can rely on word-of-mouth advertising." This is usually an excuse to not invest in advertising rather than a good way to
gain customers. Passive word of mouth is always ineffective. Happy customers tell an average of 0.7 other people if they have had
a positive experience with you. Unhappy customers tell 11 to 20 other people.
Word-of-mouth advertising can be made to work, but it requires discipline and a programmatic effort: Ask customers for referrals.
Make it easy for them—give them brochures, flyers, samples, or whatever it takes to make your case. Then follow up. Used in
conjunction with other media, word of mouth can be extremely effective.
Creative and Clever Advertising
"Only highly creative and clever advertising works." Not true. Clearly targeted and consistent advertising works. It does not have to
be creative and clever. Some of the most effective promotions merely keep the name of a small business in the public's view—
sponsoring a local team, running a consistent advertisement in the local paper, making sure to use the Yellow Pages. Nothing
particularly creative or clever here, so it won't win prizes, but it works.
Self-Made Advertising
"You can save money by doing your own advertising." This is a bogus savings. Ineffective advertising is expensive. Advertising
that does work, that informs your markets honestly, accurately, and effectively, is worth its high initial costs. Professionals can put
your message together faster and make it more effective than you can—especially since you can tell them who your customers are,
what and how and when and why they buy from you rather than from the competition.
Advertising Guidelines
Effective advertising and promotion is built on specific information, not on hunches or hopes. Conducting a periodic promotion
audit can help you promote your business to its markets more effectively. Your advertising and promotional efforts are adjuncts to
more direct methods of selling, not substitutes.
Advertising and promotion are not substitutes for selling. Advertising is what you do when you can't have a salesperson work
directly with the prospect. Advertisements can make prospects aware of you, make them receptive to your products and services,
and even stir them to call or write for more information. But they can't replace ongoing sales efforts. Effective creativity is based
on thorough knowledge of products, target markets, and competitive conditions. Your advertising agency has to know what your
objectives are, what your budget is, and when you plan to run your campaign.
Advertising and promotion have to be managed the same way you manage other parts of your business. You have to know what
resources you can afford to commit to them, what you want to accomplish, and how to form a coherent strategy that ties in with
your broader business and marketing goals.

II THE STRENGTHS AND WEAKNESSES OF YOUR BUSINESS

Questions to Answer
Taking Action

III DEFINING YOUR MARKETING, SALES, AND PROFIT GOALS
Marketing Goals
process.
Sales Goals
Profit Goals

IV CUSTOMER ANALYSIS OVERVIEW
Who wants your goods and services? You can't know too much about your customers and prospects. This calls for marketing
research. Facts and figures can elevate your marketing plans from wishful thinking to purposeful action plans. There is no substitute
for hard information.
IN ORDER TO MAKE GOOD MARKETING DECISIONS YOU HAVE TO KNOW HOW YOUR TARGET MARKETS PERCEIVE THE VALUE OF YOUR PRODUCTS
”
AND/OR SERVICES.
Your hunches, based on experience and observation, are important. They simplify market research by defining limits and setting
directions for further investigation. But they have to be substantiated. Hunches have an irksome way of being half-truths, and half-
truths can be disastrous. "I feel that there's a big market for this . . ." and "I have a hunch that we can double sales by . . ." are two of
the most common traps small-business owners fall into. Put another way, small businesses aren't destroyed from outside by
competitors or a malign fate, they self-destruct.
In order to make good marketing decisions you have to know how your target markets perceive the value of your products and/or
services. If you don't know how your company and its products are perceived, you will waste time and aim the wrong products at
the wrong markets at the wrong time.
Professional marketing consultants can get this information faster and more cheaply than you can. If your budget is tight, check
with local business schools; marketing professors sometimes do consulting work. Since most basic market research questions are
the same, this saves you from reinventing the wheel. It should cost you no more than out-of-pocket expenses. They know the
questions to ask, how to get the answers, and they will help you put this information to work ferreting out better opportunities for
you to pursue—an added bonus for your investment.
Know Your Current Customers
You can't specify target markets, segment the markets, or otherwise improve your marketing abilities without detailed knowledge
about your current customers.
Suppose your product capitalizes on the latest adolescent craze. What will you do when the next fad hits? Grow up with your
market and change with them? Cater to the tastes of teenagers forever? If you sell to individual consumers, what are they like?
What are the demographics of the market? What is the customer's age, gender, income, education level, and stage in the life cycle?
If you sell to industrial markets, who are they? What are their sales levels and geographical distributions? Who makes the buying
decision? What market segment buys which products—and what information can these people give you?
Your Customers' Buying Habits
Key pieces of marketing information are who buys what, when, where, and why. If you determine nothing more than the answers to
these questions, you will be miles ahead of most of your competitors. Gather the following basic information on each product,
product line, or service you offer:
Who makes the buying decision?
What's the size of the sale in dollars?
How many units are sold?
What is your cost per sale?
What do your customers buy?
When do they buy it?
Is their purchase seasonal?
Why do they buy it?
Where do they make the buying decision?
How do they finance their purchase?
Understanding Why Customers Buy From You
How do your customers view your products and services? This is a key research and development question. If you can understand
your products from their point of view, you can discover new ways to market your products and services, new target markets, new
profitability. For instance, if a customer has asked for a refinement of a standard product in your line, can you redesign and
repackage that product for other people? Reworking your basic products and services to fit customer demands can be a powerful
marketing tool. For example, think of:
Blister packaging of foods and medicines after the first Tylenol scare exposed the need for tamper-resistant packaging.
The ongoing simplification of microcomputers. The current generation of user-friendly computers is geared to people
unfamiliar with computers.
Overnight package delivery. Federal Express spotted a market for overnight small package and letter delivery. It was always
there; they just were the first to spot it. Their competitors are still playing catch-up.
Cash management accounts opened huge markets for Merrill Lynch. That product should have been developed by the
banking industry. However, bankers failed to notice that their customers' problems with juggling various banking and
brokerage accounts had created a mammoth opportunity.
The key marketing point: People buy solutions to problems. They buy satisfaction of their wants and needs. They don't buy
products and services. If your customers have complaints, find out why. What's their problem? How can your company help them
solve that problem?
The best way to find out why people buy your goods and services is to ask them. It helps if you give your customers a structured
survey to work with. This is an area where a professionally developed survey pays off. Call your local Small Business
Administration (SBA) office and ask for the nearest Small Business Institute program. Or check with local colleges—a customer
survey is one of those projects that costs you little and gains you much. When conducting a survey, make sure you get answers to
these three basic questions:
Where did hear of our store/product/service?
What would you like us to offer?
How can we serve you better?
Match products with the needs and wants they fulfill. Then find out who has these needs and wants, which of your target markets
you can satisfy profitably, and how you can go about repositioning some of your products to appeal to these markets. Sometimes
you will have to change the product/service mix in the process. Of course, you should keep in mind that people won't buy goods
and services they don't want, no matter how good the advertising and positioning. You can only sell them what they want to buy.
Sometimes that will be what they need. But it will very seldom be what you think you are selling.
For example: You think you sell a medical service. Your customers think they are buying a solution to a problem, a friendly ear, an
antidote to fear. Cosmetics manufacturer Helena Rubinstein was widely quoted as saying she didn't sell perfume, she sold hope.
Detroit sells transportation, not cars. Hollywood sells entertainment, not movies.
Here are other examples. If you sell to bureaucrats, remember that their number one concern is to be safe. If you sell to teenagers,
remember that they need to be in step with their peers. If you sell to a local retail customer base, remember that they buy
convenience, safety, cleanliness, familiarity, and courtesy along with your groceries or dry goods.
Apply this way of thinking to your business. What emotional needs or wants do your products satisfy? What other benefits do they
provide? Then match those benefits to your target markets.
How can you determine your market's needs and wants? Ask them. Observe them. Read trade magazines, they are full of articles
about why people buy and what triggers their purchasing decisions. Attend trade seminars. Talk with other business owners and
managers. Above all, ask your customers, whether prospective, current, or former.
Identifying Prospective Customers
Use a straightforward approach: Match the information about the most profitable products with the market segments that purchase
those products. If you can figure out why they made these purchases, and can find other sufficiently large groups with similar
characteristics, then these new groups become your best prospects. With work, they will turn into your best customers. This is an
endless process. Your target markets will change over time; your product lines and mix will change; and your business will change.
But the basic process remains constant:
Identify your profitable products and services, including those that will be profitable in the future.
Find out as much as you can about the people who buy those products and services. Who are they? What are their buying
patterns? How often do they buy? How much do they spend? What offers do they respond to?
Find other people like them. These are your hot prospects.
Identify unprofitable products, especially those that take up a disproportionate amount of time and money. Often, these are
either products in which management has a special investment, or old familiar products that have outlived their useful life.
Find out who buys these unprofitable products and services—and stop marketing to them, or switch them to more profitable
products. This may mean leaving a comfortable market for a profitable one. Remember why you're in business: to create and
satisfy your customers at an acceptable profit.
Customer Service and Planning
Truly good customer service comes from paying close attention to details. The only way to do this is to make your customers a
component of every business decision, from product, service, location, and pricing issues to staffing and training. While putting
customers at the heart of all decisions is extraordinarily tough for large companies, it works well for small businesses. That isn't to
say it's easy for small businesses—just much easier than for big ones.
An effective customer service strategy cannot be implemented until you know what your business can and cannot do. You can't just
say, "I will run a customer-centered business" and do it. Your strategy and business evolve together, posing unexpected challenges.
The culture of your business, the norms, values and expectations that you and your employees share, can change. Above all, your
customers' perceptions of your business and the competition never stay still.
Customers come and go. They move, change their buying habits, and are lost to competitors. A good rule of thumb is that your
customer base will change at least 20 percent each year—that is, you can expect to replace one customer in five every year. Each
year there are new products and services to contend with, new shifts in the economy, new competitors. The basic parts of your
strategy should remain relatively constant, but many of the details must be continuously updated. Since you sell to a shifting set of
customers, you can count on their perceptions of the value of your products and services shifting as well.
What does this mean for you? Two key points: First, you have to continuously engage in market research. You have to know what
their perceptions are, what they seek, and how they want to be served. Second, all your business plans, financing, marketing, and
personnel plans hinge on this ongoing market research. As your market shifts, so should your plans.

V ANALYZING PRODUCT AND SERVICE BENEFITS
A careful analysis of products, product lines, and services goes beyond a list of what you currently sell, and far beyond product
knowledge. Not that this is unimportant information—in fact, that's where analysis of products and services begins.
Categorizing Your Products and Services
It's important to organize and categorize your products or services. Before you can match up products and services with markets,
you have to form a clear idea of what needs and wants those products and services satisfy. Any product or service can satisfy a
number of wants and needs for the same people. While people don't always know why they buy what they buy, you can draw some
useful conclusions by observing and inquiring.
Think of several applications for each product or service, and several sets of wants and needs they satisfy. By communicating these
applications, wants, and needs to your target markets, you greatly increase the market appeal of those products and services. The
more reasons to buy you can communicate to your target markets the better.
The Purpose of Your Products and Services
For each product or service, ask: What is its purpose? What needs or wants does it satisfy for your customers? For your prospects?
Take a look at the kinds of needs and wants you should consider, and then jot down the most obvious ones each product or service
satisfies. This will give you a better understanding of the markets you can reasonably target and provide the underpinnings of your
entire marketing strategy.
The Earning Potential of Your Products and Services
For each product or service, ask: Is it a breadwinner now, or will it be in the future? Is it past its prime? Should it be continued? Or
be given more support (financial, personnel, promotional)? You want to put your resources to work where they'll have the best
long-term payoff. Where is the product or service in its life cycle?
Expanding Your Product Lines
Should you expand current product lines? Sometimes sales of one product reveal customer needs for another. If a significant
number of your customers ask for a product that would be an extension of your current lines, the risk may be worth taking. Your
old customers take less effort to cross-sell than it takes to create new customers.
Ask questions about the product line quarterly. It's easy to get so attached to the old product line that we forget to update it.
Meanwhile the market moves away.
Knowing Your Competitors' Products and Services
What are the particular advantages/disadvantages of your products or services as compared with competitive products and services?
Product/service comparisons tip you off to competitive positioning, so take special note of the differences between your target
markets versus your competitors' as well as differences between the benefits you advertise versus the ones they do.
Your Product Mix
Are you offering the right mix of products and services to meet your customers' demands? It's important to get a feel for why
people might buy a particular product or service. Don't just guess. Ask your customers, focus groups, trade authorities, or other
sources of information to fill out buying questionnaires.
Even though individuals ultimately make all purchasing decisions, their approach will differ depending on whether they are buying
for themselves or buying for their company or institution. The you-don't-get-in-trouble-buying-IBM attitude is a good example of
bureaucratic thinking. The IBM choice isn't necessarily the best, but it's viewed as defensible.
Comparisons are another place you may discover new applications, new product ideas, new opportunities. Look outside your
business. Maybe the competition has a wider, deeper, or more specialized line. Would this make sense for your business? Maybe
their packaging is better, or their distribution or delivery system is superior. Perhaps their advertising is stronger. Compare product
mix, product lines, or other areas where you might be able to gain a competitive edge or blunt a competitive weakness.
Improving Your Products and Services
Have you made improvements in your products or services lately? Are you planning any? You don't want your products and
services to become stale, old hat, or rendered obsolete by your competitors' changes. This is more than a question of style or fads.
"New! Improved! . . ." is a great marketing line, especially if the product or service is really new and improved. Improvements are a
powerful positioning tool: Who doesn't want the improved model?
Developing New Products and Services
What new products and services are you planning? Should you develop new ones? Fill out a product line? Meet competition? Or
should you prune back your product line to the most profitable elements?
The most powerful marketing strategy for any small business is to locate and dominate market niches too small or too specialized
for bigger companies to profitably invade. Quite often this calls for new products or highly specialized sets of skills. However, any
new product or service cries out for strong marketing justification. Otherwise, it's all too easy to squander your resources on
exciting but unprofitable new ventures.
Replacing Your Products and Services
What are possible substitutes for your goods or services? Are there any new developments (technological, social, economic) that
might result in new ways of satisfying your market's wants and needs? Not all dangers and opportunities are obvious. The only way
to keep abreast of what might affect your business is read, attend trade or other business shows, and keep alert. Your chances of
picking up on an opportunity are far greater than your competitors' if you periodically review and analyze your product and service
lines.
New Applications for Your Products and Services
Repackaged products or new applications of old products open up new marketing opportunities. Huge marketing gains have come
from new applications of old products and services. You can sometimes repackage or reposition a product or service to appeal to a
wider market, or for a deeper penetration of your current markets. A classic example of repackaging: Arm & Hammer significantly
increased its sales potential when—in addition to advertising its baking soda as a leavening agent—it began marketing its product
as a refrigerator cleaner and air freshener.
Ask questions. Ask your customers, suppliers, sales force, and other interested persons how your products and services might be
used. Their answers may provide new applications that result in tomorrow's sales.
Use these ideas to rethink how your products might be marketed, and list five new applications for each of your products or
services. As an example, basketballs are used as float valves in some industrial applications. Their features of toughness, uniform
size and quality, roundness and floatability make them ideal for this purpose.
Now put these concepts together. Consider what wants and needs do your products fill; who might have these wants and needs; and
what would be the best fit between products and markets.

VI CREATING SUCCESSFUL ADVERTISEMENTS
CREATING SUCCESSFUL ADVERTISEMENTS
Why should you create your company's ads? Nobody else knows your goals, competition, market, and products as well as you do.
Nobody else is responsible for your company's prosperity. Nobody else has your enthusiasm. Whether you do it all yourself or
oversee an ad agency's efforts, successful ads spring from methodical work, not magic.
”
A SUCCESSFUL AD GRABS THE CUSTOMER'S ATTENTION AND GIVES A CLEAR, CONCISE MESSAGE.
A successful ad grabs the customer's attention and gives a clear, concise message. It is memorable, useful, and tells the customer
what to do next—for example, redeem a coupon, visit the store, or call for a free estimate. It gives the company a positive image
but focuses on providing what the customer needs.
No matter what media format you choose, you can apply the following seven steps to create successful ads.
Step One: THINK Before You Create
careful thought will actually save time. Be sure to ponder the following important factors before you begin to create your ad:
Examine what you want this advertisement to accomplish. Marketing experts refer to a buying cycle that every
customer experiences: initial attention, interest, desire, and then purchase. Where is your company's focus in this cycle? Are
you a new business trying to carve out your niche? Is your market familiar with your product, understanding your benefits?
Or do you need to create desire for your product?
Consider how to measure this ad's success. For example, are you trying to increase foot traffic or generate more phone
inquiries? How will you know if this ad works?
Obtain your competitor's ads, and look for holes. You may be able to piggyback on your competitors' ads; it can be easier to
sell if consumers are already familiar with your product. However, you still need to distinguish yourself from the rest of the
pack.
Analyze your target audience. What does your customer need? Time? Convenience? Selection? A burden lessened because
of your skills?
Bear in mind the economy and current events affecting your market. This demonstrates that you understand your customers,
and it can give your advertisement topical appeal. Yet beware of anything so trendy that it stales before the ad finishes its
run.
Step Two: BRAINSTORM Possible Messages
Now comes the fun part. Go ahead and get a little wacky, and dream up all the possible messages you could use to sell your product
or service to your market. What would make your customers bang on your door 24 hours a day?
Of course you must know your product to create an ad, but do you know your product from your customers' point of view? What
makes your company superior in your customers' eyes?
Differentiate between features (positive aspects of a product from your point of view) and benefits (advantages from your client's
perspective). For example, lawn fertilizer adds nutrients to your customer's lawn. That's a feature. However, the customer wants a
lush, gorgeous lawn that's the envy of all her neighbors. That's a benefit, and it may be the real reason behind her purchase.
If you keep listing features instead of benefits, go ahead and list them all. Then return to the beginning of your list and convert each
feature into a benefit from the customer's perspective. Don't forget to include the unique qualities of your company as benefits.
Talk with your most loyal customers. What do they like about your company? You might be underestimating your top advantages,
such as your excellent customer service or your convenient location.
Step Three: CHOOSE the Message
unately, you can't include all the fabulous messages you've generated. If you try (and some advertisers do), your ad will be a
confusing mess and your audience will ignore it. Following are some useful guidelines for choosing your message:
Rank your ideas according to what matters to your clients, not you.
Aim your message at your market. Don't try to snag everyone or your generalizations will attract no one.
Boil your message down to one sentence. If you think it's not possible, ask yourself if you've "Got Milk?"
Determine the advertisement's flavor. Are you shooting for a hard sell, soft sell, or humor? Which approach, what tone
would appeal to your customers?
Remember your company's image is on the line with every advertisement you create.
Pick a catchy slogan. Unlike an advertising message, a slogan stays with you for years. It should be less than ten words and
used as a connecting thread in all your marketing efforts. This slogan will appear on your business cards, on your corporate
letterhead, and everything associated with your company.
Step Four: MOTIVATE the Customer
Every advertisement should tell the consumer what to do next. For example, a magazine ad can include a coupon to clip and
redeem. A newsletter could invite the customer to call for a free consultation. A radio spot might urge the reader to ask for their
bonus gift when they buy $20 worth of merchandise. Your options are endless, but be specific. Don't say, "Come to our sale."
Instead try, "Hurry! 30%-off sale ends tomorrow!"
Step Five: WRITE the Message and the Ad
your concise message from Step Three above, and refine it a little more. Following are some important guidelines for your
message and the rest of your ad: Use active phrasing to give your writing strength and zip. Remove energy-sappers
such as would, could, might, and may. Don't be ambiguous.
Be brief, succinct, and clear. You need every person exposed to this ad to understand it 100 percent.
Avoid broad statements and clichés. "We have excellent customer service," is blah. Sharpen it by specifying, "We'll make
you happy—every time."
If appropriate, use the word "you" to create intimacy. Don't become obnoxious, but let your customers know you're speaking
directly to them.
Your essential message should still be one sentence, which you should use as your advertisement's headline. You may have more
information in the body of your ad, but the sole purpose of that information is to persuasively reinforce the central message.
Decide how you'll snare the client's attention. What interests your customers? What would make them linger over your ad for an
extra moment? A jeweler could start with an insider's tip such as, "Here's something many people don't know about buying
diamonds," which would also boost the company's credibility. Perhaps try an element of surprise or mystery to pique the customer's
interest. Make the attention-grabber relevant to your target market.
he following points in mind as you write your ad: Remember to motivate your customer. (See Step Four above.)
State how the customer can reach you. At a minimum, give your company's name and telephone number. If there's space,
add your address, e-mail address, fax number, Web site address, or other information according to what's most appropriate
for your business and the ad.
If you spell your company's name in an unusual way, such as Krazy Klean, emphasize the unusual spelling to help your
customer find you in the phone book.
Include your slogan as your tag line.
Step Six: Fill in the DETAILS
Specifics such as color, graphics, logos, typeface, and even a narrator's voice are hardworking components of your advertisement.
Be sure they reinforce, not detract from or obscure, what you're trying to say. Details may actually be the attention-grabber in your
ad—for example, using eye-catching colors in a flyer.
Step Seven: EVALUATE the Ad
You've written your ad, outlined the basics, and you know which details you're going to include. Now take a deep breath and come
back to your work at least a day later. Compare your ad to the evaluation questionnaire shown here. Answer these questions
honestly; ineffective advertising is money thrown out the window. Complete the questionnaire again after you produce the finished
ad. Beware of falling in love with your ad and losing your perspective; that's why testing it is such a good idea.
think you can't afford to wait and test your ad, weigh the cost of being late versus the cost of being wrong. Following are a
few testing tips: Try a limited run and gauge the results. Use flags such as a coupon code or a department number on
your mailing address to signal which ad is working the best.
Make sure you're comparing similar regions and demographics.
Ask every customer how they heard of you, even people who simply call for information.
Never change more than one element (such as text, paper color, jingle, and so on), or you won't know which change was the
right one. You may be impatient for results, but in the long run it's more efficient to alter only one factor at a time.
Advertising agencies and marketing research consultants are adept at testing ads. Invest in their expertise for detailed analysis. You
can discover exactly how people respond to your ads, especially if the ads don't seem to be working and you don't know why.
© Microsoft, 1998.

VII YOUR MARKETING MESSAGE
YOUR MARKETING MESSAGE
Marketing is primarily about communicating. It's using words, images, sounds, and ideas to inform and influence your target
customers. To make the most of your marketing budget and to ensure maximum results, you need to choose what you communicate
carefully. Well-crafted marketing messages form the foundation of your communications.
”
YOUR MARKETING MESSAGES MUST INFLUENCE CUSTOMERS AND PERSUADE THEM TO CHOOSE YOUR PRODUCT OVER THE COMPETITION.
es communicating with customers, good marketing messages help your company achieve the following objectives:
Differentiation. Marketing messages show how your company or products differ from the competition.
Shaping of perception. People are bombarded by thousands of marketing messages a day. Clear, consistent marketing
messages help shape their image of you.
Consistency. Whether in person or in print, it's important to have every employee and marketing material describe your
company and its services or products in the same way.
Focus. Strong marketing messages help you focus your communications so that you're not tempted to veer away from your
strategy.
Increased sales. Your marketing messages must influence customers and persuade them to choose your product or service
over the competition.
oping marketing messages is a creative process that brings together everything you know about your product or service, your
customers, and your competitors. Using this information, you should define the following critical components of your
message: · Features and benefits
Customer profile
Positioning
Unique selling proposition (USP)
Key messages
The tools you need include market research, competitive analyses, product information, and industry reports.
makes good marketing messages? Successful messages have the following characteristics: Customer-focused. They
should answer the customer's "What's in it for me?" questions.
Solution-oriented. Customers buy products and services to solve a problem or need. For example, house cleaners do more
than vacuum floors and clean bathrooms. They save the customer's time so that she can focus on other activities.
Emotional. Marketing messages tap into customer needs by appealing to feelings. While a home alarm system deters
burglars, its emotional value lies in making the occupants feel safe and worry-free.
Concise. You have minimal time to make an impression on customers, so you must focus on one main message in any given
marketing communication.
Above all, your marketing messages must support your marketing goals and company mission.
Developing Messages
When you develop your product's (or service's) marketing messages, you must consider what the product does, why customers buy
it, and how it differs from the competition. These three elements—product, customer, and competition—join together to form your
company's unique selling proposition (USP). Once you've defined your USP, which is similar to a mission statement, you can
develop supporting marketing messages for use in brochures, print advertisements, press releases, and more.
Product
The easiest place to begin is with your product. Use the Features and Benefits worksheet provided here to describe your
product's features and benefits. In addition to tangible features, consider including services, performance, quality, style, and
company personnel. As you complete this worksheet, remember the difference between features and benefits. A feature
describes what your product does. A benefit explains why the feature is important. Sample features and benefits include the
following (formatted as Feature/Benefit): · Cup holders/Never spill coffee or soda again, even on tight curves
Antilock brakes/Stay safe in slippery situations
300,000 mile warranty/Don't worry about maintenance
Customer Profile
Without knowing your customers, it's hard to develop strong marketing messages. Like most companies, you'll probably be
surprised to learn what customers value most about your product. Because their needs are different from yours, customers usually
pick something other than the newest or "coolest" feature as their favorite. This is important to remember as you prioritize your top
features and benefits. Ask customers to rank them for you.
Take advantage of every customer interaction to learn more about the needs and problems that drive purchase decisions. Use
surveys, trade shows, sales calls, satisfaction reports, focus groups, and more to build your customer profile.
Competition
The third messaging component is the competition. Understanding how you relate to the competition helps you explain how your
product is different and why it's better. Ultimately, competitive positioning helps your customers make purchase decisions.
For this step, gather all competitive marketing materials you can find. Clip ads, review press releases and published articles, visit
your competitors' Web sites, look at brochures, analyze their packaging, and scout their locations. Buy something from a
competitor, or ask your friends to use their services to get a true customer experience.
Positioning
Next, determine your positioning. Positioning defines the market niche you focus on relative to the competition. Sometimes,
positioning is as simple as saying "Best-selling minivan" or "The world's favorite airline." However, leading the market isn't the
only position available. You can position your company based on customer service, pricing, quality, delivery, innovation, style, and
so on.
One way to determine positioning is to choose two qualities or benefits that are common to several companies in your industry.
Draw a graph with two intersecting lines. The vertical line represents the first quality; the horizontal line represents the second
quality. Then, plot your competitors along the graph to see who occupies certain positions and where there are competitive
opportunities.
For example, a new hair salon wants to target working women. The owner knows that price is not important to the target customers.
In fact, customers perceive higher prices as higher quality and service. What matters are flexible hours so women can get their hair
cut after work. The owner draws a graph with prices along the vertical axis and hours along the horizontal. By plotting her
competitors along the graph, she sees that the high-end salons work only during office hours while the less expensive salons stay
open late. The owner sees an opportunity to provide high-cost, high-quality services with appointment hours after 5 PM.
After reviewing product capabilities, customer needs, and competitive positioning, you should have a strong sense about which
features and benefits are most important to your customers.
Unique Selling Proposition
The unique selling proposition (USP) describes the benefits your product provides to specific customers. Like a mission statement,
it takes a lot of information and synthesizes it into one or two sentences that convey the essence of your marketing messages.
USPs often take the form of "For [customers], [product name] is the [product type] that [top benefit]"—for example, "For working
professionals living in Marysville, Buddy's Dog Care is the dog walking service that provides loving care and playful activities for
dogs left alone during the day."
Because of its awkward construction, the USP is generally created for internal purposes, but you will still use it to write key
marketing messages, tag lines, ad headlines, and more.
Key Marketing Messages
Finally, take your USP, customer profile, positioning, and product benefits and write four or five supporting marketing messages.
Use these statements to illustrate the USP or highlight areas of secondary importance. Keep marketing messages benefit-oriented,
and use individual features and benefits to support each marketing message.
you've compiled your key marketing messages, you can use them in the following ways: · Create a tag line
Develop a logo
Write an ad headline
Prepare sales presentations
Testing
you've created your messages, test and evaluate them. Ask colleagues and customers for feedback. You should also ask
yourself the following questions about your USP and messages:· Are they easy to remember?
Are they unique?
Are they true?
Are they believable?
Are they distinctive?
Are they timeless?
Are they relevant?
Are they applicable?
© Microsoft, 1998.

VIII IDENTIFYING YOUR UNIQUE SELLING PROPOSITION (USP)
What sets your products and services apart from the rest? For each product and service: Is it quality? Price? Convenience? Style?
Professionalism? Ask the same questions about your store, restaurant, or office. Gathering this information is the basis for
determining your unique selling proposition (USP).
Your aim is to develop an image or perception in the marketplace that you offer something special. Your neighborhood
convenience store has a unique selling proposition: You can get a loaf of bread or a jar of mayonnaise at odd hours without getting
in your car. Look at competing businesses and ask what's special about them? Can those insights help you position and define your
business? Every business has something special to recommend it. What's your claim?
Setting Your Products Apart
Here are some examples of ways companies set their products apart from the competition.
New and Improved
Matthew's Teak Cleaner took a messy, dangerous process and simplified it. Lotus took spreadsheets for microcomputers a step
further than the competition and dominated the market for business software.
Packaging
Think that L'Eggs profit comes from a superior stocking? Think again.
Pricing
BIC grabbed the ballpoint pen market with their 19-cent pen. On the other hand, lack of courage in pricing is a major weakness for
small business. Be very careful: Small businesses cannot afford to compete on price. If you do compete on price, aim to be the most
expensive, not the least expensive.

What really is the difference between McDonald's and Burger King? Better yet, think of Frank Perdue and his chickens. Chicken is
chicken is chicken—until Frank Perdue changed our perceptions of a commodity and differentiated his product from everyone
else's through advertising and promotion. You pay more for a Perdue chicken, too.
Delivery
Retail stores all over the world are being hurt by direct marketing. It's the fastest growing retail segment. Land's End, L.L. Bean,
Spiegel's, Victoria's Secret, and hundreds of other merchants let you shop at home and will quickly deliver their products to your
door.
Convenience
Look at direct marketing again. Or check out your local 7-11 Store. Even banks are beginning to be open at more convenient hours
due to the press of competition. A bank that opens Saturday morning has a big advantage over a bank that doesn't. A bank with
many automatic teller machines (ATMs) scattered around their market area offers more than one that doesn't provide such access.
Follow-up Service
After-sale efforts are strong product/service differentiators. Wherever you live, Sears will service your washing machine. Today.
That's a deliberate policy—and sharply contrasts with discount stores. Both after-sale service and price chopping are valid
marketing strategies. But Sears makes more money in the long run by stressing service, not price. A medical practice that routinely
involves its patients in their own health care by sending reminders will lose fewer customers than one that saves money by not
keeping in touch.

IX CHOOSING THE RIGHT MARKETING METHODS
CHOOSING THE RIGHT MARKETING METHODS
Choosing the right marketing medium (or media) is a difficult, potentially overwhelming decision. Nevertheless, it's a decision
you'll need to make, and the most important factor to consider is your target market. Business owners often make the mistake of
blasting a high number of people with their marketing message, instead of asking whether they're reaching the right people. When it
comes to selecting your media wisely, you'll find that intensive market research really pays off.
”
MARKETING EXPERTS ESTIMATE AN AD REQUIRES 3 TO 21 EXPOSURES BEFORE CONSUMERS TAKE ACTION AND BUY.
Matching Your Market to the Right Media
Identifying your customer is a crucial step, one that you must complete before you can gauge which media would work the best for
your business. And then, once you understand your market, you must research the possible ways to get your market's attention.
Does your market read the newspaper? Listen to the radio? Drive past billboards every day?
Your local library has most of the information you need. Save time and energy by asking a librarian to help you. Also try the
business libraries of community colleges, government publication libraries, and corporate libraries. Many of them are open to the
public. If their personnel resources are limited, you may need to write or call ahead and schedule an appointment. It will help if you
take the time to familiarize yourself with some standard types of business reference materials.
Category Usefulness Some Common Titles
Consumer profile data These volumes analyze regional Demographics USA by Market Statistics
demographics, shedding light on where
your customers are.
Lifestyle Market Analyst by Standard Rates
and Data
Values and Lifestyles Report by Stanford

Research Institute (SRI)
Association listings Do your customers belong to groups or Gale's Encyclopedia of Associations

clubs? Associations can provide
information about trends and surveys,
sell advertising space in their newsletters
and magazines, or even give out their
member directories.
National Trade and Professional Association
Directory
Marketing magazines Magazines offer monthly updates on American Demographics also has a Web site
demographic and marketing trends in an at http://www.demographics.com, featuring
easy-to-read format, not just columns of a searchable archive. Check back issues of
numbers. their Marketing Tools and Forecast
publications, too.
Media analysis Updated regularly, these books present Standard Rate and Data Service divides
comparisons of U.S. media rates and their directories into categories such as
their market demographics. "Consumer Magazines" and "Network
Television."
Simmons Study of Media and Marketsfrom
the Simmons Market Research Bureau
(SMRB)
Frequency vs. Reach
By understanding frequency versus reach, you'll get the most marketing bang for your buck. Frequency is the average number of
times an audience is exposed to an ad. High frequency means you run your ads often. Reach is the number of people in your target
audience exposed within a given time period. Effective reach usually results from using several different media options. However,
it's expensive to shoot for both frequency and reach by repeatedly exposing your entire market to your ads.
Marketing experts estimate an ad requires 3 to 21 exposures before consumers take action and buy. This is why one-shot
advertising fails. Yet just because you ran an ad multiple times, it doesn't mean that everyone in your market saw it each time.
Generally, your audience will catch your ad once every three times you run it. So frequency is obviously important, but on a limited
budget it often sacrifices reach. The table shown here describes circumstances in which you should put more emphasis on one or
the other.
Frequency (running ads often) Reach (large target audience)
Narrow target market New product or new sales promotion
Fiercely competitive market Many new buyers on the horizon
Product purchased frequently Product purchased during one season
Low brand loyalty, need to remind customers often High brand loyalty
Limited advertising budget Can afford several diverse media
Since few small businesses have deep pockets, they need to achieve high frequency with the most reach in their most important
markets (heavy users, for example) while keeping costs down.
Additional Factors
ng target market, frequency, and reach as your premier concerns, following are more factors to consider when weighing
different media options: Response rate. How many responses can you expect, compared to the total number of
people exposed to an ad? This helps you determine how much it costs to attract a customer. Consult marketing-trend
newsletters and advertising salespeople for estimates, although actual numbers will vary.
What you can do well. How much time will this type of media consume? Will it take you away from the other aspects of
running your business? Do you have expertise with this medium, or will you need to hire someone and trust his or her
judgment? How often will you need to meet with an ad agency to oversee the project?
Time to launch. How much lead time is required before putting this type of ad into circulation? Can you wait that long?
Affordability. Consider your marketing budget as an investment; it can take a minimum of four to six months to see
increased sales. Some experts advise calculating how much new business is needed to pay for a specific ad, but that can be
shortsighted. Usually, advertising has a cumulative effect; not just your ads, but your public relations efforts and customers'
referrals garner sales. If you don't spend enough for an effective ad, you're squandering your money.
Media appropriateness for your product. Would your product's vibrant colors look best in a magazine ad? Would a
television demonstration be more impressive? Would the immediacy of newspapers highlight your big sale?
What the competition is doing. Which media have your competitors not used? Why not?
Market attentiveness. Will your market pay attention to this or that medium's ads? For example, will your market surf the
Internet and see your Web site?
Media credibility. Media with high audience acceptance and trust lend a positive image to your company—for example,
advertising in Time magazine or hiring a well-respected radio spokesperson. However, credibility can be expensive.
The CPM Issue
As you evaluate what you can afford, don't be swayed by advertising salespeople who claim that a low CPM (cost per thousand
audience members) reigns above all other considerations. It doesn't. Remember, the audience needs to be your market, and it's
smarter to pay a higher CPM if you'll reach more people who would buy your product.
Compare CPM between media only for the same target audience. To calculate CPM, take the advertisement cost, multiply by 1000,
and then divide by the number of people in the audience: $ad cost × 1000 = $ ÷ audience = $cost per thousand.
Selecting More Than One Medium
best choice isn't clear, you might pick several media to improve your reach. Following are a couple rules of thumb to keep in
mind when using more than one medium: All media should feature the same approach and message to reinforce your
campaign's effectiveness. Don't confuse your audience.
Decide which media would overlap successfully. You may choose one medium you can develop quickly plus another that
takes more time to develop but with better reach.
Optimizing Your Media Choices
wing are several techniques that can help you use your media effectively but still keep your costs down: Test your message
on less expensive media that still hits your market. When you've perfected your message, go on to more expensive media
options if necessary (if that's where larger numbers in your target market are).
Plan at least one year of marketing at a time so that you don't bail out before your efforts pay off. It will be harder to launch
a campaign than to keep it going, so don't give up prematurely.
Use pulsing to conserve your time and financial resources. Pulsing is advertising on a continuous basis but at a low level.
Periodically, you reinforce your efforts with waves of heavy advertising. You never completely disappear from your
customer's radar, but you don't spend as much time and money maintaining an aggressive campaign.
When you're ready to consider individual media options, you'll want to carefully weigh the advantages and disadvantages of each of
the various media at your disposal. You might also want to create your own marketing-media rating chart. (A final
recommendation: When your marketing campaign is well under way, return to your ratings chart every 6 to 12 months to reevaluate
your best options.)
© Microsoft, 1998.

X CREATING A MARKETING CALENDAR
CREATING A MARKETING CALENDAR
A marketing calendar is one of the most powerful tools you can use to launch a successful advertising campaign. No matter which
media types you choose, a well-organized calendar will save time, lower costs, and increase the campaign's effectiveness.
A calendar helps you:
Marshal your efforts into an integrated plan. It's important to eliminate haphazard strategies or efforts that nibble away at
your time and marketing budget.
Avoid procrastination by breaking tasks into small steps you can accomplish while you run the rest of your business.
Hit a specific deadline. A marketing calendar can help you recognize early on if you're in danger of not meeting your
schedule.
Minimize your worries by giving you a place to write down every task, who will do it, and when. You won't have to keep it
all in your head.
Boost your campaign's impact by reminding you to confirm at certain points in the production cycle that the message is on
target.
Even if you hire an ad agency to help you, you are ultimately responsible for your message, methods, and budget. A calendar
signals when you should block out time to make decisions and track the agency's progress.
Why not just make notes in your daytimer or desk calendar? Chances are, your daytimer is overflowing. You already have too
much to do, and adding isolated chores to the bottom of your to-do list isn't going to give your campaign the impetus or importance
it needs to succeed. A unified, coherent calendar demonstrates how several small tasks over time become one large, smartly
executed advertising push. It also illustrates what will happen if you procrastinate.
Creating Your Calendar
First off, don't attempt to use one of those free promotional calendars you have sitting around. Calendars that display one week or
month at a time turn your marketing efforts into piecemeal activities, as you flip from page to page trying to remember what's
supposed to happen when. A Gantt chart—a chart specifically designed to plan and track projects, and that shows you the
relationship between your progress and time frame—gives you the big picture and encourages you to optimize all your resources.
Brainstorm everything you need to do, from choosing your strategy and media to evaluating your campaign's success, and write it
all down. Think about additional duties that may not seem directly related to marketing, such as training your staff to respond to
potential clients with the correct information. Include time for testing and double-checking your marketing message.
Next, estimate how long each task will take. Consult outside experts or colleagues who have conducted similar marketing
campaigns to firm up your estimates. Then identify which tasks depend on previous tasks. For example, you can't mail a flyer until
it comes back from the printer. However, in the meantime you can assemble your mailing list and prearrange a mailing party to
stuff envelopes. Consider trying Microsoft Project or other time management software designed to accommodate task
dependencies.
Your calendar demonstrates your commitment to the campaign. Print it, enlarge it, and post it on the wall so you and your
employees can't miss it. Make convenient copies for your staff, and bring copies to meetings.
Managing Time With Your Calendar
A good marketing calendar tells you precisely what a delay will do to your efforts, and what you can do to minimize the damage.
Let's say the graphic artist you hired will be delayed for a week—by consulting the calendar you realize you're running ahead of
schedule and it won't be a problem.
Conversely, what if your publisher announces he will need seven days, not four, to print the latest brochure you're including with
every order you fill? Your calendar shows you which tasks can be juggled to save a couple of days; you drop off your job to him a
little early and still ship your orders on time.
Preventing Runaway Expenses
A calendar also helps you keep a tight leash on bills. For example, you'll know exactly what you need to prepare before meeting
with your Web site designer. A focused agenda will keep the meeting short and productive—essential if your designer charges by
the hour. Planning also reduces unexpected costs such as overnight delivery and extra fees for rush jobs. You'll have a clear idea
when payments are due, which can help you efficiently manage your finances and avoid late fees.
More Ways to Use Your Calendar
Refer to your marketing calendar when considering other aspects of your business, such as staffing and purchasing cycles. It's
unrealistic to expect you'll require an additional salesperson the day your television commercials begin, but you can consider where
you'll get that person beforehand and act the moment you need to staff up. Confirm supply orders with your vendors to make sure
you're stocked before your ads go out. Customers resent it when a company isn't prepared for its own success.
Incorporate your calendar into your marketing evaluation process. Besides planning the future, a calendar helps you examine the
past. What went well? What could be improved? When should you integrate another marketing method into your existing vehicles?
Finally, choose specific intervals—60 days after the campaign launch, 90 days, 120 days—to chart the campaign's effectiveness. A
calendar helps you maintain your patience so you don't prematurely jump ship. Most experts advise waiting at minimum 90 days,
sometimes up to a year, to judge a campaign.
© Microsoft, 1998.

XI CREATING AN ADVERTISING BUDGET
CREATING AN ADVERTISING BUDGET
Advertising your small business is so crucial to success that some consultants will tell you that money spent on advertising should
be considered a revenue item rather than an expense. Ad dollars, then, are perhaps the best example in your business of a hackneyed
phrase: "You have to spend money to make money."
”
MOST COMMONLY, AN ADVERTISING BUDGET IS CREATED ONCE A YEAR AND INCLUDES A PLAN FOR THE ENTIRE YEAR.
It's not enough, however, that you be committed to spending money on advertising your services or products. You also need a
budget, and a well-defined one at that, to keep you disciplined about your planned expenditures and focused on what they are meant
to accomplish—namely, increasing your sales. There's a nice byproduct to the creation of a detailed advertising budget: Because
you have gone through the exercise of figuring out when and where to advertise means that you have also gone through the exercise
(perhaps for the first time) of really figuring out who your customers are and how they can best be reached. This, of course, is an
essential element of business success.
Figuring Out Your Budget
As is usually the case with things that are this important, there is no one answer, no single formula for calculating how much to
spend on various forms of advertising over a given period of time. The reason? There are just too many variables. Your budget
should take into account all sorts of factors, ranging from where you will advertise—radio? television? billboards?—to the
frequency with which your ads will run to the length or size of each spot to the markets in which you choose to advertise.
ition, a whole range of details, specific to your company's immediate and long-term goals, will come into play. Before you
dig into the details of creating your budget, you should ask yourself the following questions: How old is your company?
The younger it is, the more you'll have to revise your eventual budget upward.
How fast do you want to grow? Again, the higher your desired growth rate, the more you will need to spend on advertising.
Of course, this is strongly correlated to a company's current size, with younger companies often growing more quickly.
What are your competitors doing? If your closest competition all of a sudden makes a real marketing push, you'll probably
have to counter with something similar in scope, even if it's just temporary.
Despite all these vagaries, however, three concrete methods can be used by businesses in setting up an advertising budget, each
with its own strengths and weaknesses.
Percent-of-Sales Method
Without a doubt, the percent-of-sales method is the simplest and clearest way to figure out how much your business should be
spending in ad dollars. All you have to do is forecast your gross sales, perhaps using last year's figures (if they exist and are a
reasonable guide to this year's goals), and then decide on a fixed percentage of those sales to spend on advertising. By doing some
research, you'll find that there are several ways to come up with the percentage figure that makes sense for you. For one, you can
talk to people who are in your business. If you want a broader perspective, your industry's trade publication should print some
industry averages on a regular basis. In addition, an Illinois-based firm called Schonfeld & Associates puts together an annual
report of average advertising-to-sales ratios for some 400 industries, based on all the publicly traded companies in those industries.
Trade publications like Advertising Age run a watered down version of the full report.
The biggest problem with this method is that it is almost too easy and therefore won't always serve as a reasonable guide. If, for
example, you just opened a small sporting goods store, you may be led astray by looking at Nike's percent-of-sales figure. The
reason? A company with sales of that magnitude may be able to get away with spending a smaller percent of those sales on
advertising, simply because the sheer numbers are so great.
Target Method
Sometimes called the task or top-down method, the target approach is by far the most complex and requires the greatest
understanding of the marketing process. The target method requires you to first figure out what you want your marketing dollars to
accomplish and work down from there in order to calculate how much you will spend on ads.
Let's say you run a clothing store and have figured out that in order to make money this year you need 20 customers to spend $50
each on every given day. Using the target method, you would then determine who those potential customers were, perhaps 35- to
55-year-old women in your city's greater metropolitan area. Then you would think about which media would most likely reach
those customers. Perhaps you discover that there are three radio stations in town that, between 7 AM and 9 AM weekdays tend to
have audiences that match your target. Then, for example, you would find out how much it would cost to run three ads a week on
each of the stations. This amount would be your total advertising budget.
Of course, figuring out your target is never as simple as in the preceding example; nor will your entire target market be reachable
via one medium. This is precisely why this method is so complicated: It will inevitably involve developing a budget based on a
combination of ads of different types and frequencies, placed in different media, which together in some combination will most
effectively reach your desired market.
While the target method is the most complex, it has one distinct advantage: Since it demands that the amount you spend be based
on your knowledge of how to best run your business, and not influenced by how other people run theirs, it is often considered the
most objective strategy.
Competitive Method
While not thorough enough to stand alone, the competitive method can provide you with some valuable information. The
competitive method requires an analysis of your competition, obtained either by talking to them or by keeping a watchful eye on
their advertising strategy. For the latter approach, you could, for instance, clip all of your main competitors' newspaper ads for a
few months and figure a good estimate of how much their campaigns cost; you can then use this information as a benchmark for
your own campaign.
Combining Your Budgeting Methods for Better Results
Perhaps the very best thing to do is to use some combination of all three methods. You could begin with the target method and then
use the other two as a check to see that the goals you set out to accomplish with your advertising do not throw you into Chapter 11
bankruptcy.
Usually an advertising budget is created once a year and includes a plan for the entire year. However, the methods described above
can be used at any point to evaluate and modify your existing budget. If you have a slow quarter, for example, throwing your
percent-of-sales figure out of whack, it makes sense to examine your ad expenditures for that month and analyze whether or not you
were spending the right amount of money in the right places. You'll also want to see whether there are any opportunities to cut costs
while sustaining the same level of advertising. And if your sales are far enough off your forecast, it would be a good idea to rethink
your methodology if you used the target method. Finally, it's certainly possible that your competitors will make changes to their
advertising budgets throughout the year, and you may have to adjust accordingly.
© Microsoft, 1998.

XII KEEPING ADVERTISING COSTS DOWN
KEEPING ADVERTISING COSTS DOWN
Despite the fact that good advertising can lead directly to sales and that the cost of advertising may be well worth incurring,
advertising can still seem expensive. But let's face it: You have no choice other than to advertise. You do have choices, however,
when it comes to your advertising strategies, and choosing the right strategies can really help you keep your advertising costs down.
A universal truth in advertising is this: Wasted ads equal wasted money. Before you run any advertisement in any medium, you
should know its purpose and its target, and you should be reasonably confident that you have designed it in such a way to satisfy
both. If you are starting to advertise and haven't gone through the exercise of defining your target market and determining how to
reach it, do that first. Also understand that advertising experts recognize three essential factors that should be considered when
developing an ad:
The cost of the ad
The amount of time it takes to produce
Its quality
Choose two of these as priorities, taking into account what's right for your business, including your products and services, your
budget, your target market, and your time frame.
Cost-Cutting Measures
When you're ready to begin developing ads, here are some simple methods for keeping costs under control.
Negotiating Prices
Don't be shy about trying to get an ad rep to come down from his first price. He won't laugh at you, because it happens all the time.
Of course, the medium you are dealing with will make a difference. Just consider the logistics: A newspaper or magazine does not
have a fixed amount of advertising space. If the reps sell more ads, the publication will simply print more pages to wrap around the
content. So, you may have little luck negotiating with, say, your local newspaper. Radio and television, however, are a different
story, because the amount of time available is fixed. If you find out that your local radio station has not sold airtime at a late date,
you have a reasonable chance of getting it at a reduced price.
Advertising at Your Place of Business
It's easy to forget that your location, the way it looks, and any signs you put up, are all part of your larger advertising picture. And
they are an important part, since they are generally the most permanent. Furthermore, since they are largely one-time expenses, you
can get a lot of bang for your buck. Your signage and the general look of your place of business have a large audience and offer a
lot in the way of continuity. Use both to your advantage.
Bartering
The concept of bartering hinges on the fact that, as a business owner, you may have something to offer to a media outlet that they
really need. Let's say you own a local catering business. While bartering probably wouldn't work with the ad sales staff of a
nationally distributed magazine, it may very well work with your local newspaper or radio station that really wants you to cater
their next Christmas party. And think about the economics of it all. Let's say you normally charge $2000 to cater an event of that
size and type. You can offer that service in exchange for $2000 worth of ad space or air time, but the service and product itself
really only cost you a fraction of that, when you consider the wholesale price.
Free Offers
Like bartering, promotions such as coupons, discounts, frequent-shopper cards, and refunds are founded on the notion that you have
something to offer that a lot of people may want. And the economics works just the same: A five dollar free item costs you a lot
less than five dollars, and think about the new customers you are reaching and obtaining in the process. Another benefit of such
promotions is that they can be relatively inexpensive to produce. Why? A coupon or something like it with a definite intrinsic value
doesn't need to be carefully crafted like an ad does to catch people's attention.
Thinking Co-operatively
The idea of co-op funds is a rather simple one. Here's how it works: Let's say you run a delicatessen that features a certain brand of
premium cold cuts. You talk to the folks at the cold cuts company about mentioning their product in your advertising. After all,
your ad has now become their ad as well, without altogether detracting from its purpose of bringing traffic into your store. The
bigger company simply gives you some money and you can use it toward producing your ad. The one drawback is obvious. You
will clearly have less control over the way your ad looks if you have to put someone else's logo in it. But that may be worth the fact
that it can cut your advertising costs dramatically.
© Microsoft, 1998.
Marketing and Advertising Methods

TOPIC OUTLINE
CREATING NEWSLETTERS
CREATING CLASSIFIED ADS
CREATING NEWSPAPER AND MAGAZINE ADS
CREATING DIRECT MAIL MATERIALS
CREATING FLYERS
CREATING BROCHURES
CREATING RADIO ADS
CREATING TV ADS
CREATING A WEB SITE AND WEB ADS
CREATING OUTDOOR ADS
SPECIALTY AND COMMUNITY-BASED ADVERTISING
CONDUCTING TELEMARKETING CAMPAIGNS
PREPARING FOR AND ATTENDING TRADE SHOWS
PERFORMING PUBLIC RELATIONS ACTIVITIES

I MARKETING METHODS PROS AND CONS
As you begin to research marketing and advertising methods, the numerous options can seem overwhelming. By identifying the
factors that are most critical to your campaign (such as budget, time, creative resources, visibility, the type of message you want to
communicate, etc.), you'll be better able to zero in on the methods most likely to achieve your goals. The following list provides
you with an overview of the advantages and disadvantages of 16 basic marketing methods. Compare them to each other as well as
against your criteria. Then explore further the methods that appear most suited to your business's needs.
Newspapers
Newspaper Advantages
Your ad has size and shape, and can be as large as necessary to communicate as much of a story as you care to tell.
The distribution of your message can be limited to your geographic area.
Free help is usually available to create and produce your ad.
Fast closings. The ad you decide to run today can be in your customer's hands two days from now.
Newspaper Disadvantages
Clutter. Your ad has to compete for attention against large ads run by supermarkets and department stores.
Poor photo reproduction limits creativity.
A price-oriented medium. Most ads are for sales.

Short shelf life. The day after a newspaper appears, it's history.
Waste circulation. You're paying to send your message to a lot of people who will probably never be in the market to buy
from you.
A highly visible medium. Your competitors can quickly react to your prices.
Magazines
Magazine Advantages
High reader involvement means more attention will be paid to your advertisement.
Less waste circulation. You can place your ads in magazines read primarily by buyers of your product or service.
Better quality paper permits better photo reproduction and full-color ads.
The smaller page (generally 8-½ by 11 inches) permits even small ads to stand out.
Magazine Disadvantages
Long lead times (generally 90 days) mean you have to make plans a long time in advance.
Higher space costs plus higher creative costs.
Classified Advertisements
Classified Advertising Advantages
Low advertising and production costs.
Motivated audience. People read the classifieds to find specific products and services.
Easy to test and measure results.

Classified Advertising Disadvantages
Small space for message means you can't provide much information.
Crowded pages and small print can make your ad hard to notice.
Yellow Pages
Yellow Pages Advantages
Almost everyone uses the yellow pages.
Ads are reasonably inexpensive.
You can easily track responses.
Yellow Pages Disadvantages
Most of your competitors are also listed.
Ads must follow a certain format and therefore are not very creative.
Radio
Radio Advantages
A universal medium that's accessed at home, at work, and while driving. Most people listen to the radio at some point during
the day.
Permits you to target your advertising dollars to the market most likely to respond to your offer.
Permits you to create a personality for your business using only sounds and voices.
Free creative help is usually available.
Rates can generally be negotiated.
Least inflated medium. During the past ten years, radio rates have gone up less than other media have.
Quick production turnaround.
Radio Disadvantages
Because radio listeners are spread over many stations, to totally saturate your market you have to advertise simultaneously
on many stations.
Listeners cannot refer back to your ads to go over important points.
Ads are an interruption to the entertainment. Because of this, radio ads must be repeated to break through the listener's "tune
out" factor.
Radio is a background medium. Most listeners are doing something else while listening, which means your ad has to work
hard to be listened to and understood.
Advertising costs are based on ratings, which are approximations based on diaries kept in a relatively small fraction of a
region's homes.
Television
Television Advantages
Permits you to reach great numbers of people on a national or regional level.
Independent stations and cable now offer new opportunities to pinpoint local audiences.
Very much an image-building medium.
Television Disadvantages
Ads on network affiliates are concentrated in local news broadcasts and on station breaks.
Creative and production costs can quickly mount up.
Preferred slots are often sold out far in advance.
Most ads are 10 or 30 seconds long, which limits the amount of information you can communicate.
Direct Mail
Direct Mail Advantages
Your advertising message is targeted to those most likely to buy your product or service.
Your message can be as long as necessary to fully tell your story.
You have total control over all elements of creation and production.
A "silent" medium. Your message is hidden from your competitors until it's too late for them to react.
Easy to test different ads or offers.
Direct Mail Disadvantages
Long lead times required for creative printing and mailing.
Requires coordinating the services of many people: artists, photographers, printers, etc.
Each year over 20 percent of the population moves, meaning you must work hard to keep your mailing lists up to date.
Likewise, a certain percentage of the names on a purchased mailing list are no longer useful.
Flyers
Flyer Advantages
Flexibility in production helps you keep costs down.
Can distribute same flyer through different means (direct mail, trade shows, street corner handouts) to increase reach.
Flyer Disadvantages
Message must be kept simple to be effective.

May require coordinating the services of many people: artists, photographers, printers, etc.
Newsletters
Newsletter Advantages
Maintains contact with regular customers without pressuring them.
Increases customer loyalty by helping clients get to know you better.
Provides useful information that builds your company's credibility.
Puts a human face on an impersonal product or service.
Newsletter Disadvantages
Can be time-consuming if you create it yourself.
Can be expensive if you hire professionals to help you write and design it.
Inefficient use of resources if your regular customer list is still small.
Must publish regularly and keep the content useful to maintain effectiveness.
Brochures
Brochure Advantages
Provides in-depth information to interested prospects.
Can be kept for reference after sales discussion, or as follow-up to coupons, ads, telemarketing, etc.
Brochure Disadvantages
Can be expensive and unnecessary if distributed to people who haven't expressed interest.
Can require vigilance to continually update its look and feel, product information, and pricing.
Telemarketing
Telemarketing Advantages
You can readily answer questions about your product or service.
It's easy to prospect and find the right person to talk to.
Cost is effective compared to direct sales.
Highly measurable results.
You can get a lot of information from a well-structured script.
Telemarketing Disadvantages
Lots of businesses use telemarketing.
Can be extremely expensive if you hire a telemarketing agency.
Web Sites
Web Site Advantages
Combines text, graphics, sound, and movement to provide information.
Interesting, useful sites build customer loyalty.
Interactive. Customers can choose the information they want and give you feedback.
Global medium.
Markets as well as sells directly to customers.
Easy to change information and correct mistakes.

Web Site Disadvantages
Little value if customers aren't online.
Web site must be marketed so customers know that it exists.
Regular updates required to attract repeat visitors.
Outdoor Advertisements
Outdoor Advertising Advantages
Low cost per thousand (CPM).
High reach and frequency for general audiences.
Can be hard to ignore.
Outdoor Advertising Disadvantages
Extremely limited message length. Best when paired with another medium.
Production costs can be expensive.
Trade Shows
Trade Show Advantages
Exposure to targeted customers who are ready to buy.
Can demonstrate and offer samples.

Trade Show Disadvantages
Exhibiting is expensive.
Detailed preplanning is required, with inflexible deadlines.
Specialty Advertisements
Specialty Advertising Advantages
Can be attention grabbers if they are done well.
Gets your name in front of people.
Specialty Advertising Disadvantages
Difficult to target your market.
Can be an inappropriate medium for some businesses.
Difficult to find items that are appropriate for certain businesses.
Effectiveness can be hard to measure.
Public Relations
Public Relations Advantages
Relatively inexpensive if you do it yourself.
Builds credibility with customers because you didn't pay for the coverage.
Provides feedback about your company's image, position, and trends.

Public Relations Disadvantages
Faulty PR efforts can hurt your company.
Can be time intensive.
PR agencies are often too expensive for small businesses.

II CREATING NEWSLETTERS
CREATING NEWSLETTERS
Just as a neighborhood newspaper informs people about events of interest within their community, a newsletter provides your
established clients and employees with relevant information about your services and news about any recent developments within
your company that they might care to know about.
The primary goal of newsletters is communication. They offer a wonderful means of keeping in regular contact with regular
customers, without giving them any undue pressure to buy or to commit to anything. A gardener, for example, might want to send
out a seasonal newsletter to regular customers that offers, among other handy tips, insider information on the latest trends in
hothouse roses, or the best way to deal with mosquitoes after a rainy, warm spring.
Newsletters also provide excellent customer service by allowing the customers to know you better. They should reflect your
character or the company's character; in turn, your customers will feel like they belong to a select group of insiders when they read
your newsletter.
In some cases, a newsletter can even make customers feel like they're part of a big happy family. A company that provides heating
oil for furnaces, for example, distributes one popular quarterly newsletter. Each installment of the newsletter offers, along with
information about price changes and delivery schedules, seasonal recipes from the company secretary, who also happens to be the
owner's mother. Although recipes have nothing to do with the company or its product, they put a human face on a very impersonal
service and send out the message that this company cares about more than just keeping its customers warm. When one of their
customers wrote to thank the secretary for her sugar-cookie recipe, the letter was promptly printed in the next newsletter, along with
a reprint of the recipe. This exchange, made possible through a newsletter, reinforced the message that this particular heating
company is run by folks just like their customers.
But let's face it: As a savvy businessperson, you can't afford to give away free information and spend time and money creating a
newsletter just because you like and identify with your customers. Newsletters should be viewed as marketing vehicles, although
it's important to remember that they belong on the soft-sell side of marketing. Rather than making a pitch for a specific product or
action, newsletters cultivate consumer loyalty by gently reminding the customer that you exist and are thinking of them. It's a
reminder that's surprisingly effective. Studies have shown that every dollar spent on marketing to proven customers generates five
times more sales than the same dollar spent on new clients.
Of course there is the real chance that your customer may simply throw away your newsletter and not read it at all. No marketing
method is 100 percent effective. But the better your newsletter, the more likely it is that your customer will read it. And each time
your customer reads it, the more likely it is that your newsletter will turn into a habit. Having the full attention of your customers is
just as important as giving them your full attention. One cannot happen without the other.
All of the points discussed above can also be applied to newsletters that are created specifically for company employees. A
company newsletter fosters the feeling that the employee is part of a team and helps different parts of a company communicate with
each other.
Determining Whether a Newsletter Is Right for Your Business
ery business should create a newsletter. To help determine whether a newsletter is worth your time and money, ask yourself
the following questions: Does your client base consist largely of regular, repeat customers?
Do you provide a service that customers need on an ongoing or recurring basis?
Does cultivating a long-term relationship with the customer help your business?
Does your business require the knowledge of a specialist?
Do your products, rates, or equipment change with fairly high frequency?
Is it important to keep your customers informed about upgrades in services?
Are you committed to providing information to your clients on a regular basis?
If you answer yes to most of these questions, chances are strong that a newsletter will provide you with an effective means of
maintaining regular contact with your clients.
If you are a mid-sized company, with more than 30 employees and two departments, an employee newsletter may also help nurture
company loyalty and keep crucial lines of communication open. And let's not forget the impact of open communication upon
morale: Studies have shown that employees who feel that they know what's going on with the company and have a stake in its
future are more productive and committed to their work.
Businesses that definitely shouldn't produce newsletters for clients include businesses that are not fully established in their market
and whose products and services don't lend themselves well to public discussion. However necessary a diaper service might be, for
example, it's highly unlikely that late-breaking developments in the diaper cleaning business need to be communicated to your
clients on a regular basis. Of course, there are exceptions to every rule.
Deciding on Content
Because it's entirely up to the customer to read the newsletter, you should make sure the content is interesting and relevant. But not
all newsletter writers need to take such pains. Sometimes the audience will be captivated no matter how boring the content might
seem to someone who's not part of the target audience. If your financial planner sent you a newsletter describing the performance of
each fund under his management, chances are strong you'd read each word very carefully.
It goes without saying that newsletters sent out to clients should have a different slant than newsletters sent to employees. Rules of
thumb: Content that works for clients will almost always work for employees. What works for employees, however, will not always
work for clients.
us topics that are suitable for coverage in a newsletter include the following: · Changes or updates in service
Schedule changes
Price changes and explanation
New product information
New employee introductions
Employee profiles
Letters from customers and readers
Frequently asked questions
Reminders or "To Do" lists
Seasonal or timely information
Fun filler (unusual facts, favorite quotes, recipes, or trivia)
Public relations information (such as any news about public citations and awards given to the company, its product or
services, or one of its employees; also includes news and updates about any community service, donations, or volunteer
activities)
Spin control (for example, a detailed explanation of anything negative that might have occurred, such as an accident, a
lawsuit, the closing of a branch store, layoffs, product recall, or massive price hike; best if written by someone of authority in
the company)
Pictures and graphics
Marketing and promotions (can include anything from cutout coupons to limited promotions, to advertisements, and so on)
Stories and Articles
Try to break up the page visually by using different kinds of elements, such as lines to separate different stories, boxes to highlight
important information, and tables and graphs.
When writing your stories or articles, think short. It's better to fit many short articles on a page than to stick one long piece on an
entire page. If you only have one long important piece, break up the gray space by including pull quotes, which prominently display
a catchy sentence from the article in a larger type size and different font. Of course, any story becomes more attractive with an
image. Remember that nothing catches the attention of a reader as well as an image does. (But try to make sure your art is of high
quality; pictures that are out of focus or poorly composed won't draw anyone's attention and may confuse more than they explain.)
Form and Layout
The simplest newsletter is, in fact, quite literally done in the form of a letter. You can simply use company letterhead, add a date,
and begin writing. But with so many desktop publishing options these days it's worth the extra effort to make your newsletter look
like a mini-newspaper. You can use 8½-by-11-inch paper and staple on extra pages, or fold 11-by-17-inch pages into halves to form
booklets. Or, if your budget allows, you can send it all off to a professional printer.
Most desktop publishing and word processing software will give you ways to organize text in columns, use different kinds of fonts
and point sizes, import scanned images, and add simple graphic elements like lines, boxes, and shadows.
Different pages have different layouts. Following is a checklist of elements that should be a part of every newsletter, regardless of
where they go, with suggestions on how to organize the first four pages of a multiple-page newsletter.
First Page (Face Page or Cover)
der organizing this section as follows: Flag. The name of the newsletter. Should involve the company's name in a
prominent or creative fashion. John Doe's Plumbing Gazette, for example, would work if the company's name is John Doe's
Plumbing. A landscaper whose business is called My Secret Garden might want to name his newsletter News from My Secret
Garden.
Issue date. Newsletters can run monthly, bimonthly, quarterly, biannually, or annually. Make sure the date reflects this. A
bimonthly newsletter might be dated Jan-Feb 1998; a quarterly might be dated Spring 1998 or January-March 1998.
Teasers. Suitable for longer newsletters, these elements tease the reader with a hint about what's inside. Short phrases,
quotes, or pictures make good teasers. Rule of thumb: If you need a table of contents, you'll need teasers. Another way to
solve this problem is by putting the table of contents on this page.
Main story. Your most important or interesting story should begin on this page, especially if the first page of your newsletter
is the same as its cover. Other stories of interest can begin here as well. Remember, stories that begin on the cover page can
continue elsewhere. You want to fit as many important stories and their headlines on this page as possible, to increase the
likelihood that something will catch your reader's eye.
Second Page
Place your masthead on the second page. A masthead is a list of who's who at the company and the names of all the people who put
together the newsletter. The masthead also includes circulation information, how to get in contact with the company, and pertinent
memberships.
The second page is also a good place for a Letter from the Editor feature (or from the company president or CEO). You may choose
to run this as a regular feature.
Third Page
You should place your table of contents on this page (unless you've decided to place it on the first page as discussed above), but
only if the newsletter is long enough and large enough to merit this kind of information. Also use this page for continuing stories
and new stories.
Fourth Page
Use this page for continuing stories and new stories.
Distribution and Circulation
Newsletters can be produced and distributed in various ways, suitable for every budget. Like most pieces of direct mail, you can do
much more than just mail them. Newsletters can be included with product deliveries, handed out at trade shows, placed in help-
yourself racks, or sent along with the monthly bill.
Make sure the frequency of your newsletter makes sense for your business. Businesses that bill customers on a repetitive cycle,
offer seasonal services or products, or have frequent changes in inventory may want a newsletter that fits with a certain schedule.
So now that you know what you want your newsletter to say, you'll want to produce one that will fit your budget and get distributed
in a timely fashion. And of course you'll want to have an advance idea of what your expenses will be.
Figuring Your Production and Distribution Costs
If you don't feel comfortable writing copy and don't know anyone who will write or edit your content for free, you may want to
designate someone else in your company to do so, or you might want to hire a professional. Because a newsletter is a recurring
publication, you'll need someone who can do the writing and production on an ongoing basis. You may want to contract the work
out to a freelancer or hire someone specifically to do the work regularly. In many cases freelancers (independent contractors) will
have their own computers and all the software needed to put out a professional looking newsletter, which could save you money in
the long run if you don't have the right equipment.
The same guidelines hold true for contracting graphic artists as for contracting writers or editors. In all cases, always ask for
references, work samples, and do some comparison shopping. Costs for these types of creative services can vary.
You'll also want to anticipate your paper and printing costs. These costs can vary widely, depending on the type of paper you use
and the type of printing method you use. Do you want color or glossy stock? Newsprint? Recycled paper? Do-it-yourself
photocopying is one of the cheapest ways to reproduce a newsletter, but will the results convey the right image? More expensive
options include those offered by a professional print shop. Call around and comparison shop before you commit to anything.
Remember to ask for bulk rates; often, the cost of both paper and printing goes down substantially after the first hundred sheets. If
your newsletter needs to be machine folded, stapled, glued, or stuffed into an envelope, count on additional expenses.
If you plan on mailing these newsletters, keep in mind the added cost of envelopes and postage, both first class and bulk rate.
(Nonprofit organizations may be eligible for special rates.) One way to cut costs is to turn the newsletter into its own mailer by
reserving a space on the cover page for the mailing address and stamp. Another distribution cost to consider is whether you're
buying someone else's mailing list or using your own. Keep in mind that over 20 percent of the population has recently moved,
which means that any mailing list you use will need updating—and that will cost.
Finally, if you want customers to help themselves from a self-serve stand, take into account the cost of the stand and make sure it
shows off your newsletter to its best advantage.
Establishing Your Production and Distribution Time Frames
Built into each of the cost considerations discussed above is also a time consideration. Whenever other people become involved in a
project, you have to take into account their schedules, workload, turnaround times, and reliability. Even if you do everything
yourself, you must organize the process so that your newsletter gets distributed in a timely fashion.
Begin by establishing a deadline. This deadline will be the day you want your customer to have your newsletter in hand. Work
backward from that deadline. How much time do you need for distribution? Take into account mail delivery time, during the
regular season as well as during peak holidays. How long will it take to prep the newsletter for distribution? Take into account
envelope stuffing time, if you are using them. How long will it take to print the newsletter and to order the paper you want? How
much time do you need to write the copy and design the newsletter? Have you built in a safety cushion? If you discover a mistake,
will you have enough time to correct and reprint?
Always keep published information up to date. Nothing undermines credibility more than printed information that is wrong. Plan
ahead; don't rush. Proofread and double-check all the details.
© Microsoft, 1998.
III CREATING CLASSIFIED ADS
CREATING CLASSIFIED ADS
Many businesses—small and large alike—get results from classified advertising. Once dominated by real estate, employment, and
automobile ads, classifieds today promote everything from vacation rentals and gift ideas to professional services and business
opportunities. Classifieds offer small businesses a unique marketing opportunity: inexpensive, highly effective, direct-response
advertising that reaches a concentrated audience of prospective customers.
The advantages of classified advertising include
Low advertising and production costs. Ads cost as little as $25 to run, and the publication handles all typesetting and layout.
Immediate results. People often respond to classified ads the day they appear. And since classifieds ask readers to call or
write, it's easy to measure results.
Motivated readers. People read the classifieds, unlike other newspaper and magazine sections, to find specific products and
services.
Targeted audiences. In addition to daily newspapers, advertisers place classifieds in trade and consumer magazines to reach
specific market segments.
Flexibility and testing. Thanks to low costs and easy measurement, advertisers can test and refine messages, offers,
headlines, placement and more.
Classified advertising can be used to
sell products
promote services
generate catalog or brochure requests
generate inbound telemarketing leads
Classified advertising success lies in finding the right readers, grabbing their attention, and convincing them to act.
Planning Your Classified Ad
When establishing goals and planning the concept for your classified ad, keep the following areas in mind.
Objectives
You only have room for one message per ad, so define specific objectives. Consider developing different classified ads for different
products or different market segments.
Answer the following questions:
What are you selling/promoting?
Who is the target customer?
What is the sales or response goal?
What is the budget?
Offer
Describe the ad's offer or purpose. In other words, what do you want people to do after reading your ad? Ask readers to
call for more information (request a catalog, a brochure, or get questions answered by phone)
call to schedule a service
buy a specific product
The call-to-action depends on the product. Many companies sell inexpensive products direct. But for items that cost more than $10
to $25 or that require more explanation before purchasing, use classifieds as the first step in a multi-step sale.
Placement
Identify the publications that reach your target audience, and select the appropriate categories within those publications. As you
evaluate publications, remember that you're not limited to running classifieds in newspapers. Look for publications whose reader
demographics match your target customer.
Each publication type offers different benefits for classified advertising:
Newspapers. Daily and Sunday papers reach the broadest audience in specific geographic areas.
Weekly papers. City or community papers, newsmagazines, and business journals appeal to specific audiences for targeted
messaging.
Magazines. While classified advertising in magazines is more expensive than newspapers, magazines deliver highly targeted
audiences, and readers keep magazines longer than newspapers and weeklies.
You must also consider a publication's geographic reach. For example, most newspapers reach local-area readers, but some papers,
such as the Wall Street Journal and the New York Times, have national readerships. You could extend your marketing by placing
classified ads in national papers or in local papers outside your region.
Next, look through the chosen publications for category headings. You need to decide which category best defines your product or
service. The right category might seem obvious. For example, a writer specializing in resumes would select "Resume Services."
Choose categories creatively. The same writer could also place a display classified next to the "Help Wanted" section. All of the
writer's target customers (people looking for new jobs) read "Help Wanted" ads. On the other hand, most don't read "Resume
Services." Try different categories and test for response.
Schedule and Frequency
Determine when to run the ad. The timing depends on promotional schedules, seasonal sales, and budgets. For example, a company
selling holiday decorations runs classifieds from September through November, whereas a lawn-mowing service schedules its ads
during the spring and summer. If you're running ads in the newspaper, you also need to decide which days of the week are most
appropriate for your business.
Besides deciding when to run ads, you must also determine how often to run them. This is known as frequency. Advertising
professionals often run the same ad at least three times in a row—if not more often—for optimal results.
Ad Format
Decide what type of classified ad to run: a traditional text-based classified or a display ad. The text-based classified is least
expensive and most common. Classified display ads, while still small in size, stand out thanks to graphics, logos, borders, and
different fonts. If you get good results from classified advertising, try different formats to see which works best. Some companies
find display ads more effective; others rely on standard text ads.
Fulfillment and Tracking
Before the ad runs, set up the fulfillment and tracking process. You want to be ready to sell when the phone rings. Decide who will
take calls, which literature to mail, what information you need, etc. If you expect a high volume of calls, consider hiring a
fulfillment company.
Next, set up systems for tracking results. Good data helps refine the process for future ad campaigns. Capture and record
information such as
number of calls per day
number of information requests
publication where caller saw the ad
which ad the caller saw
how many calls resulted in purchases
Budgeting
Budgeting Publications charge by word, line, or column inch for classified ads. To set up your budget, look at
placement costs
number of publications
number of categories
schedule
frequency
production costs (for display ads)
Writing the Ad
After you finish planning, it's time to write the ad. You need to attract the reader's attention in 20 words or less. Well-written
classifieds consist of
powerful headlines
succinct, factual text
easy response mechanisms
Headlines
Good headlines convince readers to stop scanning the classifieds and read your ad. Keep your headlines focused and test different
styles, such as posing a question to the reader, making a free offer, or announcing a product or service. The following headlines are
examples of different styles:
Offers: FREE CATALOG!
Benefits: EARN MONEY AT HOME
Statements: HAND-CRAFTED XMAS ORNAMENTS
Calls: ATTENTION GARDENERS!
Questions: LEGAL TROUBLES?
Company names: GINGER'S BED & BREAKFAST
Services: INTERIOR/EXTERIOR PAINTING
Text
Once you've written the headline, the text should follow easily. Although most classifieds run under 20 words, don't be afraid to use
more. At the same time, stay focused. Limit the ad to one message and its supporting facts. Use the text to provide details and pique
the reader's curiosity. For example, companies might follow the above headlines with these texts:
FREE CATALOG! Decorate for the holidays with classically styled European Christmas ornaments, wrappings and
accessories. Great gifts too. Call (800) 555-XMAS for catalog.
LEGAL TROUBLES? Call now for free, confidential advice. Legal firm with 20 years' experience specializes in
bankruptcy, taxes, and divorce. (203) 555-2343.
GINGER'S BED & BREAKFAST. Romantic Victorian getaway on Nantucket. Walks on the beach, breakfast in bed,
fireplaces in every room. Make Valentine's Day reservations now! (800) 555-9890.
Before finalizing the ad, read it aloud and ask colleagues to review it. Make sure the information is clear, correct, and complete.
Call-to-Action
Last but not least, make it easy for people to respond to your ad with a simple call-to-action. Make sure the text includes one or
several of the following items:
Telephone number (local, long distance, or 800 number)
Mailing address
Website URL
E-mail address
© Microsoft, 1998.

IV CREATING NEWSPAPER AND MAGAZINE ADS
CREATING NEWSPAPER AND MAGAZINE ADS
When you mention advertising, most people think of newspapers and magazines. Indeed, newspaper advertising commands the
largest share of advertising budgets nationwide. And magazine advertising, while it can be costly, offers prestige for your business.
eral, newspaper ads work best for the following marketing objectives: · Targeting a specific region, neighborhood, or area
Advertising a special sale
Announcing new products
Announcing a new store
Advertising specific products and their prices
zine advertising, alternatively, can be a powerful means of achieving the following objectives: · Targeting a specific
interest group
Reaching a broad audience
Positioning or branding your product or company
Advertising seasonal items
Showing your product visually with the use of full color
Whether you plan to advertise in newspapers, magazines, or both, you'll need to work with an experienced advertising copywriter
and a good graphics designer. You may want to invest time and money into developing a conceptual campaign that you can
implement over the next year. Or you could ask the writer and designer to develop a template that you can easily adapt. For
instance, if you consistently advertise six or seven product specials, your template could consist of a strong umbrella headline, a
block of copy that ties all the products together, a design where products and descriptions can be easily substituted, and a standard
address, phone, and hours copy block at the bottom. After the concept and template are developed, you could rewrite the copy for
each new ad or pay a writer a small fee to do it. For every new ad, however, you will need to have a designer involved. Not only
will the ad look better, but also a designer will make sure the ad is delivered electronically to the publication's specifications.
Many newspapers and some magazines will offer to design an ad for you. Don't let them. Your ad will be churned out by sales and
production people who have no connection with your business message or goals. Independent contractors offering services as
freelance writers and designers will give you a more professional, creative product.
Newspapers: Black and White and Read All Over
Newspapers offer you opportunities to target your message to specific geographic areas. Consider your community newspaper,
special interest newspapers, and weekend shoppers, as well as the major daily papers.
Newspaper ads are usually sold by the column inch or by the line. The standard is 14 lines to the inch. So if a newspaper charges $1
a line (most charge much less), you'll pay about $14 per column inch. An ad that is 14 inches high by two columns wide would be
$392. A standard full-sized newspaper is 22 inches high. Buy as big as you can, of course, and try to make it at least 12 inches high
so that part of your ad will be above the fold.
How often you run your ad and where you place it will be two of your biggest decisions. Buy space in the Sunday paper if you are a
retailer who is open on Sundays or if you're launching a sales promotion. If you're in the travel industry, you can get away with
buying a smaller ad in the travel section since people who might be interested in your product will know to look there. A restaurant
can get tremendous mileage by placing a small ad in a dining guide or food section. General interest merchandise and business
products will probably do best if placed in the news sections.
And remember, it's standard practice in advertising for newspapers to offer agencies a 15 percent discount. Always request an in-
house agency discount for your business.
Buying Magazine Space
Almost all publications offer frequency discounts, remnant space deals, and agency discounts. For a monthly magazine, standard
rate discounts are often given to 3-month, 6-month, and 12-month insertion orders.
wing are the ad sizes typically offered by magazines: · Full-page (buy it if you can afford it!)
Half-page horizontal or vertical (vertical is sometimes called a half-page island, which is roughly two columns wide by 7½
inches tall)
⅓ page square or vertical (vertical being one full column)
⅙ page vertical or horizontal
Specialized and niche magazines give you targeted readerships. Many national magazines offer regional editions, giving you the
panache of appearing in a national magazine while only running (and paying for) your ad in, say, a western edition. Consider trade
magazines, as well. Their highly specialized readership and low advertising rates can make them an ideal venue for many business
products and professional services.
There are two ways to approach buying a magazine ad. You could opt for a larger ad, preferably full-page, and run it a few times.
Or you could place a smaller ad and run it more frequently. There are advantages to both methods. Study the publication to see
what your competitors are doing before planning your strategy.
If you buy a full-page color ad, your ad can perform long after the magazine's publication date. Most magazines will offer to create
an easel-back sign for you that reads something like, "As seen in Big Shot Magazine." You can also order reprints, with the same
"As seen in…" message and include copies in your letters, press kits, and direct mail campaigns.
If you decide you need a consistent presence in a publication, you can put a small ad to work for you. Study the typical ad sizes,
and see how the magazine you're considering places them. A half-page horizontal ad often guarantees you a page to yourself, with
editorial space above your ad. A half-page vertical is an awkward size for publications, so you'll either get a page to yourself (with
editorial wrapped around) or a ⅙-horizontal will be placed above you. Ads are stacked like building blocks, with the largest and
bulkiest at the bottom. That makes a ⅙-horizontal a good option since it will often be placed at the top of a page. Buying a smaller
ad can be even more effective if it's grouped in a special section, such as Dining or Travel.
Always ask for right-hand page placement. Always ask for the location you want. You can pay more to guarantee a certain
placement, but you can also request it without paying an additional fee. You will probably pay a premium if you need a back cover,
inside front cover, inside back cover, or if you want your ad to be in the first few pages. (But it never hurts to ask.) And, as in
newspaper ad buying, you should always ask for your in-house agency discount.
Ad reps often offer clients remnant space. This means that after the ad closing date, some space is available and they'd rather sell it
at a discounted rate than fill it with editorial. If you regularly advertise with a company, they may offer you remnant space for a
month when you're not scheduled to run, a larger space for the same price, or remnant space in a sister publication. (Ad reps
occasionally offer remnant space in newspapers, too. If you're a frequent advertiser, you may want to have a few standard filler ads
camera-ready to drop in at the last minute and take advantage of remnant rates.)
© Microsoft, 1998.

V CREATING DIRECT MAIL MATERIALS
CREATING DIRECT MAIL MATERIALS
Direct mail is one of your easiest marketing tools, yet it is often overlooked by business owners because of its negative perception
as junk mail. But remember this: If it provides a welcome service to your prospective customers, it's not junk. To be effective,
direct mail must carry a strong sales message or a call to action, but that doesn't mean it needs to be only for bargain-basement
businesses. A colorful postcard advertising a special sale or a personal letter introducing your services can bring people to you if
you follow some direct mail principles.
Direct response advertising or direct marketing is a broad category that includes· personal letters
postcards, brochures, and coupons
catalogs
The first thing you need to know about direct mail is that it isn't cheap. The cost per thousand (CPM) can be quite expensive
compared to other print media such as newspapers and magazines. However, its impressive response rate makes it one of the most
cost-effective advertising vehicles in terms of reaching your target market.
Should you consider direct mail as part of your marketing plan? A direct mail piece or a strategic campaign can be ideal if
the following conditions are true: You have a special time-limited offer.
You are offering a discount (percentage off or buy-one-get-one-free offer).
You have a free trial offer.
You can offer something for free, such as a free consultation, free catalog, free brochure, and so on.
You want to test different ads or offers (for example, one test can offer 30 percent off, while another test offers gift-with-
purchase; or you can adjust the ad copy in tests to see whether "half off" or "save 50 percent" brings better response).
s no secret to direct mail success: It all comes down to how good and targeted your mailing list is. This fact is often
disappointing to designers and copywriters, but the fact is that the most important factors in determining direct mail success,
in order, are the following: 1. The mailing list
The offer
The ad copy
The ad design
The Great Name Grab
The importance of a good mailing list cannot be overstated. This is not just a way to reach your market; this list is your market.
Your most valuable list is your house list, which contains information on all your current customers and anyone who has contacted
you. Retail businesses can create mailing lists simply by placing a nice looking guest book near the cash register. If customers like
your store, they'll want to be notified of sales and special events.
The many computerized mailing list programs on the market can help you develop and maintain your own database. Make it a
priority to keep your house list clean and up to date, since house lists can pull double the response of an outside list.
To reach new customers, your best bet is to buy or rent mailing lists. Typically, you'll pay a fee to the list owner, such as a
magazine with its list of subscribers. You'll negotiate a fee for how many times you are allowed to use the list. Note that you are not
the owner of the list. Offer a free brochure or additional information, along with a reply card, to get potential customers to respond
directly to you. Then you can add the names and addresses of new respondents and customers to your own house-list database.
There are several individual freelancers who specialize in brokering lists and building lists. You may want to consider hiring an
individual for a consultation or to manage the entire process. Marketing professionals will tell you there's a science to buying lists,
but it's quite possible to master this science on your own, especially if you are trying to reach a local or regional market. Think of
publications, organizations, and businesses whose lists would most likely contain people who could buy your product or service.
Don't overlook trade magazines, regional magazines, or noncompeting businesses with a similar customer base.
an select and narrow your lists by looking at nearly any demographic variable, such as the following: · Companies by
type of business
Companies by employee size or sales volume
Geographic location of companies (zip codes, cities, counties, etc.)
Consumers by household income
Consumers by age of household
Consumers by zip code and location
Home owners
Making an Enticing Offer
Your goal is to sell the offer, not the product itself. For instance, if your business is retrofitting houses to make them earthquake-
safe, the goal of your direct mail piece is to sell the idea that earthquake safety is a good investment and that the reader needs more
information. Above all, get to the point quickly. Grab your reader in the first five seconds or your piece will go straight in the
recycling bin.
Make a clear offer in the headline or first paragraph of a letter. Questions and teasers can be effective openings, as long as you're
careful to keep the message specific. Write from the reader's perspective instead of your company's position. "Now you can cut
your summer water bill by 30 percent" takes a more personal tack than "XYZ Company leads the market in reducing consumer
water bills."
Beginning copywriting courses teach you to focus on benefits rather than features in ads, but direct mail gives you a bit more
leeway. You'll still want to quickly convey what your offer can do for the reader, but don't overlook specific features. If you're
selling an outdoor welcome mat, your customers are going to want to know the dimensions; if you have a computer repair business,
your customers are going to want to know which components you can fix and how quickly you can do it. If you sell business-to-
business, your copy needs to be straightforward and specific. If you sell to general consumers, you can appeal to their emotions, but
back it up with some specific information.
How Should It Look?
Direct mail is not about high design. In fact, the goal isn't even to create something memorable. What you want to do is deliver a
marketing piece that incites action now. Blue and red may not be the trendiest colors, but tests show they get strong response rates.
Consider making your offer or key point in red or some other attention-getting color.
Design becomes much more important if you are mailing a postcard or catalog. Keep a postcard simple and well designed to
reinforce your company's identity. Catalogs should have proven sellers up front or on right-hand pages. A two-page spread of best
buys or specials can be powerful.
Planning and Follow-Up
Part of planning your direct marketing campaign includes guaranteeing order fulfillment. If you're using an 800 number, have you
made arrangements to have it staffed around the clock? Do you have adequate inventory to fulfill orders? Are you promising
shipment by a certain date? If your anticipated volume is high, you may want to talk with a mail service, printer, or fulfillment
house (look in directories under Mail Services). A full-service fulfillment house can set up your toll-free number, answer all calls,
enter all data, prepare mailing, and deliver to the post office on a predetermined schedule. You can negotiate individual components
of the service or opt for full service. Find the solution that fits your budget and needs best.
In any direct marketing campaign, a follow-up plan is essential. Whether you're sending out a series of four or five letters over a
period of weeks or following up with a telephone call, make sure you follow through in a timely manner.
© Microsoft, 1998.

VI CREATING FLYERS
CREATING FLYERS
Generally speaking, a flyer is a single sheet of paper of any size that offers quick information at a glance about your business,
product, or service. What differentiates a flyer from other common forms of printed handouts, like brochures and newsletters, is its
focus on one primary message. A flyer can be used to announce that your business is moving to a new location, or a flyer can offer
new clients a discount the first time they use your services or purchase your product.
The greatest advantage of flyers is their flexibility. Flyers can be produced and distributed in various ways, suitable for every
budget. Once you decide what your primary message is, you can produce your flyer. Once you have your flyers, you can distribute
them in any way that makes sense for your overall marketing objective: Mail them as part of a direct mail campaign; slip them
under windshield wipers; hand them out at trade shows; place them in help-yourself racks; distribute them door-to-door; or offer
them to people walking down the street.
Overall Marketing Objective
To determine whether a flyer is the right medium for you, begin by identifying your overall objective. What is the purpose of this
flyer? Do you want to draw in new customers? Tell your existing clients about an upgrade in your services? What type of action do
you want the readers to take when they get your flyer?
A clear overall objective will help you determine what the actual text, or words, of your message will be—whether you write the
flyer yourself or hire a professional to do it.
Your overall objective will also help decide which portion of your target market should receive your flyer. For example, a flyer that
introduces your business to prospective future clients wouldn't be appropriate for established clients who have already proven their
interest in your services.
If your overall objective is clear, your flyer will be more effective in persuading customers to try your product or service. If you
have several objectives, or if your product needs a considerable amount of complex explanation, a flyer may not be the right form
for you. A brochure or catalog may provide a better alternative.
Crafting Your Message
Once you know your overall objective, the next step is to work on the flyer's content. What kind of impression do you want to
make? Casual? Sophisticated? Value-oriented? If you use visual graphics, they should reinforce your message, not distract from it.
If you have a company logo or trademark, now is a good time to use it. And don't overlook your own experience as a consumer.
Which flyers have you responded to? What works on you as a customer? What do you like? Dislike?
No matter what your message is and who it's directed at, certain facts must be included, namely the who, what, how, when, and
where. A good rule of thumb on any printed information regarding your business is to always include information on how clients
can reach you: business name, names of relevant people and departments, address, telephone numbers, fax number, business hours,
or Internet address. This information can be included on anything from advertisements to business cards to receipts to company
stationery. If you are restricted by space, include only the most important information; usually this is the name of the business and
its phone number.
Keep in mind that the content should be interesting as well as factual; after all, you are trying to convince someone to try your
business. Can you provide a good hook? Have you won any awards? Is your business new to the area? Do you offer state-of-the-art
equipment? The best prices in town or your money back?
Enticements to try your company's product or service also make good hooks if you can afford to offer them. Perhaps you want to
offer a two-shirts-for-one deal to clients who visit your dry-cleaning store for the first time with flyer in hand. Or maybe you want
to get customers to try your pizza by offering a free slice to anyone who brings your flyer to the store at a certain time on a certain
day (preferably during your slower hours). If you don't feel comfortable writing your own copy, then you may want to ask a friend
who's a good writer to do the job for you. Or if your budget permits, hire a professional. If you write your own message, always ask
someone else to look over what you've written for any spelling mistakes, typos, or factual errors.
You can use the worksheet provided here to sort out your ideas on content, regardless of who finally writes your copy.
Figuring Your Production Costs
You know what you want your flyer to do and say. Now you want to produce a flyer that will do the job in the best way possible, fit
your budget, and get distributed in a timely fashion. The following pointers will help you figure out your expenses.
Copy and Graphics
If you don't feel comfortable writing copy and don't know anyone who will write or edit your message for free, you may want to
hire a professional writer or editor. Does your flyer need to be spruced up with an image? If your company logo or trademark
doesn't do the job, you may want to enlist the services of a graphic artist. Ask for references, work samples, and do some
comparison shopping. Costs for these types of creative services can vary. If time permits, collect samples of flyers that you like
from other businesses to show as examples of what you want for your own flyer.
Paper and Printing
These costs can vary widely, depending on the type of paper you use and the type of printing method you use. Do you want color,
card, or glossy stock? Recycled paper? Do-it-yourself photocopying is one of the cheapest ways to reproduce a single-page flyer,
but will the results convey the right image? More expensive options include offset printing or engraving by a professional print
shop. Call around and comparison shop before you commit to anything. Remember to ask for bulk rates; often, the cost of both
paper and printing goes down substantially after the first hundred sheets. If your flyer needs to be folded, cut to a particular size, or
stuffed into an envelope, count on additional expenses.
Distribution Costs
If you plan on mailing these flyers, keep in mind the added cost of envelopes and first-class postage. One way to cut costs is to turn
the flyer into its own mailer. Fold a sheet of paper in half, or create flyers that are postcard-sized. Another cost to consider is
whether you're buying someone else's mailing list or using your own. Keep in mind that over 20 percent of the population has
recently moved, which means that any mailing list you use will need updating—and that will cost.
If you plan to hand out your flyers at a trade show or walk them door-to-door, will you need to hire someone to help you? If you
want customers to help themselves from a self-serve stand, take into account the cost of the stand and make sure it shows off your
flyer to its best advantage. You don't want key parts of your message hidden from view.
Establishing Your Production Time Frames
yourself, you must organize the process so that your flyer gets distributed in a timely fashion.
Begin by establishing a deadline. This deadline will be the day you want your customer to have your flyer in hand. Work backward
from that deadline. How much time do you need for distribution? Take into account mail delivery time, during the regular season as
well as during peak holidays. How long will it take to prepare the flyer for distribution? (Take into account envelope stuffing time.)
How long will it take to print the flyer and to order the paper you want? How much time do you need to write the copy and to
design the flyer's layout? Have you built in a safety cushion? If you discover a mistake on your flyers, will you have enough time to
correct and reprint them?
And finally, plan ahead and don't rush. Proofread and double-check all the details.
Tracking Your Responses
Keep in mind that, in a direct mail campaign, a 3 to 5 percent response is considered good. Keep track of the response rate to your
flyers. Strong results may mean that flyers may be an effective marketing tool for you. Weak results can mean that your flyer isn't
providing the necessary information or that you haven't distributed your flyer properly. If you're a gardener and you distribute your
flyer in the winter, chances are you're not going to have much of a response rate.
© Microsoft, 1998.
VII CREATING BROCHURES
CREATING BROCHURES
If you need to offer in-depth information about your business, product, or service to an interested prospect, brochures offer an
effective means of conveying all the necessary details. In fact, comprehensive explanation of any kind is best done through a
brochure. A brochure may provide a general overview of your entire business, or it may focus on one particular product. If your
business changes seasonally, a brochure can offer a calendar-overview of the different services you provide. Because of their
detailed content, brochures are generally given to customers who have already expressed an interest in the subject of the brochure.
Even if you plan on meeting with your customer to go over everything in person, a brochure can both prepare and, later, remind
your customer of all the points that came up during conversation. A car dealer, for example, could hand out a brochure that explains
the differences between different makes and models. A banker might want to create a brochure that outlines the various checking
and savings accounts that customers can choose from.
Brochures can be produced and distributed in various ways, suitable for every budget. You can distribute them in any way that
makes sense for your overall marketing objective: Mail them as part of a direct mail campaign, include them with product
deliveries, hand them out at trade shows, place them in help-yourself racks, or deliver them door-to-door.
Marketing Objectives
To determine whether a brochure is the right medium for you, begin by identifying your objective. What kind of information do
you want this brochure to cover? Do you want to describe your different product lines to new customers? Do you want to tell your
existing clients about an upgrade in your services? What type of action do you want the reader to take when she gets your brochure?
Knowing your objectives will help you determine what the actual text of your message will be, whether you write the brochure
yourself or hire a professional to do it.
Your objectives will also help decide which portion of your target market should receive your brochure. For example, a brochure
that introduces your business to prospective future clients wouldn't be appropriate for established clients who have already proven
their interest in your services. Depending on your objectives, you may need more than one brochure.
Crafting Your Message

Once you know your objective, the next step is to work on the brochure's content. What kind of impression do you want to make?
Casual? Sophisticated? Value-oriented? How much information are you going to provide? Use your own experience as a consumer.
Which brochures have you found most informative? What works on you as a customer? What do you like or dislike?
Keep in mind that the content should be interesting as well as informative. Although your brochure can consist entirely of text, you
should try to use visual graphics. If you must use text only, try to vary the font types and size so that the reader is offered visual
relief.
When deciding on your visual content, begin with your company logo or trademark and work from there. Images should add an
additional level of explanation, one that can't be done through words alone. Craftspeople whose specialty is handcrafted furniture
should include pictures of their work in their brochure. A dog groomer might want to include pictures of freshly washed and
clipped pets. These images will say more about these businesses than words alone ever could. But remember, if you include images,
make sure they are of high professional quality. Bad pictures that are out of focus or poorly reproduced won't interest anyone in
your product.
If you don't feel comfortable writing your own brochure, then you may want to ask a friend who's a good writer to do the job for
you. Or, if your budget permits, hire a professional. If you write your own copy, always ask someone else to look over what you've
written for any spelling mistakes, typos, or factual errors.
The worksheet provided here will be useful in sorting out your thoughts on content, regardless of who does the writing.
Form
The following guidelines offer suggestions on how content should be arranged in a standard brochure created from an 8½-by-11
sheet of paper (letter-size) that has been folded into thirds. Six panels result: The facing panel or right flap, which opens from the
right; the left flap, which opens from the left and reveals the three inner panels, inner left, inner middle, and inner right. The back
panel is typically seen last; this panel can also function as the address and stamp page if the brochure will be used as a mailer.
Other single-page options include using legal-size stock (8½ by 14) that has been folded in half twice, resulting in eight panels
total. Booklet brochures are made from pages of any size that have been folded or glued into book form; in booklets, the front cover
becomes the equivalent of a facing panel (right flap).
Content
Whether you decide to use 8½-by-11 or 8½-by-14 paper, each panel (or page, or flap) has a specific job to do with respect to
content.
Facing Panel (Right Flap, Front Cover)

This panel, or page, should immediately indicate the subject matter of the brochure with an explanatory heading. The name of your
business, along with the company logo or trademark, should be prominent in this space. If you are providing a general overview of
your entire business, then your business name and logo can also act as the explanatory heading. Also include any pertinent
information regarding contact persons, phone numbers, and so forth. Remember basic information like this can be repeated on other
panels. Saying something once doesn't mean you can't say it again; in marketing, repetition can positively reinforce your message.
If you are planning a series of brochures, each on different aspects of your business, make sure that all the facing panels for each
edition look similar, even if the explanatory headings are different. Put your business logo and trademark at the top or bottom of
every brochure to maintain consistency.
For example, Anderson Homeworks, a general contractor that specializes in kitchens and bathrooms, swimming pools and hot tubs,
and porches and decks, may want to create brochures that provide detailed information about each of these service areas. For the
brochure on kitchens and bathrooms, the explanatory heading might be "Anderson Homeworks Can Build Your Dream Kitchen and
Bathroom."
Left Flap
There are two ways to use this panel: It can stand, self-contained, on its own, or its content can flow into the back panel. Although
this is technically the second page that is seen, most readers will immediately turn to the left inner panel to start reading. The left
flap is a good place to put information that will enable your prospects to act: business address, store hours, telephone number,
prices, or a brief overview of your services. Another option is to use this flap to entice the reader to get to the inner panels, where
the bulk of your detailed information should be located.
Inner Panels (Pages)
The meat and potatoes of your brochure will start on the left inner panel. You can organize the information in any way: Each panel
can have its own subject and stand self-contained, or panels can flow into each other. Or, the entire page can be used. Using an
earlier example, if Anderson Homeworks wanted to create a brochure that offered an overview of its contracting specialties, it
might choose to dedicate the inner left panel to bathrooms and kitchens, the inner middle to swimming pools and hot tubs, and the
inner right to porches and decks. Perhaps the contact information for Anderson Homeworks consultants could be placed on the left
flap, and the back panel could be used to display additional images of Anderson Homeworks projects.
Alternatively, all three inner panels could be used to display a chart that neatly organizes every type of service or product that
Anderson Homeworks offers. Another way to use this space is to print a calendar or price list, or to provide the answers to all the
commonly asked questions that a customer of Anderson Homeworks typically asks.
Back Panel
This panel can be used to continue information from the left flap, or it can stand on its own. If you plan on using your brochure as a
mailer, use this panel as the stamp and address page. Regardless of how you use the back panel, always reiterate your company
name and basic contact information somewhere in this space, whether at the top or at the bottom. If you use this panel for
addresses, put your company name and address in the return address area.
Production Costs
You know what you want your brochure to do and say. Now you want to produce one that will do the job in the best way possible,
at an affordable cost, and that will get distributed in a timely fashion. The following list will help you figure out your expenses.
Copy and Graphics
If you don't feel comfortable writing copy and don't know anyone who will write or edit your content for free, you may want to hire
a professional writer or editor. Does your brochure need to be spruced up with an image? If your company logo or trademark
doesn't do the job, you may want to enlist the services of a graphic artist. Ask for references, work samples, and comparison shop.
Costs for these types of creative services can vary. If time permits, collect brochures that you like from other businesses, to show as
examples of what you want for your own brochure. The decision to reproduce on colored paper or to use full color printing will add
a major expense, but also consider that studies have shown that color increases retention by 57 percent. And customers are 41
percent more likely to purchase your products or services if color is used.
Paper and Printing
Paper and printing costs can vary widely, depending on the type of paper you use and the type of printing method you use. Do you
want color, card, or glossy stock? Recycled paper? Do-it-yourself photocopying is one of the cheapest ways to reproduce a single-
page brochure, but will the results convey the right image? More expensive options include offset printing or engraving by a
professional print shop. Call around and do some comparison shopping before you commit to anything. Remember to ask for bulk
rates; often, the cost of both paper and printing goes down substantially after the first hundred sheets. If your brochure needs to be
machine folded, stapled, glued, cut to a particular size, or stuffed into an envelope, count on additional expenses.
Distribution Costs
If you plan on mailing these brochures, keep in mind the added cost of envelopes and first-class postage. Don't forget to weigh both
the brochure and its envelope. Nonprofit enterprises may be eligible for special rates. One way to cut costs is to turn the brochure
into its own mailer. Reserve one panel on your single-sheet brochure for the mailing address and stamp. Another cost to consider is
whether you're buying someone else's mailing list or using your own. Keep in mind that over 20 percent of the population has
recently moved, which means that any mailing list you use will need updating.
If you plan to hand out your brochures at a trade show or walk them door-to-door, will you need to hire someone to help you? If
you want customers to help themselves from a self-serve stand, take into account the cost of the stand and make sure it shows off
your brochure to its best advantage.
Production Time Frame
yourself, you must organize the process so that your brochure gets distributed in a timely fashion.
Begin by establishing a deadline. This deadline will be the day you want your customer to have your brochure in hand. Work
backward from that deadline. How much time do you need for distribution? Take into account mail delivery time, during the
regular season and during peak holidays. How long will it take to prep the brochure for distribution? Take into account envelope
stuffing time. How long will it take to print the brochure and to order the paper you want? How much time do you need to write the
copy and design the brochure? Another consideration: Have you built in a safety cushion? If you discover a mistake on your
brochure, will you have enough time to correct and reprint it?
Many businesses use the same brochure year after year. This is a thrifty and useful practice as long as the brochure stays current. If
prices are included, make sure you list the most current ones. If photos are used, make sure they don't look dated after a few print
runs. Always keep the information up to date. Nothing undermines credibility more than printed information that is wrong. Plan
ahead and don't rush; proofread and double-check all the details.
Tracking Your Response Rates
In a direct mail campaign, a 3 to 5 percent response is considered good. So be sure to keep track of the response rate to your
brochures. Strong results may mean that a brochure is an effective marketing tool for you. Weak results can mean that your
brochure isn't providing the necessary information or that you haven't distributed it properly. If you're a gardener and you distribute
your brochure in the winter, chances are you're not going to have much of a response rate.
© Microsoft, 1998.

VIII CREATING RADIO ADS
CREATING RADIO ADS
Radio can be one of the most targeted and cost-effective ways to advertise your company, but only if you're ready to invest the time
into crafting your message and pinpointing the most receptive audience. Arm yourself with as much audience information as you
can gather. With objective evaluation, you can afford to be highly selective in targeting your prospects.
Why is radio such a good medium for a small business? First, it's likely that your current customers, not to mention your potential
customers, listen to radio every day. They listen at home, at work, in their cars during their commute, or on the way to shop. Radio
research claims that an average American listens to radio more than three hours each weekday. Adults spend more time with radio
during daytime hours, 6 A.M. to 6 P.M., than with any other media.
The second reason radio makes small-business sense is its cost efficiency; you can deliver a message with the frequency you need
to make that message stick. And since the ear works much faster than the eye, your audience can process your message with less
time than reading would demand.
Format Is Key
When planning your radio message, identify the right audience for your message and then make sure they hear it more than once.
The hot button in radio today is format; the magic formula is strategic repetition.
n formats are broadly categorized as either foreground or background. Foreground stations require more active listening, and,
the theory goes, listeners are more apt to pay attention during commercials here. Foreground formats include the following: ·
News
Talk
Sports
Religious
round stations are ones that a person can have on while doing other things. These tend to cover a wide array of music genres,
including the following: · Country-western
Contemporary hits (top 40, popular)
Alternative
Jazz
Classical
Adult-contemporary
Classic rock
Album-oriented rock (AOR)
Easy listening
Nostalgia
Religious music
You can anticipate listening trends even without audience demographics at your fingertips. While a popular-music station will tend
to skew young and female, an all-talk station often is dominated by an older male audience. When deciding on the station format
for your ad, leave your personal choices at the door and look for the market that best fits your product. Keep in mind that the top-
rated station may not deliver the right audience for your product or service.
Buying Time
Marketers tend to think of radio as one of the most immediate mediums because the buying response can be measured soon after a
spot airs. And quick production turnaround means that limited period offers, sale announcements, product innovations, and
responses to competitors' claims can be incorporated into your radio spots.
Use your knowledge of the area to identify the types of stations you think are good matches. Then call the sales reps and ask for
station profiles, ratings (Nielsen and Arbitron Indexes), and demographics. Compare categories such as Average Quarter-Hour
Share (AQH Share) and Average Time Spent Listening (TSL). See Understanding Radio Audience Research for a primer in what
each of these ratings terms means and how to calculate them yourself. You can easily do this yourself and bypass an ad agency or
media buyer.
he following tactics in mind when planning your radio campaign: · Sensitivity to time of day
Different ad copy for different targets
Timing of radio spots for commute time and in-car audiences
Running spots at the same time each day
Radio offers great flexibility. Lengths typically range from 10 to 60 seconds (usually 10, 20, 30, and 60), selling for as little as $5 in
off-peak times. A 30-second spot will cost more than 50 percent of the 60-second version, but that doesn't mean you should rule out
shorter spots. In fact, buy as many spots as you can, because repetition is key in radio. Repeated airings help your message get
through the clutter. Listeners will absorb part of your message, even if they are doing other activities, each time they hear it.
Producing Your Spot

Many stations have complete in-house production capabilities. This is usually a cost-effective way for you to go, and it can
eliminate a lot of headaches. The station may also offer to write the spot for you. But be cautious: In many cases, the sales rep will,
by default, write the spots. Ask for a copywriter or hire your own.
on's in-house production service has some definite advantages, such as the following: You can use in-house talent or on-
air personalities for no charge.
You have access to the station's full library of sound effects.
You have access to all the discs in their music library.
You won't have to worry about paying fees to ASCAP and music services.
You won't need to pay AFTRA rates for talent.
Another inexpensive introduction to radio can be underwriting on public radio stations. This can be an ideal venue for professional
services, restaurants, and retailers. No production costs will be involved; you'll simply supply a 10-second message for the
program's host to read.
Media Mixing
Radio advertising's largest drawback is its lack of visual impact. However, the flexibility and intimacy of radio make it a good
complement to all other media. For a small-business owner, it makes the most sense to combine your radio buy with transit and
billboards (to capture the in-car audience) and newspapers (for better geographic targeting).
Understanding Radio Audience Research
wing are terms and formulas commonly used by radio audience marketing researchers: Average Quarter-Hour Audience
(AQH Persons). The average number of people listening to a particular station for at least 5 minutes in a 15-minute period
within a specific day part.
Average Quarter-Hour Rating (AQH Rating). The AQH people expressed as a percentage of the population being measured.
The formula for this is (AQH Persons ÷ Population) × 100 = AQH Rating (%)
Average Quarter-Hour Share (AQH Share). The AQH persons expressed as a percentage of total radio: (AQH Persons to a
Station ÷ AQH Persons to All Stations) × 100 = AQH Share (%)
Average Time Spent Listening (TSL). The amount of time the average person listens to a radio station in the course of the
average day or week: Quarter-Hours in Time Period × (AQH Persons ÷ Cume Persons) = TSL
Cume Persons. The total number of different people who listen to a station for at least five minutes in a day part. (Note:
Some may call this Unduplicated Audience.)
Cume Rating. The cume persons expressed as a percentage of the population being measured: (Cume Persons ÷ Population)
× 100 = Cume Rating (%)
Persons Using Radio (PUR). The total of all listeners in a market, both commercial and noncommercial.
© Microsoft, 1998.

IX CREATING TV ADS
CREATING TV ADS
No matter what you might believe about television, most other people find it believable. In fact, TV remains the most credible and
trusted medium for the majority of Americans. And the same figures that usually seem so alarming—that an average home has the
TV turned on more than seven hours a day—are numbers that can work in your favor for advertising your business.
Television takes you right into your customers' homes when they're relaxed and receptive. Its combination of visual and auditory
messages is more memorable and easily recalled than any other medium. Your presence on TV also carries a certain cachet for you
and your product by the simple fact that you can afford to be there.
sion advertising is an effective marketing tool because of its following characteristics: · Emotional
Visual
Credible
Exciting
Prestigious
fore the prestige of television sways you, you need to make sure it's a worthy investment for you. Consider television if the
following conditions are true: Your product needs to be demonstrated to be believed or understood.
Your company needs the prestige of a television presence.
Your competitors advertise on television.
Your competitors are nowhere near ready for TV (giving you an edge).
You have a lot of money in your advertising budget.
Making TV Happen
You can produce a television commercial for as little as $800. You can also spend $50,000—and a lot more. Excellent commercials
can be produced for under $1500. Keeping post-production costs down is an area where you can save the most money and time.
Post-production (graphics, special effects) in metropolitan areas will cost you more than $300 an hour.
It is possible to complete a television commercial in ten days. Try to allow two to four weeks, however, so you have time for goal-
setting, conceptual work, and the actual production. Develop a targeted and concise creative brief before assembling your team or
beginning any creative work. Being organized up front will save you time and money down the line. Of course, good organization
and a solid plan are crucial for any media, but the repercussions of poor planning hit much harder with the high cost of television
production.
ocal television station will probably offer to produce your commercial. Weigh the advantages and disadvantages carefully.
Using station production facilities offers the following advantages: It's less expensive.
It makes it easier to assemble a creative-production team.
The price includes the station's in-house talent. (You don't need to pay AFTRA or SAG scale, as long as the commercial
stays on that station.)
also want to be aware of the following disadvantages of using station production services: The station's creative-
production team won't have a vested interest in your company.
The station's talent (or voice) may be too easily recognized or overused in your market.
You usually won't get the best creative service. (There are exceptions, of course.)
There's a tendency toward formulaic writing and production techniques.
You'll have to pay extra fees if you plan to air the commercial on other stations.
If you tape a commercial at one station and plan to eventually air it elsewhere, be sure to ask for a copy of the spot without the
narration track. Have someone at another station—or an independent person—voice it. Or pay the extra talent fees and fulfill all
contract obligations with the producing station so that the spot is yours to air where you choose. Don't forget to include this in your
original budget planning.
Assembling an Independent Team
Unfortunately, advertising agencies are not set up to give small-business owners the necessary attention. Fortunately, many creative
people have left agency life in the past several years and are now working as independent contractors. What many small businesses
are doing is assembling their own virtual agencies. One small company, which advertises on all media in its region, has put together
a team with a creative leader or copywriter from each discipline (television, radio, outdoor, print). The team meets quarterly to
discuss creative strategy, branding, and cohesive messaging. As an alternative to this model, you may want to contract with an
independent creative director who can assemble the necessary talent for you.
Even if you opt for in-house production at your local station, it's still a good idea to consider hiring your own writer and producer.
This could be the cheapest part of the equation and will be well worth your money.
Buying Time and Saving Money
Buying television time is perhaps the trickiest and most elusive of all media buying. You'll be bombarded with GRP (Gross Rating
Points), HUT (Households Using Television), and program information. Prices vary widely. To complicate it even more, television
reps are notorious for wheeling and dealing. This is one medium where it is definitely worth it to have an independent media buyer
assisting you.
llowing guidelines will help you save money when buying television time: Avoid prime time (8 PM-11 PM in most
markets; 7 PM-10 PM, Central and Mountain time zones).
Consider fringe time (immediately before and after prime time), which can also tie you into the local news audience.
Consider late night. (Not as many people watch, but the price can be right and it can be a good way to enter into television.)
Consider cable.
Production Tactics
Target your message as concisely as possible. A 30-second commercial can usually accomplish only three things at the most, and
that means you'll need to get your name, your product, and your message into a succinct package.
llowing are some techniques that are commonly used: · Demonstration
Testimonial
Humor
Problem and solution
Straight pitch
Special effects
Attention grabbers
You can do low-budget versions of some successful trends, such as using a documentary-style testimonial (to create a feeling
similar to the intimate, informative nature of a PBS documentary) or creating visual interest by using black-and-white.
e money during production, you can take the following steps: Spend time up front to develop a clear creative brief.
Clearly outline the goal of the commercial.
Have a clear call to action.
Use voice-over narration rather than actors.
Shoot at one location, either on location or in a studio.
Keep special effects to a minimum; it's hard to do them well on a budget.
And here's one of the greatest money-saving, revenue-producing tactics available: Try to get your product placed on a home-
shopping network. Now more than ever, home-shopping channels are turning to small entrepreneurs to find quality products to
feature. A spot on a network like QVC could easily triple your annual sales.
TV Ratings
wing are some of the most common terms used by TV marketing researchers: Rating. The rating refers to the percentage
of television homes that watched that program. One rating point is equal to 1 percent of TA (Total Audience)
Television audience. Can be defined by household or persons basis. Most commonly, you'll hear the household, or homes
rating, which indicates the percentage of television households watching the program.
AA (Average Audience) rating. The AA rating is the percentage of U.S. television households that were tuned to a specific
program during the average minute of the telecast. The AA rating is the statistic quoted most often, and many people think of
this simply as the "rating." This rating is more applicable to commercial ratings, since the commercial doesn't run throughout
the entire program.
TA (Total Audience) Rating. The TA rating is the percentage of U.S. television households that watched any part of the
program in excess of five minutes.
HUT (Households Using Television).
Share. Calculated by the ratio of the AA rating to the HUT level to get the share of audience: AA ÷ HUT = Share (Share of
audience measures a program's strength compared with other programs).
Gross Rating Points (GRP). The sum of the ratings for a series of programs is referred to as a GRP level.
CPM (Cost per Thousand). Cost varies by ratings, of course.
Points. Cost per point is sometimes substituted for CPM: Unit cost ÷ AA rating = Cost per point.
NTI (Nielsen Television Index). National ratings are determined by the A.C. Nielsen Company, the largest market research
company in the United States.
© Microsoft, 1998.
X CREATING A WEB SITE AND WEB ADS
CREATING A WEB SITE AND WEB ADS
For marketers, the Internet combines the strengths of print and television advertising—text and graphics plus sound and moving
pictures—while eliminating the time and space limitations of traditional media. Unlike magazines and TV, the Internet is
interactive, making it a cost-effective, one-to-one marketing tool.
Companies use Web sites to establish their presence on the Internet. Web sites consist of text, images, sound, video, and animation
organized into sections called Web pages. Companies also promote themselves online through Web advertising, publicity,
newsgroups, and e-mail newsletters.
Web site, your company can:· Increase product awareness
Communicate with customers and partners
Sell product direct
Generate and qualify leads
Improve customer service
Gather feedback
Decrease sales, support, marketing, and training costs
Expand distribution
e marketing offers many benefits, including: Extensive customer reach. The Internet is global, reaching millions of
people of every age, nationality, and profession.
Attractive user demographic. Most Internet users are highly educated with above average incomes.
Interaction. Forms, e-mail, and surveys let users interact with Web sites, helping companies build customer databases and
user profiles and also helping them to customize offers.
Flexibility. Unlike printed materials, it's easy to change information online. Product updates don't result in obsolete
collateral, and marketers can test messages, prices, and more online.
Automation. Automating sales, marketing, or support processes can save money and time.
Evaluating Your Online Potential
ting online delivers results for many businesses, but not all. To decide if your company will benefit from Internet marketing,
answer the following questions: Are your customers online? If not, invest elsewhere.
Are your competitors online? If so, has the Internet helped their businesses?
Does your product lend itself to direct sales? If not, use the Internet for marketing rather than selling.
Do you have the distribution and/or resources to handle Internet customers?
Does your company sell to regional or national customers? If your business is strictly local, will Internet marketing help
meet business goals?
Don't develop a Web site without reasonable, business-oriented goals. Like any other marketing campaign, online marketing
success comes from measurable objectives, strong content, and comprehensive marketing plans.
Online Marketing Objectives
e your company develops a Web site, define specific objectives by answering: What are your marketing goals?
Who is the target customer? (Business professionals? Computer novices?)
How does the Internet fit into your company's plans? Are you expanding into new regions? Selling new products?
How will the Internet change business? Be prepared for new ways of working; be ready to adapt. For example, many car
dealerships believe the Internet shortens the buying cycle because customers now research choices online, visiting
dealerships only when ready to negotiate price.
What's your budget? Some companies develop Web sites for as little as $5000, with costs averaging between $10,000 to
$20,000 for small businesses. Fortunately, many online marketing activities cost little or nothing.
Design and Deployment
Objectives in hand, look for a Web site designer and an Internet Service Provider (ISP). The ISP will host the site. Start with the
designer because many of the design choices you make will impact hosting services.
Ask colleagues for referrals or look in the phone directory for designers and ISPs. You can also check the bottom of Web pages you
like for the designer's name. Some designers offer Web hosting, but a dedicated ISP generally offers better prices, support, and
Internet connections. Always check references carefully.
Naming Your Web Site
When choosing a domain or site name (e.g., companyname.com), look for something intuitive and easy to spell. For instance,
Disney can be found at www.disney.com, and Barnes and Noble is simply www.barnesandnoble.com. Keeping your name simple
makes it easier for customers and partners to find you and remember your web address. Unfortunately, many names are already
taken, but you can always combine two or more words.
Ask your ISP to register your domain name with the Network Information Center (InterNIC), the organization that manages domain
registration. InterNIC charges $50 per year for registering a domain name, with a two-year minimum ($100). Most ISPs charge
minimal fees for coordination. Make sure the domain name is registered under your name, not the ISP's.
Creating Content
Next, plan and gather information for your Web site. The right content will boost effectiveness by establishing credibility,
providing useful information, encouraging repeat visits, and building business.
are three types of material you can use:· Existing collateral copied to the Web
Information created specifically for the Web
Materials integrating online and print campaigns (for example, details provided online to support TV or print ads)
defining content, consider the following: Navigation. Make it easy for viewers to move around your site through hyperlinks
and buttons.
Download times. Graphics and media files take longer for viewers to download than text. Be careful to not overload your site
with time-consuming features that are unnecessary.
Media technologies. Sound, video, and animation can be added for greater impact.
Forms. Gather visitor information by asking people to register or fill out surveys.
Maintenance. Develop a schedule for keeping information up-to-date.

Marketing Your Web site
Just as you actively promote an event or a contest, you must market your Web site to attract visitors. Without proactive marketing,
people won't know where to find your Web site or why to visit.
Directories and Search Engines
Directories such as Yahoo and search engines such as Alta Vista and Lycos list Web sites. You must supply your information to
Web directories, while search engines automatically scan Web sites and then categorize them.
Links/Online Referrals
Ask other Web sites to link to yours. Most sites feature lists of other Web sites of interest. Set up reciprocal links so both companies
benefit. Or consider using a paid referral system. For example, the online bookstore Amazon.com pays referral fees to sites who
refer visitors to them for book purchases.
Publicity
When you launch your Web site, issue a press release. You can send the release by regular or electronic mail, depending on editors'
preferences. Don't forget to include online publications in your distribution list. Awards also help generate publicity.
Online Ads
Banner ads are the graphical messages you see on commercial sites. There's very little room for information on banner ads, so
companies use them to encourage viewers to "click through" to their Web sites. To do this, viewers position their mouse over a
banner ad and click on it. The ad is linked to the advertiser's Web site. There, the viewer finds detailed company or product
information. A banner ad works much like a television ad that encourages viewers to call for a free brochure—only online, the
desired response is for the viewer to visit the company's Web site. Costs for banner ads are based on impressions (i.e., the number
of times your ad is viewed). Consider joining a service that will find sites where your banner ad can be posted for free in exchange
for posting other companies' ads on your site.
Online Events
Use special, online-specific events such as celebrity chats, real-time audio broadcasts, or online sweepstakes to attract visitors.
Print Promotion
Don't forget to include your Web site address on stationery, brochures, business cards, print ads, etc.
Online Newsgroups and Newsletters
Online newsgroups and newsletters attract targeted audiences. However, there are many etiquette rules regarding newsgroups, so
take the time to learn them. Also, consider sending a biweekly or monthly e-mail newsletter to interested customers to keep them
informed. But always remember to ask for the customer's permission to send e-mail. Like other forms of direct advertising, it's
important that your tactics not be seen as overly aggressive or intrusive.
Dos and Don'ts
There are four cardinal rules when advertising on the Internet:1. Don't spam. Spamming is sending unsolicited e-mail, the
online equivalent of junk mail. Internet users get very angry with junk e-mail.
Experiment. The Internet is constantly evolving. Spend time visiting other companies' Web sites to learn about new
marketing techniques and keep trying new ideas on your site.
Respond quickly. Reply to visitors' e-mail within 24 hours. People online expect immediate results.
Measure results. Take advantage of Internet technology to monitor your success. Measure the number of visitors, what they
view, how they respond, how changes impact response, and so on.
© Microsoft, 1998.

XI CREATING OUTDOOR ADS
CREATING OUTDOOR ADS
If you want to get attention, sometimes it pays to go big, really big. When it comes to the bang-for-the-buck factor, outdoor and
transit advertising can be a cost-effective addition to your media mix. Falling under the category of out-of-home advertising,
outdoor advertising provides a colorful, highly visual medium that lets you attract consumer attention without spending a fortune.
In fact, transit advertising has a track record of delivering audience at the lowest cost-per-thousand of any medium.
But outdoor advertising can rarely carry a message or accomplish branding on its own. It's better to think of outdoor advertising as
a way to build name awareness and recognition for your company as a complement to your print or broadcast campaigns. With a
strong message, good graphics, and proper placement, your targeted audience will see and retain some part of your message.
wing are some of the advertising options that may be available in your area: · Billboards (can be illuminated and backlit
in some instances)
Bus signs (exterior and interior)
Fully wrapped buses (painting an entire bus with your theme)
Bus shelters
Taxis
Airport signage
Shuttle services (buses and vans to airports)
Stadium signs (inside or outside ballparks)
Kiosks
Poster walls
Aerial banners and skywriting
Your knowledge of your region can be the best barometer of whether to pursue outdoor advertising. Are billboards graphic
and well produced in your area? If yes, are they well received by residents? What types of companies use billboards or
transit? If there are strict zoning regulations in your area, can transit deliver your message into targeted neighborhoods? The
following general benefits of outdoor advertising apply to almost any region: · Provides cost-effective reach
Engenders an immediate awareness of your product
Takes little effort on the consumer's part to view your message
Is the only visual medium available to commuters on interstate freeways and highways
Billboard or Transit?
It's been said that the two most effective words to use in billboard advertising are Next Exit. Indeed, if your business is near a
highway or thoroughfare, billboard advertising can literally lead shoppers to your door. Keep in mind that the same people will see
a billboard on a commuter highway day after day. On the other hand, one in a more remote location may be seen only once by a
traveler.
Strict zoning laws in residential, suburban and upscale areas often severely limit billboard usage. If your targeted demographic
leads you to a particular zip code or residential neighborhood, transit may be your only option for advertising. It can also be a great
way to reach an urban population during peak commute times as well as during the daytime, when television numbers decrease.
Transit reaches people when they're out of the house and ready to respond; it goes where people are working, shopping, and
playing; you can even position your product's message close to where a shopper can actually buy the product.
Both transit and billboard advertising provide ideal marketing venues for a message about a new restaurant or shop, a store
expansion or remodel, a new product, or timesaving services. Take a lesson in hype from movie promoters, who use billboards and
bus boards to announce a film opening for two weeks before the big media blitz takes place. Outdoor advertising may cost only a
fraction of what they spend on broadcast and print advertising, yet it's an integral part of the opening promotion. How does this
apply to you? Consider staggering and overlapping media buys. Combine radio with outdoor advertising to add a crucial visual
component to your overall marketing campaign.
Research and Media Buying
You can bypass media buyers and deal directly with outdoor media reps. Outdoor advertising is fairly straightforward, and you'll be
able to research prices, showings (see the outdoor media checklist below), and options quite effectively on your own. Look in the
yellow pages or on the Internet under Advertising-Outdoor and Advertising-Transit & Transportation. In transit, you'll find that one
company handles sales and production for a metropolitan, county, or regional transit system.
Location is clearly the most important consideration in buying a billboard. Rarely will you be able to buy (actually, rent) just one
billboard. You'll pay a premium for certain billboard locations, but you may be able to buy a package (10 to 20) that includes a few
prime locations. If you're going to wheel and deal in billboard buying, put your effort into getting the best locations. Ask the rep for
advice on ways to increase your reach within your budget. Could you share a billboard with another company? What about co-op
advertising from your vendors?
Location on the outside of a bus is an important consideration as well. The driver-side signs measure larger (there are no passenger
doors) and have a slightly higher visibility rate because motorists traditionally pass on the left. However, the difference between
driver- and passenger-side visibility is narrowing each year as buses are often on multilane highways where cars can pass them on
each side, not to mention the many times buses in high-occupancy vehicle lanes speed past single-occupant cars in congested traffic
lanes.
The small sign in the back of the bus is a good option if your message needs longer viewing time. These back-of-bus signs
(sometimes called taillight signs) are viewed by cars immediately behind the buses in traffic. You can take advantage of bad traffic
situations by working your message into people's minds a little deeper. You can, of course, take your message over the whole bus.
These fully-wrapped buses have been successfully used by sports teams, retail shops, and many other merchants since the 1990s. If
they're not seen frequently in your area yet, this could be an excellent way to make your message stand out.
Design and Production
Outdoor advertising is a visual medium. You definitely will want an experienced graphics designer working with you. Keep your
concept straightforward and your message simple. Short, tight, and direct copy will work best; drivers speeding by at 60 mph may
not have time to fully appreciate nuances in copy or your witty references to an obscure poet. Avoid formulaic recommendations
such as "outdoor copy must have fewer than six words," but also be sure to keep the copy sparse and strong. Keep details to a
minimum; for instance, if you need an address, put Fifth and Clover, downtown or Right on Exit 167, rather than a specific address.
Don't bother with a phone number, unless it's a number easy to remember and free to cellular users.
Keep in mind the general printing formula of two times the line screen count equals resolution (150 line screen × 2 = 300 dpi). But
as always, there are variables. You can exchange resolution for dimension, you can select an output method for a larger size that
helps disguise pixels, or you can output at film resolution before having the work reproduced in its final form.
When you submit your art or disk to a printer or service for processing, be sure to include a list of all fonts used and original EPS
files, along with a preapproved color comp for matching purposes. Go over all specifications and production details with your sales
rep and design team to make sure you deliver the cleanest, sharpest work you can.
When done well, outdoor advertising is hard to ignore. A simple message, strong design, and strategic placement can all work
together to strengthen your overall marketing objectives.
Outdoor Media Checklist
If you're considering outdoor advertising, particularly transit or billboard, talk with an outdoor media rep about the following terms:
Showing. With transit, this means the percentage of total routes you are buying. So if you buy a #25 Showing in ABC
County, your message will be seen on one-quarter of all buses in that county during the campaign.
Length of showing. Usual increments are in four-week installments. You can buy as little as two weeks at a time, but you'll
pay 70 percent (sometimes more) of the four-week rate.
Posting date. The day your ads start running on buses or appearing on billboards.
Traffic count. Exactly what it sounds like—the number of vehicles that pass a certain billboard location each day.
Reach. The percentage of individuals, within a select market area, exposed to your message (computed for a four-week
showing for transit).
Frequency. The average number of times an individual will be exposed to your message (calculated during a four-week
showing for transit).
Unduplicated exposures. The number of different individuals exposed to your message during a four-week showing.
Gross impressions. The total number of all exposures accumulated during a four-week period. Figure this by multiplying
unduplicated exposures by frequency. You can use the Gross Impression number to compare cost-per-thousand with other
media.
Share-of-mind advertising. This is the type of advertising you get with outdoor media. It simply means that you may win
sales down the road by planting your name or identity in front of consumers. Leave them with a memorable impression, and
you could get a better response from newspaper and other types of advertising.
© Microsoft, 1998.

XII SPECIALTY AND COMMUNITY-BASED ADVERTISING
SPECIALTY AND COMMUNITY-BASED ADVERTISING
In addition to traditional advertising and promotions, small businesses employ a range of marketing vehicles that fall under the
general heading of specialty and community-based advertising. These include everything from giveaways and coupons to
sweepstakes and sponsorships.
specialty and community-based advertising builds awareness of your company, connects you with customers, and ultimately
increases sales. Although these techniques cost significantly less than traditional advertising, marketing through
sponsorships and sampling is less direct and harder to measure. Try specialty and community-based advertising when you
want to accomplish the following: · Launch a new service
Promote specific products
Show community support
Find new customers
Encourage repeat business
Examples of companies using these marketing techniques include the following: · The travel agency that gives
customers a calendar featuring exciting vacation spots, monthly travel tips, and of course, its 800 number for reservations
A small café offering a free cup of coffee to everyone who purchases a commuter mug emblazoned with its logo
The pizzeria that sponsors youth soccer tournaments and provides free pizzas to the winning team
The new bagel store distributing free bagels and two-for-one coupons at the local charity ten-kilometer run
In each of these cases, the companies use specialty and community-based advertising. Each provides existing or potential customers
something of value, such as an attractive calendar, free coffee, soccer tournaments, and free bagels. Through these activities, the
companies promote their services, values, benefits, and products. Notice that several have combined different activities, such as
sampling and coupons, to make a greater impression.
Ad Specialties
You'll find dozens of ad specialty products, also known as giveaways, in your house or office: refrigerator magnets from the
cleaning service, a mouse pad with the computer manufacturer's logo, a baseball cap from a company golf tournament.
Ad specialties are small, fairly inexpensive items bearing the giver's logo and company name. Companies use them to create
goodwill, increase brand awareness, and keep their names in front of customers. Consider offering giveaways as thank-you
gestures, leave-behinds, or event souvenirs. Some companies even sell ad specialty products. Many restaurants and bars, for
example, sell T-shirts and glasses featuring their logos.
If you decide to use ad specialties, you should first define your objectives and budget and then decide how to distribute the
giveaways. At the store? Through the mail? At trade shows? You'll also need to determine the quantities needed. Next, call or visit
an ad specialties supplier. (You'll find companies listed under Ad Specialties, Novelties, and T-shirts in the phone directory.) You'll
find that ad specialty suppliers today offer an enormous range of product choices and price points. Don't be shy about asking your
vendor for advice about creative ways to meet your objectives.
Evaluate order volumes versus costs. You get price breaks on larger orders, so it's helpful to order as many units as you need. Look
for items you can use over a long period of time or for different marketing activities.
Samples
Samples take giveaways to the next level. Instead of giving away free pens, let customers try your product or service. Sampling is
especially effective when launching a new business or for differentiating yourself from the competition. It works for inexpensive
and expensive products alike.
Once you identify sampling objectives, consider packaging and distribution. There are many options: You can create small
packages, provide trial services, hand out single food servings, or give a free class. However you package your sample, be sure to
include whatever purchase information the customer needs, such as additional features and benefits, pricing, retail locations, and so
forth.
Next, decide how to distribute the samples. Depending on your product, you could send samples by mail, bundle them with the
newspaper, hand them out in the store, offer them at events, and so on. Quality is even more important with samples than with
giveaways. For example, if your bakery prides itself on freshness, do not give away day-old muffins at a community event.
Premiums
Another form of giveaways, premiums offer customers something free with a purchase. Premiums are an effective way to boost
sales on specific products. For example, you might offer a free pair of socks with the purchase of new hiking boots or free film with
a specific camera model.
With premiums, the goal is to increase sales without lowering prices or significantly increasing your cost of goods. Choose a
premium that offers value to customers. As with ad specialties, there are thousands of choices. Also, you can get added mileage out
of premiums by including your company logo on the item.
Coupons
Used by companies of every size, coupons help attract new business and maintain existing customers. With coupons, you can offer
discounts, free samples, two-for-one deals, premiums, special pricing, and upgraded services. Coupons have the added benefit of
being inexpensive to create and easy to track. Plus they're easy to distribute. Include coupons with ads, direct mail campaigns, and
flyers. Or hand them out at events, in the store, or directly to customers.
You might want to try a variation on coupons that encourages repeat business. Offer something in return for multiple purchases. For
example, an ice cream parlor could distribute "Buy 9, get the 10th cone free" cards. Design the card with nine boxes that employees
stamp or initial with each purchase.
You can use the worksheet provided here to plan and budget for coupons.
Sweepstakes
Sweepstakes build retail traffic and add names to mailing lists. Consider organizing one for a new store opening or product launch.
Customers will happily supply telephone numbers and addresses on entry forms in hopes of winning a drawing for free
merchandise or services.
For more information on how to organize sweepstakes and follow government regulations, refer to the following Web site:
http://www.pmalink.org. The Promotion Marketing Association (PMA) publishes a checklist on constructing and executing
sweepstakes. Free registration provides access to this and other how-to articles. Refer to the PMA for information on promotions
law, sports marketing, coupons, and more.
Community Events
Getting involved with the community benefits everyone: your company, employees, customers, and the community at large. Ways
to get involved include attending fairs and festivals, supporting nonprofit organizations, making donations, and so forth.
Community activities are popular marketing vehicles for companies who want to align themselves with customer values and
differentiate themselves from competitors.
When marketing through the community, choose one or two areas of interest, preferably related to your business. A restaurant
might donate food to homeless shelters or elderly people. Or a mountaineering store might raise funds for environmental groups.
Whatever you support, be sincere.
Community events often provide sampling and coupon opportunities. Summer festivals, for example, are great places to sell food,
give free five-minute massages, and show off new products. Ask your local chamber of commerce for an event calendar and poll
customers about favorite events.
Sponsorship
When you sponsor something, your company helps fund an event, a series of activities, or even a person. This involvement
associates your company name with something or someone of importance to your customers. While big companies such as Sprint
and Coca-Cola spend millions of dollars to sponsor the National Football League or the Olympics, sponsorship is also effective for
smaller businesses that support fundraisers, local sporting events, athletes, and museum exhibits.
Sponsorship helps differentiate your company and shows customers that you share their interests. You can use the worksheet
provided here to decide which opportunities are right for your company.
Conclusion
Both specialty and community-based advertising provide creative, inexpensive ways to get your name in front of customers.
Remember, though, that these activities work best as part of a complete marketing program. Think of ways to combine coupons,
community events, sampling, and ad specialties with advertising, public relations, trade shows, and direct mail.
© Microsoft, 1998.

XIII CONDUCTING TELEMARKETING CAMPAIGNS
CONDUCTING TELEMARKETING CAMPAIGNS
You don't have to be AT&T or the local newspaper to integrate telemarketing into your marketing program. All you need is a
phone, a plan, a script, and a lot of tenacity.
In its broadest definition, telemarketing means using the telephone to promote your business or sell products. Whether you manage
a large-scale call effort or you simply call your top 25 accounts, telemarketing offers a cost-effective way to make direct, personal
contact with prospective and existing customers.
Telemarketing generally takes two forms: inbound and outbound. Inbound telemarketing occurs when customers call you to place
an order or request information. Outbound telemarketing means you call the customer directly.
Like other direct marketing or sales techniques, telemarketing is targeted and measurable. You call only those consumers you want
to reach, and you can see results instantly. It's also controllable and provides instant feedback, meaning you can test responses to
different scripts, prices, or offers during a single telemarketing campaign. Telemarketing is more cost-effective than direct mail or
in-person sales. Plus you can reach more people by phone than you can in person.
When to Use Telemarketing
Although most telemarketing focuses on business-to-business sales, many companies use telemarketing to reach general consumers.
Telemarketing campaigns fall into two general categories: sales support and broader marketing programs.
If your business involves direct sales, telemarketing can streamline the sales process and keep costs down. For example, use
telemarketing to
Qualify leads before meeting in person. Ask prospects about requirements, budgets, timing, and decision-makers.
Divide your customers into A and B accounts. Let field sales handle customers with the most potential while telemarketing
focuses on smaller, less lucrative prospects.
Sell maintenance services or products by phone so field sales focuses on new accounts.
Telemarketing also allows you to
Take inbound calls in response to ads and direct-mail pieces.
Sell add-on products while customers are on the phone (the "Do you need socks to match your sweater?" approach).
Boost direct-mail response rates by calling top prospects.
Survey existing or past customers.
Remind customers to schedule annual services.

The Planning Process
The first step to successful telemarketing is planning. Define the campaign's objective. Do you want to sell a new service or
schedule a presentation? Follow up on trade show leads or remind customers to renew service contracts? Once you know the
objective, you can set up specific goals such as "Call 100 prospects per week" or "Set up ten meetings for next month." Besides
helping the planning process, the objective and goals help you measure success later.
Include information about your target customer in the plan. Are you calling current customers? Or do you need a list of prospects?
Knowing your target also helps you write your script.
Next, outline the offer in your plan. Define what specifically you plan to sell or offer, including benefits, costs, and promotions.
Make the offer actionable. In other words, define what you want the customer to do after the call, whether it's buy your product,
schedule a meeting, or review follow-up materials.
Finally, decide whether you want to manage the campaign yourself or outsource it to a telemarketing company. These companies
have telemarketing agents on staff, and they will prepare scripts and reports for you. Using a telemarketing firm boosts response
rates, but it will also increase costs. Unless you have thousands of prospects to call, using a telemarketing agency probably isn't
cost-effective for smaller campaigns.
Preparing to Make Calls
Whether you do it yourself or contract with a telemarketing agency, the steps that follow are the same.
1. Put together your contact list. If you're calling existing customers, tag them in your database. If you're targeting new
customers, purchase lists from brokers, organizations, publications, or other companies.
Draft a script. The script guides your call and ensures consistency. There are several different script formats. Some people
follow simple outlines. However, most telemarketers recommend developing a complete script that you follow verbatim.
Prepare a list of anticipated questions and objections. This sales tool helps reps respond quickly and steer the conversation
back to the script.
Set up reports. As with direct mail, one of the greatest benefits of telemarketing is the ability to measure the campaign's
effectiveness. Plan for measurement before you begin, measure as you go, and follow up with further analysis.
Make follow-up or delivery plans. There's no point spending money or time to launch a campaign if you don't follow
through. You risk losing momentum as well as angering customers. Develop processes for submitting orders or passing leads
onto field sales.
Develop a compensation model. Telemarketing is a grueling job, requiring excellent customer service, verbal
communication, and selling skills. Reward your telemarketing reps with commissions, bonuses, and contests.
Making Calls
When you're ready to begin, keep the following pointers in mind:
Don't call on holidays, during events such as the Superbowl, or on weekends before 10 AM. In general, don't call before 8
AM or after 9 PM.
Don't disguise sales calls as research or surveys. Customers don't like to be deceived.
Don't tape calls without consent of or notice to all parties.
Don't read the script in a monotone voice.
Don't speak without a script.
Anticipate screeners. Plan for ways to bypass receptionists and secretaries.
Invest in headsets. They decrease back strain, free hands for typing and generally improve the telemarketing experience.
Keep a list of people who ask you not to call again. While the FTC requires interstate telemarketers to respect customer
requests, it's a good practice for all telemarketers. Plus it cuts down on your costs and time.
Set up an 800 number if you're expecting calls from outside your local calling area. Research shows that 800 numbers
significantly improve response rates.
Monitor telemarketing reps' calls. Recording calls (with notice) helps train reps and refines the telemarketing process.
Costs
Telemarketing costs depend on the campaign's scale. If you're telemarketing in-house, your costs include setting up an 800 number
(for inbound calls), local and long distance phone charges, order processing, and compensation for telemarketing reps.
Telemarketing services charge by hour or by call.
Timing
Timing is important. Set up your telemarketing campaign so that it coincides with your other marketing programs. For example, if
you're boosting direct mail responses, you'll want to call one to two weeks after the mailing drops.
Telemarketing Reps
Training is critical. Make sure telemarketing reps have all your product or service information. Besides responses to common
objections or questions, arm reps with product literature, sample ads, or mailers and newspaper articles. Plus, train them on
customer service and telemarketing skills.
Motivation is vital. Consumer resistance to telemarketing is growing. Faced with constant rejection, telemarketers burn out easily.
Keep spirits up with creative compensation, a pleasant work environment, and frequent breaks.
© Microsoft, 1998.

XIV PREPARING FOR AND ATTENDING TRADE SHOWS
PREPARING FOR AND ATTENDING TRADE SHOWS
Trade shows provide a relatively cost-effective forum for direct marketing and sales, and exposing your company to targeted
customers who are ready to buy.
People attend shows and fairs to find solutions to problems, select and purchase products, learn about industry developments, and
meet industry and technical experts. Take advantage of trade shows to demonstrate, sample, and sell products. For more
complicated products, you will shorten the buying cycle by exhibiting at a show. And trade shows are great places to meet and
recruit new distributors or vendors.
Trade shows are about business, not image. Exhibiting is expensive, and without proper planning and follow up, trade shows can be
a waste of money and time. Plan your show presence strategically: In order to succeed you should identify goals, coordinate
marketing activities, be creative, and always follow up.
Planning for a Trade Show
Most of the work involved in trade shows happens before you ever step foot on the show floor.
Setting Goals
Define general and specific goals for each show. Goals simplify every decision that follows. Common goals include:
making sales
launching a new product
gathering leads
meeting customers
meeting new distributors
Determine how to measure goals so you'll know if you were successful. How many units will you sell? How many leads will you
gather?
Choosing Shows
You probably know the major shows in your industry. To learn about other shows, refer to trade publications and show directories.
The library, the Internet, and the local chamber of commerce are good resources. You can even ask customers, suppliers, and
competitors which shows they attend.
Consider the following when choosing shows:
Show focus. How closely does the show's subject match your business?
Costs. What is your budget? Add costs for the booth, promotions, travel, and entertainment to booth space.
Location. Is the show in an area where you do business?
Schedule. What are your other commitments? Also, consider show dates in relation to your business. For example, will your
new product be ready to launch at the show?
Audience. How many people attend? What are the demographics? Determine how much overlap there is between the show
and your target market.
Show Reputation. Is this a well-known show? Or is it brand new? If it's new, check the show management's references.
Other Exhibitors. Which competitors are exhibiting?
Coordinating Booth Logistics
After you decide which shows to attend, select a space and sign the contract. The most important thing to remember with booth
logistics is to read show materials carefully so you meet all deadlines, take advantage of preshow discounts, and avoid any
miscommunication. Here are some things to keep in mind:
Booth Size. The average booth size is ten-by-ten feet. At major shows, you'll often see larger booths. You must decide how
big a space you need. Consider rental costs, your booth, your products, and how many people you expect at one time.
Booth Type. Options range from modest tabletop displays to custom booths. To choose, evaluate costs, sizes, product
requirements, portability, set up, and style. You can build new exhibits, rent from the show, or buy used booths. You'll find
information about exhibit builders in the phone directory and on the Internet.
Graphics. Highlight your company name, product information, key benefits and more with signs and pictures. Consult with
your exhibit builder, graphic designer, or printer about different production options.
Booth Services. Show management will provide order forms for carpets, electricity, rental equipment, telephones, furniture,
florists, cleaning, security, labor, and so on. Keep track of deadlines. You often get discounts for early orders.
Displays. Determine how to show your products. You want to consider the easiest ways for people to see or test the product,
where you want to close sales, how to display literature, and so on.
Planning Marketing Activities
Your marketing consists of two phases: before and during the show. Marketing before the show is essential for building interest in
your company. Be creative—you have many options for preshow promotions, including:
Direct Mail. Send preregistered attendees invitations to your booth.
Customer Meetings. Schedule breakfast or dinner with current customers to discuss new products.
Show Passes. Offer your best customers free passes to the show.
Advertising. Advertise your company and booth number in trade publications.
Public Relations. Send out a press release about your show presence.
Telemarketing. Instead of mailing attendees, call them.
Other Media. Promote the show on your Web site, fax covers, newsletters, even bills, with a statement such as "Visit us at
Comdex! Stop by booth #100 to see our newest product and receive a free gift!"
Promoting your company before the show will increase awareness, booth traffic, and ultimately leads or sales.
Next, plan your marketing activities for the show. These will include:
Collateral. Bring two types of literature: inexpensive flyers to give everyone and more expensive brochures for serious
prospects. Better still, leave the brochures behind and mail them after the show to qualified leads.
Promotional Giveaways. Choose items that relate to your business. Rather than distributing them freely, only offer gifts to
customers who watch demos or fill out lead cards.
Press Meetings. Leave press kits in the press room and schedule meetings with reporters attending the show.
Other. Companies use all kinds of gimmicks to grab visitors' attention, including beautiful models, celebrity spokespeople,
and contests. Whatever you do, be sure it fits your company image and doesn't detract from your show goals.
Gathering and Managing Leads
Don't leave leads to chance. Besides gathering simple contact information, you need a way to qualify leads for follow up. This
means getting information about the prospect's needs, budget, timing, and location.
The best way to gather leads is with custom lead cards. Business cards and badge readers don't gather enough information about the
prospect. Develop a lead card with input from sales and marketing to get useful data.
Next, create a follow up process. Most companies fail in this area, letting leads go cold without any response. Instead, pledge to
contact the customer within ten days of the show, if not sooner.
Before the show begins, arrange for sales, marketing, customer service, or a receptionist to mail all requested materials, schedule
meetings, and report on results. You want to keep your company name fresh in the customer's mind. Besides being good business,
good follow-up will help you determine whether to exhibit again next year and how to improve your efforts.
Trade Show Staffing
Just as you hire salespeople carefully, choose trade show staff wisely. You want enthusiastic, knowledgeable employees to
represent the company. Then submit staff names for show passes.
Because of their intensity, trade shows are draining on staff. Keep spirits up in the following types of ways:
Invest in Training. Trade shows are bad places to break in new employees. Make sure everyone knows the product, pricing,
sales process, and competitive benefits.
Create Briefing Packets. Give every staff member information about show goals, dates, locations, dress and conduct codes,
booth assignments, and so on.
Schedule Breaks. If possible, divide booth duty into two shifts. If not, ensure everyone gets lunch and rest breaks.
At the Show
Plan to arrive at the show early. Anything can happen, even to the best-made plans. Again, consult show materials for set up dates
and times.
Other show hints and tips:

Get plenty of sleep, food, and water.
Bring an extra pair of shoes.
Don't eat, drink, smoke, or read in your booth.
Don't overindulge at after-hours parties.
Don't spend too much time on any one visitor.
Resources
Check your library for books on managing trade shows. You will also find a wealth of free information on the Internet.
© Microsoft, 1998.

XV PERFORMING PUBLIC RELATIONS ACTIVITIES
PERFORMING PUBLIC RELATIONS ACTIVITIES
Public relations (PR) works to create a positive image of your company in the media. In the narrowest sense, PR generates editorial
coverage in newspapers and magazines and on radio and television. From a broader perspective, PR extends into investor,
community, and employee communications.
Although PR offers many advantages, some small businesses avoid PR activities. Perhaps they don't know how to work with the
press. Or they may be under the false impression that the media will find them. However, public relations follows standard steps
that any company can master.
Reasons to Use PR
arters, PR is much less expensive than advertising or direct mail, and it results in free editorial coverage. But besides cost
advantages, consider the following benefits: PR builds credibility. Most people believe that editorial coverage is
objective. They trust magazine articles more than marketing collateral or advertising.
PR helps shape public perception. It positions your company relative to others in your community or industry. If you write a
monthly column about pet care, for example, people will recognize you, and by extension your company, as an expert.
PR generates excitement. It enhances word-of-mouth recommendations and supports other marketing activities; plus good
PR motivates employees and aids recruiting.
PR provides feedback. By analyzing what the press says about you and your competitors, you gain insight on trends,
perceived positioning, areas of strength, and places for improvement.
You can leverage PR's benefits through news announcements, media relations, speaking engagements, and sponsorships. PR also
involves managing events, networking at association meetings, preparing for possible crises, finding people who influence
customer decisions, and writing case studies.
PR Plans
e you begin, start with a plan. The standard PR plan has six main sections: 1. Situation analysis
Objectives
Strategy
Tactics
Schedule
Budget
Target Media
As you create the plan, you need to identify which media you'll target. Since there are thousands to choose from, start with five or
ten. Ask customers what publications they read and which stations they watch. Also include industry publications on your list.
Next, research targeted publications. Read back issues to identify what types of stories they cover—profiles, news articles, how-tos,
case studies, and so on. Call the publication to ask for contact names and deadlines for submitting releases. Keep this information
along with the publication's fax number and mailing address in a database or file.
The Basic PR Tool: Press Releases
ost common way to communicate with the media is to issue a press release. Press releases provide the reporter with all the
basic information about your news announcement. Consider issuing releases for the following occasions: · New
products and new equipment
Personnel hires and promotions

New customers or contracts
New or remodeled facilities
Research results
Anniversaries and awards
Calendar listings
Event participation
While there are numerous reasons for issuing press releases, remember that editors receive hundreds, even thousands of them. Don't
waste their time; make sure you have a good, newsworthy reason for sending a release.
It helps to write releases in standard formats. Editors prefer journalistic writing. In other words, stick to the facts and avoid all
marketing hype. Keeping your language clear and concise, use the inverted triangle to organize your material. This means the most
important information goes first, followed by the second most important information, and so on.
you write a press release, include the following components: Release date. Write "For immediate release" or "Hold for
release."
Contact information. Include your spokesperson's name, company name, and telephone number.
Headline or subhead. Keep headlines simple. Look at headlines in your target media and copy their style.
Dateline. Include location and date.
Body. The lead paragraph answers the five Ws: who, what, when, where, and why. Keep the lead factual and concise. Many
people follow the lead with a quotation from the company president. The quotation is the only place in the release for
opinions. Additional paragraphs round out the release with more detail, again placing information in descending order of
importance. Finally, conclude the release with the boilerplate, a standard paragraph that describes your company. Use a
boilerplate on all releases to present your company consistently.
In addition to press releases, you'll want to develop PR materials such as the following:
Press kits. These folders contain press releases, collateral, and graphics.
Corporate backgrounders. These cover company history, key personnel, awards received, service or technology overviews,
and brief product information.
Executive biographies. Generally one to two paragraphs long, biographies highlight current responsibilities, previous
employment, professional associations or recognition, and education.
Photos and graphics. Publications want graphics to accompany articles. Provide employee mug shots, black-and-white
logos, product pictures, charts, and so on.
Video news releases (VNRs). Television stations often use video from VNRs to accompany a story. These are expensive to
make, so ask the station if they use VNRs and hire professionals for production.
Samples. Often trying your product helps reporters. If it's not too expensive, send a sample. Or offer to give the reporter a
demonstration.
Other marketing collateral. You can also provide literature such as fact sheets, brochures, case studies, and research reports
in press kits.
Working with the Press
After you issue a press release, be prepared to talk with the media. Ideally, you want to develop long-term relationships with people
at target publications. The reporter or editor benefits from a solid understanding of your company and you benefit from being a
resource.
If your announcement is complicated, develop a question-and-answer (Q&A) document. Think of every possible question the
reporter might ask, and then write a brief response for each question. Review for consistency. Then practice.
Resources
wing are some excellent resources to help you create and produce your PR materials: Public relations agencies. PR
agencies help develop strategies and implement PR activities. Since they specialize in working with the media, they can
boost your effectiveness. When interviewing agencies, check recommendations and be sure to ask who will work on your
account.
Freelancers. Freelancers produce great materials and cost less than agencies. However, check references. Ask about clients
in similar businesses.
Speaking coaches. If you anticipate giving lots of interviews, especially for television, ask a speaking coach for expert
advice on presentation. Most agencies have someone on staff to critique presentations. Or take a public speaking seminar.
Media listings. You'll find several reference books at the local library that list print and broadcast media. Look for Standard
Rate and Data, Bacon's Media Directories, or Editor and Publisher Yearbook.
Books. Check the library for books on public relations, public speaking, and business writing. Many include sample press
releases and materials.
© Microsoft, 1998.
TOPIC OUTLINE
DESIGNING EFFECTIVE MARKETING MATERIALS
FINDING ADVERTISERS
EVALUATING YOUR MARKETING AND ADVERTISING CAMPAIGN

I DESIGNING EFFECTIVE MARKETING MATERIALS
DESIGNING EFFECTIVE MARKETING MATERIALS
Whether you're developing a newspaper ad, creating a brochure, or designing posters for store windows, understanding the basic
components of good design and understanding the production process result in higher quality and more effective marketing
collateral.
”
A GOOD LOGO CONVEYS THE ESSENCE OF YOUR COMPANY IDENTITY IN A SIMPLE, MEMORABLE, AND DISTINCTIVE MANNER.
Besides conveying marketing messages, your collateral communicates with customers on other levels. Colors, typefaces, pictures,
paper, and more all contribute to your company identity and shape customer perception. In addition to design choices, the quality of
marketing materials also impacts perception. For example, spelling errors, flimsy paper, boring text, and bad printing reflect
negatively on your company.
Understanding print and production will also save money. Knowing the options between different printing processes and making
smart decisions throughout the design and production stages help keep costs down.
printed collateral pieces go through the same production process. In general, the steps include 1. Setting objectives
Choosing vendors and suppliers
Developing concepts
Designing and writing the piece
Producing the final design
Printing
Trimming or other post-printing activities
Delivery
Promoting Company Identity
Logos and tag lines, along with colors, typefaces and design elements, contribute to promoting your company identity. These
identity elements appear throughout your business, from business cards and stationery to signs, invoices, Web sites, newsletters,
and more.
Logo
The most basic element of corporate identity is your logo. A logo takes one of three forms: a graphic icon or symbol, the company
name presented in a specific font or design (known as a logotype), or a combination of the two.
Examples of well-known graphic logos include the Nike "swoosh," the Starbucks mermaid, and Mr. Clean. And examples of
companies using logotypes include Bloomingdales, IBM, and Coca-Cola.
A good logo conveys the essence of your company identity in a simple, memorable, and distinctive manner. Plan to use your logo
consistently, so be sure to design something that's flexible enough to use in a variety of manners, in small and large sizes, and in
color as well as black-and-white.
Tag Line
A tag line or slogan describes your company or market position in three to seven words. Usually placed next to the logo, your tag
line should be catchy and descriptive. And like your logo, your tag line should be used consistently. However, companies will
change tag lines more frequently than logos as a way to keep up-to-date while leveraging the existing company identity. Examples
of well-known tag lines include "Tougher than dirt" (Tide), "The ultimate driving machine" (BMW), and "It's everywhere you want
to be" (VISA).
Colors
When developing your logo, decide which colors best represent your company. Color evokes strong emotional responses. Colors
such as navy blue, gray, and maroon appear conservative and professional, for example. Other colors appear trendy, calming,
sophisticated, or exciting. Some companies "own" certain colors in our minds—for example, Tiffany's light blue, Tommy Hilfiger's
red, white, and blue, and Perrier's bottle-green.
Typefaces
The typefaces you use in marketing collateral contribute to your image more subtly. Choose typefaces for style, readability, and
impact. Select one or two typefaces for business cards, letterhead, and other identity pieces. (See Typography below for more
information.)
Design Elements
Another way a company can develop its identity is by using consistent design elements. Examples of consistent design include
using only line drawings in ads, including graphic bars or lines in collateral pieces, or printing all pieces on recycled paper. The
consistent use of these elements helps customers associate those pieces with specific companies.
Creating Standards
Because corporate identity is fundamental to the way your company presents itself, it's a good idea to develop standard
practices for using your logo, tag line, colors, and design elements. Consider specifying the following characteristics: ·
Logo placement
Logo sizes
Ink colors
Layouts
Formats
Elements of Successful Materials
Strong creative concepts, good writing, attention-grabbing illustrations, and effective design turn your collateral objectives into
reality. Whether you create your own collateral or work with a designer, decisions you make during the design and development
phase impact the look, effectiveness, and cost of your marketing materials.
Concept
Successful collateral begins with a strong concept, the creative idea that generates themes and images for the project. Good
concepts are focused, customer-oriented, and emotional.
You or your agency will develop concepts based on your objectives by thinking of themes or images related to your company or
product. Once you have a concept idea, try to describe it in one or two sentences. If it's not easy to describe, keep refining the idea.
Test different concepts with colleagues for feedback. Most importantly, make sure everyone involved in approving the piece buys
off on the final concept.
Copy
determining the concept, you can begin writing the text. Good writing follows the precept "Show, don't tell." In other words,
describe how your product works and the benefits of using your company as opposed to simply listing features and services.
Use concrete descriptive words, specific verbs, and interesting images. If you don't feel comfortable writing copy, hire a
freelancer. In general, look for copy that can be described as follows: · Concise
Active
Jargon-free
Well-organized
Benefit-oriented
As you review and edit copy, remember that different pieces use different writing styles. Print advertisements rarely feature
complete sentences. Direct mail uses a conversational tone. And brochures tend to be more formal.
Illustrations
Photographs, drawings, and charts add visual impact to your collateral materials by grabbing attention, clarifying abstract ideas, and
producing emotional responses. Illustrations come in a range of styles and prices. To choose, keep in mind the concept, objectives,
budget, and expected printing process. As you decide what kind of illustration format to use, consider the following guidelines:
Photographs can be realistic or artistic. Use them to show products, landscapes, people, and architecture. Color photos add
vibrancy; black-and-white pictures are always classic. Choose photographs over drawings when customers need to see your
products before purchasing.
Drawings and graphics illustrate abstract ideas. Available in every imaginable style, drawings can add brightness to less
expensive pieces thanks to two-color printing.
Charts demonstrate performance or other quantifiable competitive advantages. Charts can work well in either color or
black-and-white.
In most cases, plan to hire professional photographers or graphic designers. You can also purchase stock photographs or clip art;
these are existing images that you license from their owners or creators for use in printed or online materials. Choose clip art
carefully. Thousands of images are sold inexpensively on CD-ROM today. Unfortunately, many such packages feature common
and uninteresting images. Many companies sell stock photography or clip art over the Internet.
Typography
There are thousands of typefaces available, each with its own style and attributes. Some are ideal for headlines and others for text or
captions. You'll probably use two or three different typefaces in any given ad or brochure.
come in four main families, which can be characterized as follows: Serif type is easiest to read. Used in books,
newspapers, and magazines, serif fonts include Times New Roman and Garamond.
Sans serif type is great for headlines, online text, and casual looks. Sans serif fonts include Helvetica and Arial.
Script fonts are often used on invitations or to resemble handwriting for either a formal or an informal look. Be careful not to
overuse.
Display type is suitable for logos or headlines. In general, use display fonts sparingly.
By controlling the way type appears, through size, color, weight, alignment, kerning (the space between letters), leading (the space
between lines), and so forth, designers can develop distinctive, readable text for any project.
Color
Color increases the expense of printed materials, but it also adds to their overall look and effectiveness. For some pieces, such as
clothing catalogs or high-end brochures, color is necessary. It's not important for pieces that change frequently, such as price sheets
and flyers. How you use color depends on the printing process.
using color, keep in mind the following suggestions: Keep color schemes simple and in line with your company image.
Limit the number of accent colors to three.
Use color to highlight, separate, or link blocks of text.
Ask your print shop if it can photocopy spot colors using different color toners.
Use color copies or printers when you need only a small number of color pieces.
There are two main ways to produce printed color: using spot color and using process colors. Many people use both four-color and
spot color printing for a combination of bright photographs and crisp accent color.
Spot color uses premixed ink for printing. There are hundreds of colors available. The most well-known colors are PMS colors, part
of the Pantone Matching System. Companies often use spot color to print logo or company colors where consistency is important.
Spot color is less expensive than process color. When you use spot color along with black in a printed piece, it's known as two-
color printing. You can also use more than one spot color per piece.
Process color creates many different colors by printing overlapping dots of cyan, magenta, and yellow inks. When these inks are
combined in varying percentages, the viewer's eye perceives a range of shades similar to those in a photograph. Also known as
four-color printing, process color also uses black ink to add depth to the other three inks. Black is also used to print sharp details
and text. Use four-color printing when you need to print color photographs and artwork.
Paper
Work with your designer and printer to choose paper stock for your project. There are hundreds of paper types that can affect the
piece's appearance and cost. Considerations for choosing paper include durability, use, printing processes, and more. For example, a
catalog selling expensive clothing requires thicker paper and a coated finish for crisp color printing, whereas a direct mail piece,
which has a short life span, needs less expensive, uncoated paper.
Some of your paper choices include the following:
Coated paper. Thanks to its smooth surface, coated paper works great for printing color. Coated paper comes in a variety of
finishes, including matte and glossy. Use coated paper for brochures, datasheets, and catalogs.
Uncoated paper. Uncoated paper comes in a variety of textures and colors. It's less expensive than coated paper, and it
absorbs ink differently. Use it for stationery, folders, envelopes, and other projects.
Weight. A paper's weight refers to the thickness and opacity of the page. Standard photocopy paper is 20-pound weight.
Choose thicker paper for double-sided printing, greater durability, and for more expensive pieces.
Recycled paper. The number of recycled paper options is growing. Although it's more expensive than regular paper, you
might consider recycled paper, especially if your company espouses environmental values.
Format
You also need to determine the physical appearance of your piece. How many pages is it? Will it be folded? How will the piece be
used? Although there are many standard sizes, you can stand out by printing brochures or cards in unusual sizes. Some formatting
decisions will impact production costs; others are relatively inexpensive. Creating custom bookmarks for a bookstore simply
requires telling the printer where to trim or cut the piece for specific dimensions.
Formatting considerations should include the following: · Size
Single- or double-sided printing
Binding (staples, spirals, and so on)
Die cuts (cut shapes, business card holders, and so on)
© Microsoft, 1998.

II FINDING ADVERTISERS
FINDING ADVERTISERS
Just as you seek outside counsel from lawyers and accountants, you'll find a wealth of support from companies and individuals
offering marketing services for every business type and budget. Ad agencies, freelance writers, graphic designers, PR firms, and
other professionals will help you create successful marketing programs.
relationships with marketing vendors help foster creativity, keep costs down, and improve the quality of your marketing
materials. To develop good relationships, it's important for you, the client, to understand the following: · Differences
between agencies and freelancers
Who's involved in the creative process
How to find and select agencies
How agencies charge
Ways to manage and improve communications
Agencies vs. Freelancers
Depending on your budget, marketing experience, time, and needs, you must decide how to implement your marketing plans. You
can do the work yourself, hire an agency, or contract with freelancers. Most companies employ a combination of tactics: creating
some materials in-house, using agencies for broad programs, and finding freelancers for specific projects. Agencies and freelancers
both provide marketing services, but their costs, expertise levels, and working methods differ.
Agencies provide a range of marketing services. The most familiar type is the advertising agency, but you'll also find companies
that specialize in telemarketing, direct mail, public relations, ad specialties, graphic design, and so on. Although most agencies
focus on one or two marketing disciplines, some offer complete marketing communications, essentially acting as virtual marketing
departments.
No matter what kind of agency you hire, you'll receive start-to-finish services. The agency will review your strategy, develop ideas,
manage the production, and deliver final product. Agencies help you by managing the details and providing expert advice.
ain benefits of working with an agency include the following: Outside perspective. It's hard for most businesses to be
objective about products and marketing; company pride, passion, and even politics obstruct objective thinking. Agencies
increase your chances of success by looking at your plans and needs from a fresh point of view.
Marketing expertise. By using an agency, you tap into the staff's collective expertise in specific marketing disciplines.
Agencies help determine strategies, and they have solid experience in producing successful programs.
Complete services. Thanks to their staff size, agencies manage projects from start to finish. Many even manage related
projects, such as marketing collateral to support advertising promotions.
Relationships with suppliers and vendors. Agencies manage relationships with printers, recording studios, film and video
producers, and other professionals, eliminating the need for you to find your own suppliers.
agencies provide valuable services, there are some drawbacks, including the following: Cost. Because agencies employ
tens, even hundreds of people, they have high overhead, which translates into higher costs for you.
Lack of control. Once you hire an agency, you have little control over who works on your account; the agency will assign an
account executive and creative team to your company. (Often success rests in finding the right team, and good agencies will
work with you to find good personnel matches.)
Unlike agencies, freelancers usually work as independent contractors, often from home. Many have prior agency or corporate
experience. Because of their low overhead, freelancers generally cost less than agencies while delivering high quality work. On the
other hand, freelancers offer a narrower range of services, leaving you to hire several different freelancers or suppliers to complete
projects.
working with freelancers, you'll enjoy the following advantages: Lower costs. Freelancers generally charge on an hourly or
project basis. Compared to agencies, freelancers can complete projects more inexpensively.
Greater control. You can handpick specific people, such as writers, designers, printers, video producers, and so on, to work
on projects rather than relying on the agency's pool of talent.
ownsides to working with freelancers include the following: Less expertise. Although many freelancers have years of
experience, some have less in-depth knowledge or less breadth than agencies. Look for someone who has as much
experience as possible in your field.
More vendor management. Because freelancers provide specific services, you need to manage relationships with several
freelancers or vendors to complete projects, requiring more time and energy on your part.
More discipline. Without an agency's outside perspective, you need to exercise more discipline to ensure your marketing
remains on strategy.
Key People
marketing materials result from a collaborative process that involves many people. Knowing who does what will help you
facilitate the creative and production processes for more effective materials. Following are the key players in the materials
development process: Copywriter. Whether you're creating a brochure or developing a newspaper ad, the copywriter takes
an active role in the creative and development process. Usually, the copywriter helps develop the concept based on your
objectives. Then he or she writes the needed material. Most copywriters specialize in different types of writing. Those who
write great ads or headlines often avoid longer or less promotional pieces such as brochures or press releases.
Designer. The designer also participates in concept development. Then the designer translates the concept into visual
representations. Most graphic designers today work with computers, although some still work by hand. In any case, they use
typography, layout, and illustrations to bring concepts to life. Designers also specialize—some work on corporate identity,
some on ads, and still others create online materials.
Account executive. The account executive or account manager is your primary agency contact. This person communicates
your strategy and concepts to everyone working on your programs and oversees all the details of your account, from billing
to press checks.
Creative director. At advertising agencies and graphic design firms, the creative or art director develops concepts for
projects and creates your company's overall look. In big agencies, the creative director manages the creative staff. In smaller
agencies, the creative director produces the art as well as the ideas.
Media buyer. The media buyer or media director determines placement strategies for your ad, looking at timing, frequency,
budget, type of media, and specific magazines, newspapers, and broadcast stations. The media buyer looks for the audience
that best matches your target customer and then buys the space or time.
Besides the individuals listed above, many other people produce or impact your marketing materials, including video producers,
agency executives, and radio specialists. Ask each person you meet to explain his or her role in the process to learn more.
Selecting Agencies
Choosing the right agency is as important as hiring good employees. Most companies develop a formal or semiformal process for
finding and hiring marketing agencies. First determine what kind of services you want, which is your first level of selection criteria.
You will develop additional criteria later.
There's no shortage of marketing agencies. Create a top-level list of five to ten firms by asking colleagues for recommendations,
looking in the phone directory, and talking to the local American Marketing Association chapter. You can also find agencies in the
Standard Directory of Advertising Agencies, located in most library reference sections.
Ask each agency to send you information about its services and capabilities. After reviewing the materials, narrow down the list to
two or three finalists based on general costs, range of services, marketing expertise, and previous work.
Next, schedule a capabilities presentation with each finalist. A capabilities presentation takes an hour or two. Give the agencies
ample time to prepare and provide them any relevant information they need. Most agencies will ask about services needed,
estimated billings, product lines, competitors, and company background. Prepare a standard document with this information for all
finalists.
While the agencies prepare their presentations, create a list of criteria for selection. Start by imagining the perfect agency. Some
areas to consider include the following:
Location. Is the office nearby or in another city? Local offices cut travel and telephone costs.
Size. How many employees and clients does the agency have? What are clients' average billings? You want to find an agency
where you would be a big account. Bigger agencies tend to focus on larger accounts, assigning less experienced people to
smaller accounts.
Services. What services does the agency provide? Will you need additional agencies to meet your needs? Some agencies
provide public relations work, graphic design, and Web site development in addition to advertising.
Rates. How does the agency charge for its services? How flexible is the agency in developing rates suitable for your business
and needs?
Clients. Does the agency have clients that are about your size? Are any of its clients your competitors?
Philosophy. How does the agency work? Develop creative ideas? Handle problems?
Media. What media does the agency work with? Mostly print? Radio? Television?
People. How do you like the management team? Creative director? Who would work on your account?
Specialization. Does the agency specialize in specific industries? Media? Services?
Once you've met with all the finalists, compare results and let them know when to expect a decision. One meeting is probably not
enough to make the final decision. If necessary, talk to key agency personnel about additional issues. Then ask for references. Ask
clients about the agency's ability to meet deadlines, develop marketing programs, and deliver results. Also ask about
communications, working styles, and more.
After deciding which agency to choose, inform all the finalists of your choice. You and the agency will then draft a standard
contract to define the working relationship.
Agency Fees
e you select the agency, make sure you understand how the agency structures its fees. There are different compensation
methods and enough variations to suit every budget. Following are descriptions of typical compensation methods:
Commissions. National media traditionally offer agencies a 15 percent commission or discount. The client pays the
published media cost; the agency gives the publication or station 85 percent and pockets the remaining 15 percent. On big
accounts, the 15 percent commission covers the cost to create and develop advertisements.
Hourly minus commission. Most accounts don't advertise enough for commissions to cover the agency's costs. Agencies then
charge the client for the difference between its hourly costs and the commissions it receives.
Hourly. Agencies simply charge clients for the hourly costs associated with creating and developing ads in a manner similar
to other professional services. The client also pays for additional costs, usually at a negotiated markup rate.
Retainers. Some agencies, especially PR firms, negotiate retainer fees, which are the minimum fees the client pays for work
done over a specified time period. Any work outside the contract gets charged at hourly and markup rates.
Flat fees. Clients can also pay flat rates negotiated with the agency. Flat rates work best for discrete projects, such as design
work or writing.
Communication Tips
h any relationship, success depends on good communication with the agency or freelancers. Following are steps you can take
that will help keep communications strong: Define the scope of work. Make sure everyone involved in a project knows
its objectives, budget, schedule, and deadlines. Include task assignments and approvals needed. Update this information
when needed.
Share relevant information. It's easy for outside agencies to lose touch with internal changes. Tell the agency when you
make strategy decisions or personnel changes. Besides improving the agency's ability to communicate, sharing information
helps the agency feel involved.
Determine approval processes up front. Before you begin a project, decide who needs to approve the piece and when. Add
time for approvals in the schedule, remembering that the company president or lawyers can slow down the process.
Delineate responsibilities. When working with an agency, specify who does what. You may want your internal marketing
person to handle market research or you might ask the agency to develop strategies. Make sure everyone understands who is
responsible.
Hold review meetings. Schedule an agency review meeting three or four months after beginning work with the agency. Use
the meeting to answer questions, resolve any issues, and verify strategies. After the initial review meeting, schedule reviews
once or twice a year. This is the time to update the agency on company directions and make sure everything is on track.
Give specific feedback. When you review copy or artwork, provide the writer, designer, or account manager with specific
information about what you do and don't like. If you don't like colors, say so. If the wording is awkward, point it out.
Generalities such as "I just don't like it" don't help.
Build relationships with agency executives. In addition to developing a good working relationship with the account manager,
stay in touch with the agency executives. They can help solve personnel problems or provide additional opinions.
Publish reports. Distribute status reports after meetings or during projects. Ask the agency to provide reports on advertising
campaign results. Make sure everyone has up-to-date information.
Set realistic deadlines. Try to give the agency or freelancer as much time as possible. The quality of work and execution will
be much stronger with ample time for concept development and review.
Remember, the agency or freelancer is your marketing partner. If you work hard to keep the agency informed about your business
and market, you'll reap great rewards. Try to respect the agency's expertise, and learn as much as you can about its business.
© Microsoft, 1998.

III SELECTING AN AD AGENCY
Questions to ask when shopping for an advertising or public relations agency:
What process does your agency use in analyzing client needs?
A successful program includes as much or more planning as execution. You want to be sure that the agency has the "mental
horsepower" to see beyond the obvious and move your promotional programs beyond the limits of your own abilities.
Once you've determined my needs, what is the process used to position my company?
The agency has to be your partner in developing a creative strategy for your business. What processes do they use to develop your
communications goals? Why?
How do you measure the effectiveness of your strategies?
Results can be measured in attitude changes, exposure, awareness, sales increases, specific information requested—and other ways.
Make sure you are comfortable with their measurement plans, and that you understand why those are valid measurements. Be very
leery of "You can't measure the results, but…" excuses. If it can't be measured, you can't afford it.
How do you keep us informed about your activities?
You should get tear sheets, comprehensive and understandable billing, and full explanations of what is going on upon your request.
The smoke-and-mirrors approach is fine for movies, but not for your investment.
Who else have you worked with?
Find out if the agency has worked with other companies similar to yours. What success (and horror) stories do they have? Whom
may you contact?
Customers, both happy and unhappy, provide the least biased information about how well performance matched expectations.
Describe a successful program for a business like ours.
What were the goals of the program? What strategies and tactics did the agency use? How did they measure success?
You want to separate fact from selling. Ask for names and numbers.
What are your relationships with the media?
If the campaign is public relations (PR or unpaid advertising), what types of relationships does the firm have with the media? Is that
firm on a first-name basis with influential people in your field?
Nothing is as helpful as a friend in high places. PR firms work to establish these relationships, and are (usually) proud of them.
How do you approach creativity?
How is creativity measured? How does the agency involve clients in the creative process?
The aim is to find out if they value creativity as a tool (good) or as an end in itself (bad). This is a judgment call you have to make
—once again, smoke and mirrors are fine for entertainment, but not for your money.
What important clients have you lost in the past year?
Why did the agency lose them? Request that you speak with them.
An agency that badmouths a former client will eventually badmouth you. Every agency loses clients to their competition; good
agencies know why and aren't ashamed or antagonistic about it.
Who will be working on our account day-by-day?
This question is the most important of all. You want to have experienced talent working for you, not the newest hire. You can't
afford to train beginners. Make sure the agency's top talent is working for you.

IV EVALUATING YOUR MARKETING AND ADVERTISING CAMPAIGN
EVALUATING YOUR MARKETING AND ADVERTISING CAMPAIGN
Evaluating a marketing campaign is the only way to determine if you've spent your marketing budget wisely. It's a skilled
management decision; there isn't a simple mathematical equation that will instantly, effortlessly tell you whether your campaign
worked. Increased sales figures are a good indication, but not the only one.
”
IT CAN TAKE MONTHS FOR MOST CUSTOMERS TO PROGRESS FROM FIRST HEARING ABOUT YOUR PRODUCT TO DECIDING TO BUY IT.
When to Evaluate
Because a campaign requires patience, most marketing experts advise waiting at least six months, if not a year, before you take a
hard look at your advertising efforts. Allow for the customer's buying cycle. It can take months for most customers to progress from
first hearing about your product to buying it.
When you initially plan your campaign, include evaluation reminders so this important step won't get lost in the shuffle of day-to-
day business operations. Set aside some time without interruptions or meet with your staff for their input.
Collecting Information
Always ask every customer how he or she heard of your company, even if they're just calling on the phone with a question. Note
which media generates inquiries as well as which media generate sales. Train your staff to ask about it as naturally as asking, "How
can I help you?" On your order forms, right next to the customer's name, include "How did you hear of us?" and leave a space for
the customer or your staff to fill it out. Make sure there's an inquiry log near every telephone.
Some media, such as direct mail coupons, easily lend themselves to tracking. Each generation of coupons should have a code on it
so you know when and how the customer found it. Department numbers can help you record inquiries, too. For example, you might
advertise Department 11 in one magazine, Department 12 in another. When customers call requesting a specific department, you
know which magazine they've been reading. Even television and radio ads can be tracked. Simply run weekly specials in which the
customer must mention the ad to receive the discount.
Customer Surveys
Your customers can help you appraise a specific aspect of a marketing campaign. Some businesses are better suited to this than
others, but a short survey often provides useful information. You might be surprised by what your customers will tell you if you
simply ask them.
For example, let's say you own a car wash and you're wondering why your customers don't use your coupons. Are they not
seeing your coupons, or do they disregard coupons in general? Customers can fill out a survey as they wait for their cars to
be washed. Following are some suggestions for developing an effective survey: Offer a freebie or small discount to let your
customers know you value their time.
Keep it short—no more than four questions, or else more people will skip it.
Avoid slanting the questions to get the answers you want.
Ask for the customer's name and address, and add it to your company's mailing list. Think about keeping a special mailing
list of loyal customers.
Include a disclaimer that you don't lend or sell your customer's addresses. Some people dislike surveys because they suspect
they'll be deluged with direct mail. A disclaimer emphasizes that this is just between the customer and your company, giving
your survey a friendly tone.
Thank the customer and sign the survey. Courtesy always earns points, and your signature shows that a "real" person will be
paying attention to the customer's opinion.
Consider a Marketing Consultant
A marketing consultant's expertise may come in handy when you're evaluating a marketing campaign. An outside party can give
you a fresh, objective perspective, plus you gain from the consultant's experiences with different businesses and situations. Learn
from others' mistakes and successes.
A consultant can take the time to be thorough and skillfully test your ads' effectiveness, such as developing telephone surveys to
determine whether people saw your ads and what they thought. Yet it's up to you to decide how useful the results are and what you
will do about it. You know more about your particular industry.
Evaluation Factors
You can complete the evaluation worksheet provided here to weigh each of the following factors when you judge your
marketing campaign: Sales figures. Have your grosses gone up?
Marketing goals. Are you accomplishing what you wanted?
Advertisement content. Are the ads presenting the right information?
Media mix. Are you reaping the advantages of different media?
Creation process. Did you experience problems when you set the campaign into motion?
Using the Evaluation
After examining your campaign by the cold light of day, you may decide changes are in order. However, don't make too many
alterations too quickly. Increase your efforts, but don't rush to dump anything unless you're experiencing sharp consumer backlash
or criticism. Keep your central message consistent for at least a year.
There will be occasional sales slumps, and that's the worst time to drastically alter your campaign. Sudden shifts confuse customers
and undermine your company's credibility.
A Final Perspective
Businesses attract customers and close sales through a combination of influences, such as location, word of mouth, product quality,
pricing, return policy, and customer follow-up after an initial sale. None of these factors hinge upon whether the customer saw your
billboard. That billboard may still have been a good investment; a visible advertising presence contributes to overall sales by
reinforcing your company's image and keeping your name at the forefront of your customer's mind.
Now that you've conducted a marketing campaign, you may find yourself initiating goodwill policies for your loyal customers;
keeping old customers happy is much cheaper and easier than attracting new ones!
© Microsoft, 1998.

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CONTENTS

No product sells itself. Your

Products and Services

Advertising and Promotion

Your Marketing Campaign

Marketing and Advertising

Producing Marketing Materials

DEFINING YOUR BUSINESS

MARKETING SWOT ANALYSIS

FORMULATING STRATEGIC MARKETING GOALS

DEFINING YOUR MARKETING, SALES, AND PROFIT GOALS

THE IMPORTANCE OF A MARKETING BUDGET

THE STRENGTHS AND WEAKNESSES OF YOUR BUSINESS

SELECTING A MARKETING STRATEGY

The purpose of marketing is to create customers.

Product and service analysis

Analysis of your market and your position in that market

Analysis of the strengths and weaknesses of your business

The purpose of marketing is to create customers.

Product and service analysis

Analysis of your market and your position in that market

Analysis of the strengths and weaknesses of your business

MARKETING SWOT ANALYSIS

Sales and marketing

Government and Regulation. Regulatory factors are in constant flux.

Acting on Your SWOT Analysis

FORMULATING STRATEGIC MARKETING GOALS

Segmentation: What segments of the market do you want to attract?

Culture: What is the culture of your business?

Choosing Your Goals

The Target Marketing Process

For this reason, target marketing is an ongoing five-step process:

How big are the segments?

DEFINING YOUR MARKETING, SALES, AND PROFIT GOALS

Risks to Achieving These Goals

THE IMPORTANCE OF A MARKETING BUDGET

THE STRENGTHS AND WEAKNESSES OF YOUR BUSINESS

Your Business's Strengths

Which products and services are most important to your customers?

Which products and services are least important to your customers?

What aspects were the least successful?

What did your business do best this year?

What were your greatest triumphs?

What were your greatest disappointments or failures?

Your Business's Weaknesses

How can I take advantage of or build on this set of circumstances?

If one or more are beyond my control, how will it affect my business?

SELECTING A MARKETING STRATEGY

Selecting a marketing strategy is a four-step process:

Step One: Examine Past and Current Marketing Strategies

Strategies vs. Tactics

Interactive and systemic

Cultural: What is the culture of your business?

Stylistic: What is the style of your business?

Step Two: Summarize Personal and Business Objectives

Step Three: Reexamine Marketing Strategies

Step Four: Choose the Simplest Strategies

Your Final Strategic Choices

DEFINING YOUR BUSINESS

Picking an Initial Business Strategy

What Business Are You In?

Describing Your Business

Your Mission Statement

MARKETING SWOT ANALYSIS