Getting marketing right
Theo Paphitis expects start-ups to invest in building a market, while ...
Theo Paphitis expects start-ups to invest in building a market, while Fiona Ellis-Chadwick says an audit can help getting marketing right.
- Duration: 5 mins
- Published on: Friday 15th January 2010
- Introductory Level
- Posted under: Business Research Methods
Theo Paphitis says you shouldn't skimp on your upfront marketing:
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Now of course day one it can be really, really expensive. I mean one of the things that was infuriating me about Sleek and Tanika was she was saying I'm going to give the distributor 5%. Well let’s assume that 5% was the right figure, which I disagreed with, 5% of nothing is nothing, at the moment there is no sales! To get sales you need to market. You have to expect to put money on the table upfront, then the percentage of sales might have some relevance. Then of course you start arguing whether 5% is the right figure or 20% is the right figure.
But day one, you’ve got to invest. And what impressed me about Marmite, they understood that. They knew that every last penny they took in
Fiona Ellis-Chadwick explains how a marketing audit can help your business:
WatchYou need the Flash Player (version 7 or higher) to view this clip - download Flash. http://podcast.open.ac.uk/open2media/theo/fiona_marketing_audit.flv Copyright The Open University
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A marketing audit is a key part of marketing strategy and planning. It’s no good setting off on a journey, you need to know where you're starting from; you need to know what competencies, capabilities you’ve got. So what you do is you do what we call a marketing audit to say well, Where are we now? You know, what kind of state’s the business in? Are we successful, do we have some good products, are we good at communications? Then you need to reflect on well how did we get here?
Now it might be that we’re in a really, really good position, or it might be that we’re in a really, really bad position, so let’s take the latter case and think well how did we get here? Well maybe we've had some failed marketing communications efforts; in other words things like advertising, sales promotions, maybe they’ve repeatedly failed. So that gives us something good to focus on. So once we've actually looked at the situation, we can then start to think right, so we know where we are, we know how we got here, and now we can move onto the next level because we can start to think about well where do we want to be heading?
Now, in marketing terms, what we need to be thinking about is well which markets with which products, and this helps us to set some clear objectives. Now it might be that we’re a company that’s doing pretty well and we've got a big share of the market and we've got a good product range, so what we actually want to do is we want to get our existing customers to buy more of our products. So we can set about encouraging perhaps people to use the product more frequently. Shampoo is a product that we've over the years been encouraged to use more and more, so we consume more product, and that’s a pretty safe market combination to be heading into. But if we’re looking for new markets, then we might want to find new customers to sell to, but we can still take our existing product range.
Now, if we take our existing product range, we know the product, we know the profitability, so we’re taking a bit of a risk going into a new market, but we can do some research and we can know quite a lot about that market before we enter it. The most risky objective we can set for ourselves is to take a new product into a new market, and this is why a lot of startup businesses fail, because by very definition they have to take new products into new markets, and there are so many risks, so many risks that they can't anticipate, that quite often they end up giving up and closing.
How to get marketing right? One way is to consider The Open University Business School course Marketing In Practice.
Selling direct to the public? The Open University has a course offering An Introduction To Retail Management And Marketing.
Copyright & revisions
Originally published: Friday, 15th January 2010
Last updated on: Saturday, 1st May 2010
- Body text - Creative-Commons: The Open University
- Video 1 - Copyrighted: Tiger Aspect
- Video 2 - Copyrighted: The Open University
- Audio 1 - Copyrighted: Tiger Aspect
- Audio 2 - Copyrighted: The Open University
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