Marketing Growth – Building a Stronger Business
This course has made an impact on me as I view myself in relation to my career goals. I have had it in mind that I would be going back to school to finish my degree for a number of years. I’ve been very clear that I would get my CPA certification and supplement my already existing business with the ability to provide income tax consulting and preparation. This course has helped me to have more focus on specifically how I would go about that. I realize after studying many concepts in this course that my focus has been too generalized.
The study of the marketing plan allowed more insight in to the importance of a target market, branding, and positioning strategy. The target market is important in order to narrow down the types of customers I will work with in order to provide specialized service to a particular market. Because I will be focuses on a smaller segment of businesses my expertise in this area will expand.
Branding will be an important element of my focus and should take into consideration the image that I want to present to my clients. Since I am relatively a one person show, I haven’t recognized the value of branding. I now believe that branding is even more important in my circumstances and that the image I portray will go a long way in how my clients view my practice.
Lastly, I recognize the importance of a positioning strategy and will focus on offering a more-for-less product. Because I will be newly certified I will not be as knowledgeable as many of the more seasoned CPA’s but I will be able to offer my services at considerably less. I will be able to offer much more than an Accountant because of my CPA standing, but do so at Accountants rates.
Final Analysis – Marketing Challenges
Marketing Budgets and Writing Right
Initially I was concerned with determining consumer buying patterns and how to stay ahead of market trends. I still consider this to be a big issue that a marketer faces. Research and trend tracking appear to be the best method for analyzing an approach. In the process of determining a product to develop, our team brainstormed ideas and then performed research on each idea in order to determine its value. Once value was established, significant research was conducted to confirm that market trends would support entry into the market.
In addition to the above concern, I’ve developed a greater appreciation for and concern regarding the amount a company and a marketer should budget to get a product to the consumer. Using percentage or sales or profits and unit of sales are all methods to determine budget control. However, none of them suggest a maximum amount to be spent or a minimum amount to be spent in relations to what advertising actually costs. For example, if a company feels it must use television advertising to reach a maximum amount of people such as with Muddy Buddy bars, how do we know if we should push the boundaries in the calculated budget? Perhaps this is why Red Bull came up with its innovative approach to marketing. It was far too expensive within its budget for traditional paid advertising so it found another way.
Where I learned the most in this course has more to do with writing mechanics and fundamentals. Marketing itself is not really a passion for me. I found myself more motivated by writing and editing. My biggest take away from this course was writing, editing and reviewing your comments. It was a serious wake-up call getting the grade for the first half of the marketing planning assignment. It was also a great reminder to not let things get submitted with my name on it without a thorough review. The writing lessons I learned in this class will be a tremendous benefit next semester when working on the capstone project.
Plans – SLAS – Susan Laccabue Accounting Services Target Marketing
I am a professional accountant with an established bookkeeping practice. My business is called Susan Laccabue Accounting Services. The business focuses on managing commercial and retail clients that fall within one and ten million in revenue. The preceding description was the extent of my product focus and target market.
With the information gained from this course and the completion of my CPA licensing, I plan to expand my target market and the description of the services offered. At this point the business will be capable of additional services and a redirected focus will be necessary.
By taking into consideration differentiation and positioning, I can continue to cater to small business environments but expand its parameters. The new focus will be business from one million to twenty million with specialties that include: commercial construction, service and product retail and small manufacturing. Additional parameters will include business with employees from zero to 100 and companies that utilize work in progress schedules and inventories. Additionally, I will be qualified to work with sole proprietors, LLC, S-Corporations and trusts. Bookkeeping services will continue to be offered along with tax preparation services.
The target market geographic which was not previously defined will include Santa Clara County, Santa Cruz County and Monterey County. The demographic targeted in Santa Cruz and Monterey County will be product and service retail. The value proposition proposed will be more-for-less. While my service hourly rate is at the high end for bookkeeping service, it will be at the lower end for CPA’s.
Reflection 10 – Marketing Channels
Marketing channels include firms that have partnered together for their common good. Muddy Buddy bars will be made and distributed by General Mills. While it will be the maker of the product, many companies will have a stake in the final delivery to the consumer. For General Mills to be successful it must establish relationships with raw material suppliers for materials such as packaging and raw ingredients for its recipes. It will have a manufacturing center shared with other General Mills product lines. It will utilize distribution centers nationwide to get its product to wholesalers in various cities. Wholesalers will in turn get its product to assorted retailers who will then sell to consumers.
Individual channel success depends on overall channel success; therefore motivation is strong to encourage all channels work together smoothly. Occasionally, channel conflict can occur. Channel conflicts occur in two fashions and are generally over goals, roles, and rewards. Horizontal conflicts occur among firms at the same level of the channel. In the case of General Mills and the making of Muddy Buddy bars, a horizontal conflict may occur with its competitors if it prices itself below the competition thus driving prices down. Since Muddy Buddy bar’s will be offered at a higher price than its competitors, a possible cause for horizontal conflict may be that Muddy Buddy bars is offering a higher value to its consumers thus making the price and value competition. Vertical conflict occurs between different levels of the same channel. This is when producers, wholesalers, and retailers act as a unified system. One channel member owns the others or has enough power to inflict cooperation. An example of this may be if Wal-Mart will only sell Muddy Buddy bars in bulk and will not carry its product if distribution to other box stores is done in other forms than bulk. Wal-Mart has enough pull to motivate General Mills to eliminate individual bar sales to box stores if it wants to keep Wal-Mart as a retailer.
Reflection 9 – Pricing Strategy
Pricing strategy follows three main strategies: Customer value based pricing, cost based pricing and competition based pricing. Customer value based pricing takes into consideration a buyer’s perception of value as the focus for setting the price. Understanding how much value a consumer places on a product is essential in determining the price point. Value based pricing requires the marketer to consider price prior to the marketing program and as part of the marketing mix. Cost based pricing is generally product driven. The company will design a product, add up the cost of making a product and then determine the price. The goal of marketers will be to convince buyers that the price is justified by the product’s value. Customer value perception will usually set ceiling price of the product whereas the cost based pricing will set the minimum the company can charge. Competition based pricing involves setting prices based on its competitors strategies. Ensuring that a company is comparing itself evenly with its competitor is important in knowing what price point to consider.
Types of costs include variable costs, costs that vary with level of output and production and fixed costs, costs that remain the same regardless of the level of output. The total costs are the sum of the variable and fixed costs for any given level of production. A simple way to determine pricing is cost plus markup. This would include a standard markup on the products costs. Break even analysis is another approach determining price. Analysis can be used to determine what the minimum number of units needed to breakeven or the number in revenue needed to be sold in order to breakeven. Breakeven analysis can be used to set profit at a particular percentage whether its zero or higher.
Muddy Buddy used cost based analysis and competition based analysis to determine its price point. Initially it had priced itself at $1.79 per bar with intent at a higher profit margin, but after a breakeven analysis was conducted, fixed and variable costs were determined, and an analysis of its competition’s price range, it elected to enter the market with the lower cost of $1.49 average per bar. The average cost per bar is due to the difference in prices for single serving vs. packages of six and takes into consideration the number of promotional bars and samples that will be distributed through advertising.