Penetrating the market

This article was written by Ed Hatton for the column the Start up Coach and published by the South African edition of Entrepreneur magazine in April 2012 and is posted here by their kind permission.

Start ups in small towns need excellent marketing strategies

 Challenge

This entrepreneur plans to start an event business that will offer wedding and party planning and a catering service offering African gourmet meals with a twist.  He requests advice on marketing and penetrating the limited market in his small town. As an unknown young black entrepreneur he has concerns about succeeding in marketing to a predominantly white and older community.

Response

The first step is market and competition evaluation, to determine if there is enough market, and whether his business could win against established competitors. If either of these are negative then the entrepreneur needs to answer totally different questions.

Assuming this has been done and the market is available, then there is a mix of good and scary news. The good is that he is thinking of how to be different. The idea of gourmet African meals is exactly the sort of unique selling proposition that great businesses are made of.  The scary part is that any market is really hard to penetrate. What is usually in the target’s mind on first approach is something like:

• I don’t know you, I don’t know your business and I don’t know why I should talk to you;
• I have never heard of your products, and I am not sure why they should interest me;
• I have existing suppliers and I am generally happy with them;
• Now what was it you wanted to sell me?

And yet he is probably always on the lookout for new and interesting products and services, and will have at least some unmet needs.

I hope the readers are getting the idea here: The challenge is not about selling to a different demographic, it is about communicating an offer that interests or excites potential consumers and satisfies their needs. It is a good idea to learn about cultural differences in things like eye contact and handshakes, but all entrepreneurs should be doing that anyway.

Getting started

A good start to marketing is to survey a sample of individuals or companies in the target market. A structured, brief questionnaire, offered professionally at a convenient time will tell the entrepreneur how his ideas will be received. Asking the respondent what they would request if they could have anything from a supplier will identify unmet needs. A reasonable sample, perhaps 50 questionnaires will give good information, and probably produce a bonus of lots of respondents asking for more information as soon as his business is launched.

The smaller the market the more precise and focused the marketing material must be. It should be tailored to emphasise the desirable features identified by the survey. Marketing material includes a web site, brochures, business cards and presentations. The key features must also be applied to canvassing tools, like mailers, telephone scripts, competitions or samples.

Developing the first prospective customers should come from canvassing and networking, which should be done in person and on social media. The canvassing part is a daunting prospect that few entrepreneurs enjoy, whether the media is e-mail, telephone, presenting to groups or distributing samples. The entrepreneur can lighten the approach by using a competition, with a prize as an incentive for potential customers to complete a questionnaire or join the mail list. However uncomfortable it is, entrepreneurs should be prepared to canvass, especially at start up. Eventually most sales should come from repeat customers, or by word of mouth.

Divided focus

This entrepreneur is planning two product ranges, function planning, and African gourmet catering. It may be a better idea to focus on one of those to start with, especially the one where there is a bold idea. The competition in wedding and party planning is intense even in small communities, with entrenched and experienced competitors. Breaking into this market could be tough and it may suit this entrepreneur to team up with an established wedding or party planner and focus on his interesting catering business. He could be pleasantly surprised by the strength of demand.

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