International Bussiness Marketing

Summary

An attractive market is one which could be seen as growing, doesn’t have low cost corner cutting competitors and that you can profitably service. For smaller companies, this often means finding a niche or attacking the smaller end of a far larger market that the larger players can no longer service or have simply ignored.

Sometimes, just doing a great job in a stable, congested market can be enough. You only have to look at Virgin and their range of brands for an example of a large company doing it. For a smaller company this means, working smart, thinking about what the customer REALLY wants and being great at everything you do. I have worked with companies who have grown quickly because they have fallen over backwards to help their customers in tough competitive markets. One has become the market leader with this strategy.

Growing Market

Ideally you want to be in a market that is growing so that you can grow with it. If you are in a market that has a lot of smaller competitors and the market place is maturing then with the right funding partner this is an opportunity to consolidate the market by buying the competition and so take a larger share of the market.

As an entrepreneur it is your skill in spotting a gap between what is currently being supplied to a market and what the market now actually wants. Technology can often be used to drive down the cost of delivering a particular product or service.

This is especially true of those companies who are using digital marketing to communicate with their customers. Digital marketing has many benefits but the key ones are that; it is cheaper to deliver, encourages two-way communication with the customer and it is very to measure and so you can quickly identify what works and what doesn’t.

Be Different

In any market place, recognising what the customer REALLY wants is the key to high growth. Understanding what the customer is looking to achieve and why they buy a particular product or service will help you identify an approach that you can use to beat the competition. For older readers this used to be called the unique selling point. Now it is called differentiation.

You need to set yourself apart from the competition by working with the customer to deliver what they really want. Start with the customer in mind and work backwards to what you need to do in order to satisfy their requirements profitably.

No Low Cost Competition

Low cost competition where they disregard quality, safety and sometimes even the law can drive prices in a market place to unsustainably low levels. There is not a lot you can do when this happens but to sell on the quality of your own service where customers will pay for security and peace of mind is a sustainable response.

If a competitor or new entrant is offering lower prices then you do need to look at what they are doing and try to work out how they are managing to offer such prices. They may have found a way of delivering the same product or service profitability at a lower price. If this is the case then you will need to review your business to see how you can compete. The other option is to ensure that you offer something better in terms of service or quality.

Price Opacity

Prices are transparent in consumer markets. In most business markets pricing structures tend to be opaque. Low cost competition entering a market place will often try to make their pricing transparent with bundles or special offers. This can often be a challenge for existing players in a market as the pricing may be artificially low as the low cost competitor is looking to increase their volumes and then increase their prices once they have a share of the market. The danger for incumbents is not to follow the low cost competitors and bring down the profitability of the market place. Clearly, if margins have been higher than they should be then from the buyers point of view then this is a good thing. However, where margins are already tight then a further squeeze on profits could start to damage the market place or industry.

Maintaining price opacity for your pricing structure can be done in a number of ways including; volume discounts, retrospective discounts, quoting on a job by job basis, solution selling, individual pricing structures. Obviously this creates challenges in setting pricing but it does mean that you have the opportunity to get the best price you possibly can which helps to maintain your own margins. If your pricing is opaque then you can offer discounts to larger customers and to buy market share without alerting other customers to what you are doing. This is sometimes done on a marginal pricing basis but can be dangerous if you lose the customers that were paying for your overheads.

If you are new to business then you may feel that this is not ethical. However, in business to business selling where professional buyers are trying to get the best price possible then you need to keep your prices opaque as a professional buyer will use any information they have to get the best price from you.

Profitable Niche

Finding a niche which you can profitably sell your products and services with fewer competitors makes it easier to grow your business. But you already know that.

For a lot of people finding a profitable niche can seem impossible. However, it is possible even in the most competitive of markets. As an example, I needed to buy a new leather suite and thought about going to the large furniture discount stores. However, a friend mentioned that a leather suite manufacturer near to where I live used a better quality of leather. So we visited the store thinking that the furniture would be out of our price range. However, the pricing was on par with the discount stores as they didn’t have any sales people, expensive premises and they used time served craftsmen who also took it in turns to work in the shop. So on visiting the shop we ended up paying about the same as a larger retailer but actually got a suite to our specification made by time served craftsman. Their shop is close to a large retail park yet business is booming.

For a larger company example think about Easyjet and how they carved out a profitable niche in a very competitive industry. Obviously others have followed but Easyjet’s entrance into an existing market with a game changing business model created a profitable niche for a while at least.

So by thinking about your business model and the way you do things can you develop a game changing approach to the way you do things that will carve out a profitable niche in your current market?

I’m currently involved in a new online venture with a group of people from a variety of marketing and advertising backgrounds. The venture is a Canadian business directory that, in exchange for extremely inexpensive advertising, provides businesses with free web pages, a QR code generator, search engine optimization, and much more.

Naturally strategy meetings eventually focused on methods of traffic generation. It’s interesting that in a room full of people with backgrounds in radio, television, print advertising and web marketing, who seldom agreed on anything, all accepted social contests and giveaways as the promotional tool to go with.

For online promotion particularly, social contests and giveaways are incredibly effective at attracting attention. However, the problem is that a following generated through giveaways and contests is that those followers are less likely to interact once the incentives for doing so are no longer present. Of course there are exceptions, and social contests and giveaways can be highly effective when done correctly.

As with any marketing strategy initiated, social media contests must have a clearly defined goal to generate any return on investment (ROI). Most marketers believe they know their goal, “The goal is to raise follower numbers on social by X amount.” Unfortunately, this approach is wrong but few marketers know it.

It’s important to have a large a number of followers across a number of social channels, but that should never be the end goal of a contest or giveaway. Companies need to retain the followers gained from contests and giveaways, the very same followers who are unlikely to have any interest in the business being promoted beyond the opportunity to win a prize or receive a gift for participation.

The primary goal of conducting a social contest or engaging in a giveaway is always to earn money. However, contests and giveaways do not generate any direct revenues. Therefore, RIO needs to be measured in terms of new leads generated, participant sales conversion ratios, or an increase in potential consumers through membership registrations. Before launching a contest or giveaway, it’s necessary to determine what the goal is, and measure the results based on what is actually achieved.

An example of a contest with the goal of increasing brand awareness was one recently held by Bing. Bing launched a Jingle contest which required users to upload a video of their “Bing Jingle” for a chance to win a cash prize. The contest was promoted it across all of Bing’s social media outlets. The end result was increased viral engagement, substantial word of mouth advertising, and a great deal of chatter on major blogs, which drove organic content development.

A contest held to increase product awareness and sales was recently conducted by business software company Basecamp. Basecamp held a “Tell A Friend” contest, offering a discount to new users who signed up through their friends. The contest worked well because most business owners who use Basecamp are friends with other business owners who would also benefit from using the software. This gave new users a chance to acquire the software at a great price, and Basecamp to increase their customer base.

Giveaways offered through social networks have included everything from cosmetics through cars, but tend to mostly feature mobile electronics. Unlike contests, giveaways award prizes to all participants. One giveaway I though was particularly clever was conducted by a travel agency. All participants sending the company either a video, photo or written journal of their most recent vacation received a discount coupon redeemable against their next vacation. Receiving unique content for their travel based website and newsletter was a bonus, and combined with gaining a quality list of potential customers it far offset the cost of redeemed coupons.

So, the decision for the CanLookUp.com folks is only to decide between a contest or a giveaway, and what the prizes will be. The choice of using a social contest or giveaway over any other form of promotion was a go from the moment it was tabled. Generally, there are three types of prizes companies offer in contests. These are third-party prizes, a product from the business running the contest, or intangibles.

Of the three prize categories, third-party prizes are the most common. They are also most often the poorest choices. The mass appeal of an iPad for example, is reason enough for many people to participate in a contest, so it would likely be successful in generating interest. However, a great many of the contestants vying for the price would not be a market for the company’s goods or services, and therefore would not figure in any ROI the company hoped to earn from the contest.

Prizes that come from the business itself are often just as desirable as a third party product. Plus, using the company’s own product or service there is the added benefit of lower up front cost for prizes, and it generates brand awareness. Also, using a prize from the product line of the company running the contest, contestants are more likely to be from a demographic that represents potential customers.

The final prize category, intangible prizes, requires some creativity, but used successfully can produce a massive ROI. Intangible prizes generally cost little, if anything. A restaurant owner I consulted used social media to offer prizes to the winner of a contest to name the house wines. The prize for coming up with the winning name for each category of wine, white, red and rose was a dinner for two. Minimal cost, excellent participation in the contest, and buzz that would normally have cost thousands of dollars in advertising expense to duplicate.

So, the decision to go with contests and giveaways to promote a new web venture has been given a unanimous thumbs up, and now for the debate into what to award as gifts or prizes has to be resolved.

When you own a business, you want to stay within your budget as much as possible, especially if your business is new and you’re working hard to develop a base of repeat customers. Free business cards can be a real asset when you have a limited amount of money to work with, and they not only can be an asset to your business, but to the commercial printer who designs and prints the cards for your business. Commercial printers often provide a promotion that offers free cards, but some restrictions may apply.

When you order free business cards from a commercial printer, you can still get the personalized service that you’d expect if you were paying for your professionally designed cards. The printing company wants your business, but also wants you as a repeat customer. The printer will work with you to design unique cards that will attract the attention of your customers, with the information you need. The printing company will assist you with each step of designing your cards so that the finished product is exactly what you want.

When working with a commercial printer to design your free business cards, the stipulation is usually that the cards are available only for a limited time. Most often, the printing company stipulates that the cards may be printed only on one side. One of the conditions is usually that the design on the business cards is print ready artwork, which means that you choose from a variety of designs that the printing company has available. The finish will usually be a semi gloss finish, but may vary by company. The printing company usually will offer a set number of cards per order for each customer.

The free business cards you order from a printing company will usually be limited to 100 cards at a time. Most companies also state that you may order every few months. When you get your cards, you’re only charged for the shipping, which is a relatively small fee. Ordering cards this way is a good way to see the quality of the printing and decide if you want to use the commercial printer on a regular basis. It’s a good situation for both parties because if you’re happy with the cards that you initially order from the company, you’re more likely to order additional products from them, including catalogs, promotional items, flyers, brochures, and custom stickers.