The heart of your business success lies in its marketing. Most aspects of your business depend on successful marketing. The overall marketing umbrella covers advertising, public relations, promotions and sales. Marketing is a process by which a product or service is introduced and promoted to potential customers. Without marketing, your business may offer the best products or services in your industry, but none of your potential customers would know about it. Without marketing, sales may crash and companies may have to close.
Secret Importance of Marketing for the Success of a small Business
Getting Word Out
For a business to succeed, the product or service it provides must be known to potential buyers. Unless your business is known in the community and have communication with your customers readily available, you have to use marketing strategies to create product or service awareness. Without marketing, your potential customers may never be aware of your business offerings and your business may not be given the opportunity to progress and succeed. Using marketing to promote your product, service and company provides your business with a chance of being discovered by prospective customers.
Once your product, service or company gets on the radar screen of your prospects, it increases your chances that consumers will make a purchase. As awareness becomes a reality, it is also the point where new customers start to spread the word, telling friends and family about this amazing new product they discovered. Your sales will steadily increase as the word spreads. Without employing marketing strategies, these sales may not have ever happened; without sales, a company cannot succeed.
The success of a company often rests on a solid reputation. Marketing builds brand name recognition or product recall with a company. When a company reaches the high expectations of the public, its reputation stands on firmer ground. As your reputation grows, the business expands and sales increase. The reputation of your company is built through active participation in community programs, effective communication–externally and externally–and quality products or services, which are created or supported by marketing efforts.
Marketing also fosters an environment in the marketplace for healthy completion. Marketing efforts get the word out on pricing of products and services, which not only reaches the intended consumers, but also reaches other companies competing for the consumers’ business. As opposed to companies that have a monopoly on products and services that can charge almost any price, marketing helps keep pricing competitive for a business to try to win over consumers before its competition does. Without competition, well known companies would continue to sell while lesser known companies or new companies would stand little chance of ever becoming successful. Marketing facilitates the healthy competition that allows small businesses and new businesses to be successful enter and grow in the marketplace.
Although marketing is hugely important for a business to succeed, it can also be very expensive. In its first year, a company might spend as much as half of its sales on marketing programs. After the first year, a marketing budget can reach as much as 30 percent–sometimes more–of the annual sales. A marketing program that gives your company the best chance is a healthy mix of different forms of marketing, such as website development, public relations, print and broadcast advertising, design and printing for all print materials, trade shows and other special events.
In essence, marketing factor analysis is changing one marketing variable to see what affect, if any, the change has on the outcome. The change in sales also affects the bottom line of the company, so factor analysis in marketing helps companies determine which marketing efforts it should pursue, which efforts need work and which marketing efforts may meet the cutting room floor.
According to BNet, factor analysis in marketing requires an evaluation of how changing one marketing point, such as price, changes the sales of the product. In order to measure how the factor changes the sales, it requires that only one marketing variable is changed at a time in order to measure the relationship between the variables and the outcome. In marketing, changing one variable can be significant because it may cause an increase or decrease the sales of the product.
An infinite number of marketing variables can exist, which is why it&rsquo;s necessary to alter only one at a time. Marketing variables include the product, the product packaging, the size of the product and the color of the product. The price, distribution channels and marketing strategies may also be variables of the product that can be changed to see how the change makes a difference in the sales of the product.
What Customers Want
Factor analysis in marketing is important because it reflects the perception of the buyer of the product. By testing variables, it is possible for marketing professionals to determine what is important to the customers of the product. For example, if a product is only available in black and the sales reach $150,000 in one year, but when the company adds color options of red, blue and silver, and sales reach $300,000, then the company can conclude through factor analysis that color options are important to the customers of the product. Ultimately, it is imperative to use factor analysis in marketing to create the ideal product for customers, which in turn, increases the sales of the product.
Conducting Factor Analysis
Generally, companies test variables with factor analysis in marketing using tools such as focus groups and surveys. Since making changes to the product itself in order to test variables can be expensive, surveys and focus groups allows companies to gather pertinent information without increasing the cost to manufacture the product. Focus groups and surveys allow companies to gather perceptual information from current and potential customers of the product. This information is important because it allows the company to see the product from the vantage point of the customers and determine which factors in marketing are the most important to the customers. For example, a focus group may see four different package versions of a product and then ask the focus group participants to choose which package they like best and explain why. Companies can use this information to alter product packaging to attract more customers and sell more products.
Factor analysis in marketing can change the way a company sells its product, but factor analysis in marketing is not a science. Grand scale testing is typically required to come to a fair conclusion on the relationship of the variables. It is wise to have a market research expert help to conduct the factor analysis and evaluate the test results to ensure it is not an incorrectly implied cause/effect relationship.