Marketing Strategies for the New Business Environment - Marketing
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Marketing Strategies for the New Business Environment

By William Atkinson

Article Date: 10-01-2010
Copyright(C) 2010 Associated Equipment Distributors. All Rights Reserved.

Important reminders for effectively reaching your target customers – because while conditions have changed, their basic needs have not.

In recent years, there has been a massive move to new, innovative electronic methods of marketing and communicating with customers. The two most significant are websites and e-mail. In fact, for some companies, websites and e-mails have come to represent the “be all and end all” of their marketing programs.
Certainly, new approaches to marketing have their place. However, dealers should not rely on them exclusively. It is important to always remember the basics of marketing, and build off these basics to create effective, coordinated marketing campaigns.
A marketing textbook titled, Principles of Marketing, now in its 13th edition, and co-authored by Philip Kotler and Gary Armstrong, focuses its first chapter on what the authors consider to be the basics of marketing – a five-step model.
1.) Understanding the marketplace and the needs and wants of customers.
“You need to be able to understand your customers and the environments in which they operate,” said Dr. Gary Armstrong, Blackwell Distinguished Professor Emeritus of Marketing at the University of North Carolina (Chapel Hill), and one of the co-authors of the book. “The whole idea of marketing strategy is to help customers solve problems,” he told CED.
The authors identify five core customer and marketplace concepts. First is to identify customer needs, wants and demands. Second is to create the right mix of market offerings. These are products, services, and experiences. Third is to find ways to provide customer value and satisfaction. Fourth is to build and maintain desirable exchange relationships with target audiences involving products, services, ideas, etc. This involves not only attracting new customers, but also retaining existing customers. Fifth is to manage markets to bring about profitable customer relationships.
2.) Design a customer-driven marketing strategy.
There are a number of steps here. One is to identify the customers (market segment) that you want to attract. A second is to create a value proposition (how you plan to differentiate yourself in the marketplace from your competitors). A third is to design strategies that will build profitable relationships with target customers.
Customer positioning, segmentation, and targeting are very important, according to Armstrong. “If you look at marketing from a strategic point of view, positioning is figuring out what you want to be to customers,” he explained. Segmentation and targeting are figuring out which customers are important. “You don’t want to serve every customer,” he pointed out. “You want to pick out customers to whom you can deliver your kind of value.”
3.) Construct an integrated marketing program that delivers superior value.
The overall marketing strategy (discussed earlier) is designed to identify the customers that you want to serve. In this step, you create an integrated marketing program that will actually deliver the intended value to the target customers. This involves what the authors call the four Ps: Product, Price, Place and Promotion. All are important, but for dealers, pricing can be particularly important. “When times get tough, it can be appealing to retreat on price as a competitive weapon,” said Armstrong. This may not be the best idea, though, unless you are selling an economy line from the start. “Caterpillar, for example, has always been a premium pricer,” he added. “Instead of trying to match economic cycles by reducing prices, they show customers that, in the long run, it is the economic choice, in terms of operating costs, resale value, and so on.” The company utilizes a slogan, ‘Buy the iron. Get the company.’ “This means that once you buy a Caterpillar, you have the full support of the company behind you.”
4.) Build profitable customer relationships, and create customer delight.
This focuses on the all-important concept of customer relationship management. According to the authors, “Customer relationship management (CRM) is perhaps the most important concept of modern marketing. Until recently, CRM has been defined narrowly as a customer data management activity. By this definition, it involves managing detailed information about individual customers and carefully managing customer ‘touch points’ in order to maximize customer loyalty.” They go on to note that, “More recently, however, customer relationship management has taken on a broader meaning. In the broader sense, customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping, and growing customers.”
Specifically, Armstrong emphasizes the importance of developing strong relationships with your customers. “These days, in fact, marketing is all about relationships, especially when you are dealing with value-added and premium-priced products,” he stated. “You really have to care about your customers.”
5.) “If you do all of this right…
“…it allows you to capture value back from the customer, in the form of loyal customers, sales, and profit,” said Armstrong.
Back to Basics
Steve Pizzolato, president and founder of Avala Marketing (St. Louis, Mo.), is also a believer in the important of basics in marketing. “Look at your brand positioning,” he suggests. “Make sure that your brand is defined in terms of what you are trying to convey to your customer.” For example: Is your brand the one that is best in service? And/or does it offer the widest product line? And/or does it provide the best trained salespeople? And/or does it have the most convenient locations?
Staying up to date is also important, not necessarily from a technology point of view, but from a very basic point of view. For dealers, according to Pizzolato, an important focus involves keeping showrooms up to date, neat, and professional.
“During an economic downturn, it can be easy to cut corners and not do the basic things that you need to do,” he said. That is, it is easy to let the showroom “slide” into disrepair, or just allow it to continue to look the same as it has for years, with nothing new to catch the eye of customers as they walk in the door. “Think about it,” said Pizzolato. “You wouldn’t come to work with an old shirt, dirty pants, and bowling shoes. Your showroom should demonstrate to customers that you are staying up to date.” It should also reflect your pride.
Communication Strategies
As noted earlier, the Web and e-mail have revolutionized marketing. However, according to Pizzolato, there are some things to be said for more traditional forms of communicating with customers, especially for equipment dealers.
“Contrary to the direction that has existed, with everyone going into the Web, e-mail, and social networks, we are now finding that ‘Everything old is new again,’” he stated. “In other words, we are now finding better results by going back to more traditional methods of marketing.”
What has happened, he notes, is that a lot of companies have come to use technology as a crutch. “They send a lot of e-mails, or direct everyone to their websites and hope this will suffice.” It doesn’t.
For equipment dealers, this means several things, according to Pizzolato.
  • Use print-direct communication. Send customers very well-done print pieces. “The proliferation of e-mails has been causing customers to just delete them,” he said. “In addition, a lot of e-mails don’t even get to customers in the first place, because spam filters block them.”
  • Make sure that your databases are clean and current. “You can send mail or e-mails all day long to your customers,” he noted. However, if you don’t know that the people these are directed to are even the people whom you want to target, you are wasting time and money. More importantly, you aren’t getting your message out. Confirm that the people you are trying to reach are still in those positions.
  • Another avenue to communicate with customers is via phone, according to Pizzolato.
  • Then, look at the results of your communication outreach efforts. Determine which way or ways to which customers seem to be most responsive, and then put additional effort into that way. “However, don’t discard everything else,” he cautioned. Pizzolato recommends a balanced strategy that involves a combination of a number of different avenues to reach customers.
Jane Cooper, president of Cooper Hong Inc. (St. Charles, Ill.), also emphasizes the importance of effective communications in a marketing program.
“Construction remains a very hands-on business, and that isn’t the case with all industries,” she explained. “As a result, we suggest that dealers continue to do some of the things that have been important and effective for them in the past that relate to ways to ‘touch’ the customer on a regular basis.” For example, she recommends that when you do a program or promotion, do so in such a way that you have the opportunity to do follow-up.
There are types of follow-up that you can do inexpensively, such as e-mail. However, according to Cooper, before you do this, you need to have made more direct contact with the customer first, either by regular mail, by phone, or in person. “After you have made this kind of more personal contact, you can ask customers to log onto a website or to open an e-mail,” she suggested. “You also have to remember that most of your customers aren’t people who are sitting in offices all day long on their computers.”
Cell phone communication can be very effective. “If you think back years ago when cell phones were still kind of novel, some of the very earliest adopters of cell phones were contractors,” Cooper said. “And even before that, they were some of the earliest adopters of car phones.” The reason? Contractors are in the field most of the time, and they needed to find ways to stay connected.
“Along the same lines, we believe that contractors will be on the forefront of using smartphones in ways that are appropriate for their businesses, such as sending and receiving photos from worksites,” continued Cooper. This can also be an effective avenue for dealers to communicate with customers.
Regardless what form of communication you use – direct mail, in person, office phone, cell phone, or e-mail – you always need to be sure you are providing value, information that the customer will find important and useful. In fact, according to Cooper, some of the dealers she knows who are bucking the trend these days and are actually growing their businesses are the ones who are finding ways to provide the most value to their customers in their marketing communications.

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