Market Penetration: A Fun Last Topic

Here are some tips for increasing your market penetration:

1. Maintain or increase your product's market share by using more aggressive pricing, launching a smart ad campaign, and look for avenues of sales promotion.
2. Secure dominance in growth markets by finding a new a growing demographic, psychographic, or sociographic to market to. For example, if you notice that people over the age of 65 are starting to buy a particular clothing item a lot, market to those people to capture that growing demographic.
3. DESTROY YOUR COMPETITORS!...with loyalty programs to guarantee a place in the market share. Many grocery stores and websites do this now where you sign up for a membership to receive bonus deals and coupons. Kmart tried this tactic a little too late and now they are hard to find. 
4. This sort of ties in with number 3, but try to get your customers to use your product in greater quantity or more often. After introducing a loyalty program or mailing list, you can continue to advertise a new product or a product that has something new with it. For example, Kraft Mac and Cheese removed the artificial dyes from their "cheese" powder to make it seem like a healthier value (it is still cheese powder, people). 

For all you avid readers out there, Smartling has a pretty comprehensive list about the basics of market penetration (how to plan, when to penetrate a market, how to, etc.) that I will link right here: https://www.smartling.com/market-penetration/

This will be the last blog post for this class. Hopefully everyone learned a lot. I can see I had some regular clicks from within the class so that was neat. Good luck in the Entrepreneur World everyone! 

Subscription Services: The Model of the Future

Have you heard of services like Nature Box or Blue Apron? Ipsy? Loot Crate? Birch Box? All of these are part of a hot new trend: subscription box services. These are services that promise "curated boxes" of whatever genre of products the consumer is interested in. Like make-up? Try ipsy. Like geek gear? Try Loot Crate. There are so many of the services now, and they are relatively cheap to subscribe to, ranging from $10 to $40 per month. So what makes these so appealing to customers? Is this just a fad or a real business venture?

You might be surprised to find out these business are actually quite lucrative. One entrepreneur made a subscription box service that earned $50,000 in 6 months. And the overheard for these businesses is pretty low. Finding products to put in the boxes, hosting a website, and covering shipping costs are the main costs these business face.

These businesses are popular with the younger generations who like the mystery of whats in every box. The boxes are a good example of what it means to know your customers. People want these boxes and the experiences they provide. Many of these boxes have received capital investment and it has quickly become a multi-mullion dollar industry.

These subscription services have somehow managed to market a box without telling you exactly whats in it. This teaches us that strong marketing can be more important than the product itself. Understanding what your customers need, seeing the costs of a businesses, and making relationships with other companies can make a business successful. I think what we have learned in this class, most of all, is that how you market your company is how successful it will be. So put in the research, the time, and the money to develop your brand.

Have You Tried Turning it Off and On Again?

Product Support is something many of us probably don't think about on a daily basis. If our internet is acting up, we find a customer service number. Bad experience at a restaurant? Send a tweet to the company. Need help setting up a program? Live chat is a few clicks away. The fact that many of us only know the hassle of dealing with the support instead of finding it is key. Companies invest in services, instruction manuals, and website to help users remain satisfied when things go wrong (except for Pearson, they are the worst). So what is support?

I focus on customer service a lot (perhaps because examples are so readily available), but customer services is such a general term. Support is more than fixing an order at a restaurant or smiling when greeting a customer. Support is anything a company provides to help customers solve problems. Furniture from IKEA comes with an instruction manual. That is a form of support. If the furniture is broken, there is a number on the box or receipt to call a service desk to get it replaced. That is support.

Tech companies like Apple and Microsoft have good examples of what support can mean. Microsoft stopped mainstream development of their widely popular operating system Windows 7 in January of 2015. That means they stopped creating products and changes for it. However, they will continue to release security updates (if any breaches are found) until 2020. That is supporting a product. Even when switching from Windows 8 to Windows 10, they gave consumers about a year for a free upgrade to Windows 10. This gave users an incentive to upgrade, but also ample time to make the switch. They released the new OS with trouble shooting software and compatibility fixes. Again, that is support.

Obviously, no one in this class is a tech mogul (yet 😉) but we can look at these things as examples. How can your small business provide support for your product or service? Will you provide a phone number they can call if they have problems? Will you invest in highly detailed instructions? Will you offer warranties in case something breaks? These things can make or break a company's reputation with consumers. It is worth considering if you do not want to end up like Pearson; they are the worst.

Shopping for a Gaming Computer

Recently, I have been in the market to buy a gaming computer. Millions of Americans have a console (Xbox or Playstation), but they have one major draw back: their hardware quickly falls behind the ever-changing gaming market on the computer. (This part is not about my current point, but it does bring up an interesting question about supporting a product, for another post I suppose).

Back to the narrative, I have been scouring the internet looking for "Gaming Computers" and there is a popular debate surrounding them: pre-built or home built. That is, do I buy a computer that is ready to play or order all the parts and assemble it myself to save some money? Both options require that the consumer know a little something about computers. Lets look at this example (http://www.ibuypower.com/Site/Computer/Desktops). Simply scrolling down the page, you'll see the absolute garbage can of letters and numbers that is "computer specifics." Does the average person know the different between a Radeon R7 GPU or an NVIDIA GTX GPU? What is an Intel i5 CPU? WHAT IS A GPU OR CPU? 

I only cited one example, but it seems all the pre-built pc markets and part retailers expect the user to do the research to figure out what they need or want to play their games. I think these cites should absolutely tell the specifics of each computer or parts, but none of them answer the average buyer's simple question: Does it do games good? (intentionally obtuse). How do we know buyers want simple plug-and-play systems? Look at the console market I have already mentioned. If you buy an Xbox, you know it will play all the Xbox games in the Xbox store to the best of its ability. 

Hunter, how is this about marketing?

Right, yes, marketing. It seems we have two independent solutions to the same market. Gaming computers are the highly customizable yet overly-complex way to play video games. Consoles are the layman's quick fix to having something that can play Call of Duty. And this extends to many markets. You can buy a simple slingshot, or you can buy a slingshot with a laser sight and a telegraphic scope (for some reason). My point is, figure out who your company is in the market. Are you the complicated yet personal solution, or the simple, guaranteed-to-work product? Do you expect people to have knowledge about a certain area before they purchase your product? 

As a closing thought: I guarantee the company that figures out how to keep the premium price of PC's while having the simple marketing message  "This will play your games perfectly" will break into both markets, and may rise as the preferred choice. Dell's line of PC's named Alienware almost had this idea right, but they executed it the wrong way. They released a customizable console (Alpha) that runs on Steam OS (Steam is a online market for games). The problem is the Alpha limits people to only using Steam games that are compatible with it. It is my opinion that having a three standardized computers guaranteed to run games at Medium, High, or Ultra settings would have much better success breaking into the market. Cosmetic customization would help meet the "I am an individual" market of the Computer Gaming community.   

Double I's

A topic that I enjoy musing about on Sunday drives or while strolling down a grocery aisle is: what makes my preferred brands successful? Lets check out this video first.

In this video, Scott Galloway talks about several services I interact with on a daily basis. Snapchat, Facebook, Amazon, Walmart, Apple. All these companies are common but Galloway discusses why some are more successful than others.

Spotify v. Apple Music
Though I am not quite an audiophile, I do enjoy music as much as (if not more than) the average person. Spotify and Apple both have streaming services that allow users to listen to musics from thousands of artists, but I definitely prefer Spotify. Why is that? Well, I enjoy my usual playlist, but I also want to find new music. I find it much easier to find new artists I like with Spotify because they analyze what I listen to. They create a "Discover Weekly" playlist for me to listen to each Sunday to find new music. And as an added bonus, they send me an email at the end of the month telling me my most played songs, the number of unique artists and tracks listened to, etc. It is equal parts interaction and intelligence.

Amazon v. Walmart
No surprise here, I prefer Amazon to Walmart. Though I do a buy some groceries from Walmart, it is rare I venture in there for non-grocery items. Amazon offers 2-day delivering directly to my door which is convenient enough that I do not mind the wait. Amazon shows me relevant items, offers surveys, etc (again). Walmart just feels impersonal and un-tailored like a suit that is "one size fits all".

I know this class is more focused on small scale business ventures, but it seems the underlying point in what we learn is that some principals in business are constant. Creating something for a customer that feels personal and relevant can go a long way to establish your brand. I believe that a company NEEDS to be intelligent and interactive. It is increasingly easy to gather user data, but often times it seems that user data is squandered on deciding what items to stock up on. Inventory is important, but having a better experience for customers can increase your movement of inventory.

Value Propositions

Recently, our instructor went in to more detail about what a value proposition is. A Value Proposition should tell employees, potential business partners, and customer who and what your company is. I decided to raid my pantry to see if I could find any good examples of value propositions:

Telula Green Zing Beverage: Green Zing is a healthy blend of juiced leafy greens and citrus with just a hint of ginger. It's packed with health nutrients, antioxidants, and a crisp, bold taste designed to fill you up with healthy fruits and veggies from the farm. 

What we can capture from this is that 1) they use fresh vegetables 2) it is designed to be healthy and delicious and 3) it can supplement a meal.

Progresso Soup: For over 100 years, our kitchens have crafted honest, soul-satisfying recipes with real ingredients you're proud to serve.

This establishes a history of the company, tells that it is honest (both in ingredients and business), and and says that you the consumer would be proud of the soup. 

Mom Brands (Malt O Meal): Great cereal doesn't have to be expensive. Since 2007, American families have saved over a billion dollars on breakfast cereal by choosing our brands over the more expensive varieties. And they haven't sacrificed taste or nutrition. Maybe that's how MOM Brands has become the fastest growing cereal company in America.

This one is probably the best example. It establishes that their cereal is less expensive but is good and nutritional. The company is family owned and growing quickly. It is a message to consumers and potential partners. 

Obviously, if you are not in the food industry, your value proposition should not sound as appetizing. However, what we can learn from these examples is what kind of message you should try to send. If you company is a clean option like Telula, promote that "value". If you have a history of good service like Progresso, use it. If you are the "less expensive" option, let it be known.

Market Surveys: Speaking to Consumers

In order to fain an understand of what people want or how they feel about certain product and ideas, companies use market surveys to gather data. This data can then be used on advertisements strategies, product development, or establishing a market. While market surveys are helpful, it is unlikely that your small business will be able to afford on of the big marketing firms. For this reason, I have gathered and thought of some ways to do your own market survey:

Email: Probably the easiest and most convenient for both parties, emails can be the "fire and forget" method. Asking customers to leave their email in exchange for small discounts can be a great way to 1) build up your database of potential survey-takers and 2) build customer loyalty. I recommend the email method most. Think about it: how many companies currently have your email?

Telephone: phone numbers are easy to get but more labor intensive. Instead of sending a mass email, business will have to call each number on their list, which takes time. Also, many people forward numbers they do not recognize. Numbers can be effective to gather market information, but it is a longer, more difficult process.

Mail: Probably the slowest method, mail can be used to conduct the same surveys. However, companies must rely on customer to their mail the surveys back or bring them to a physical location. For this method, it is highly recommended to give customers an incentive to do so. Mail can be easy to manage and it relatively easy to send off. The return is largely uncertain.

In-store Survey: a great way to gauge how your customers feel is to simply ask them. Having paper surveys in your store can be a quick and easy way for your customers to give feedback. Unfortunately, the delivery of this is fairly limited. You can only reach the people in the store.

Most important for collecting this data is be openly grateful for what consumers give you. If offering incentives is possible, do it. Keep in mind, only the willing will be giving you information. Sometimes purchasing data or doing independent research will be necessary.