"Half the money I spend on advertising is wasted;
the trouble is I don't know which half."
A great idea will only get you so far,
as many inventors have discovered over the years. Aside from writing a
business plan, developing a Marketing Strategy is the second most important step
a small business can take. A marketing strategy is more than just an
advertising budget - it defines how a company will compete in the marketplace,
and even defines who the company is to its customers / consumers / clients.
E. Jerome McCarthy proposed the
Four 'P's of marketing
(method of distribution or placement)
Each of these aspects must be addressed if a company
wishes to be successful long-term. However, other topics may need to be
considered as well:
The following is an example of a brief
customer segmentation analysis developed for an Irish pub. Notice
the estimated size of each segment - this will then correlate to the
percentage of the overall advertising budget that each segment receives.
By redirecting the existing advertising budget to target only specific customer
segments, the pub was able to increase revenues significantly without increasing
total advertising expenditures.
Office-Luncher (16% of total customers):
This segment consists of employees of nearby small and mid-sized
companies who may leave work for a quick lunch or have lunch delivered
to their places of business. Factors important to this group are speed
of service, quality of food, and selection.
Contact key personnel at these businesses and leave them with
information, including menu offerings. Focus on healthier entrees such
as selection of Irish salads and vegetarian options, as well as point
out convenient location and speed of service. Also provide a delivery
option to the company on orders over a certain size.
Luncher (2% of total customers):
This segment consists of non-working individuals, retirees, stay-at-home
parents, and visitors.
Luncher (2% of total customers):
This segment consists of blue collar workers, generally brought to
CLIENT by their
supervisor or foreman.
To reach this segment, target the supervisors and foremen. These
customers are likely in the dinner or weekend segments.
(30% of total customers):
This segment consists of individuals and couples between the ages of
25-45 who choose CLIENT
for both food and alcohol. This customer is looking for good food,
reasonable prices, and social atmosphere of a pub.
To reach this segment, consider direct mail (post cards, ValPak,
letters) to surrounding residents, focusing on the friendly Irish
atmosphere and small pub feel, as well as convenient location.
This segment often (30%) overlaps with the Weekday Diner, but is
primarily a Friday/Saturday night customer. This segment can be further
subdivided into two categories:
30% Weekend Band-Fan: This person comes to
CLIENT because of the
specific band playing on a given weekend. While this person is
initially loyal only to the band playing that evening, they can become
loyal customers of CLIENT,
as well, particularly with “no cover charge” policies and free or
discounted drinks for their next visit to
70% Weekend CLIENT
Fan: This person comes to
CLIENT because there is a band playing or open karaoke on a
To reach this segment, present a clear brand image with date-specific,
event-driven advertising in entertainment publications such as
LOCAL PRINT Magazine.
Create a weekly email newsletter highlighting specials for the next week
as well as upcoming performances and events.
advertising will achieve noticeable results. By targeting offices, lunch
traffic could easily be increased by 10%-20% or more. An email newsletter
will increase repeat weekend traffic, and direct mail to nearby residents
focusing on evening dining in an Irish pub environment will help boost
weekday dinner and drink sales. At the moment, advertising money is being
spent with little results. Simply redirecting the existing budget will
lead to measurable increases in traffic and sales.
startup company needed to know how to sell its new products in the marketplace.
After determining the target customer segments (which consisted of individuals
and institutions), different distribution channels would be used for each
segment, depending on the size of the end customer.
This illustration led to the development of a traveling sales force divided into
territories and representing each of the distribution methods:
- Distributors to small retailers
- Direct sales to large retailers
- Wholesalers to small companies
- Direct sales to large institutions