Basics of Effective Marketing

by CRP Partner Gene Baldwin
as published in Franchise Times

I recently attended a marketing and advertising meeting where the media buyer reminded me of the four key elements of effective marketing as we were considering a new campaign. Let’s take a quick look at each element individually.

• Product. The first key element is your brand and the unique products you offer. Most small to mid-sized retail companies must compete by offering a clearly differentiated group of products. Those products, along with the awareness and perception of your brand, form the backbone of your advertising message. When promoting products, I have found that the safest advertising is promoting the unique elements of your core products. If sales have been soft, it may be a good time to go back to a time-tested offering that has historically driven traffic. The next safest product is one that presents your particular spin on a generically popular product. An example from the restaurant business would be a promotion featuring pizza or burgers. The most risky product to promote is a new offering. Before promoting new products, make sure you have done sufficient testing. By promoting a new product, you are seeking a new customer and it can be very difficult to attract that new customer, especially if you have a limited advertising budget. Also, if you introduce a new product, be sure to give that new product a name that does not need to be explained to the customer. It is pretty temping to give a new product some “cutesy” name that will mean nothing to the customer unless you spend a significant sum on consumer education.
• Price. In today’s consumer driven market, price is a key driver of consumer preference.  Wouldn’t it be great if consumer products inflation would come back for just a few years? The profit flow through on a price increase is 100%. Wow, what money you could make. However, the proliferation of retail businesses in this real estate boom market has created a competitive environment where price increases are few and far between. In my view an attractive price is necessary to secure an increase in guest counts. Just because you advertise an attractive price does not mean you must suffer average ticket damage. Train store personnel to up-sell customers to higher-priced offerings or suggestively sell add-on products.
• Promotion. The third element of effective marketing is the promotion you are employing to drive traffic. Besides having quality creative, understanding the proper media for the promotion is very important. Today, there are many choices of both broadcast and print media. In broadcast, you have the choice of network television, cable television and radio. In print, the primary media is newspaper advertising and direct mail. To have a successful promotion, you must determine the most effective means of communicating product and price to your desired audience. To do this properly you must understand the shopping, viewing or listening habits of the consumer you are trying to reach. An easy example would be advertising designed to attract children with television advertising. In this case it would be most effective to advertising on “Nickelodeon”, or the ABC family channel. Spending money of consumer research to properly target your core customer may be costly, but it should be done. Also, I find that many companies attempt to use broadcast media even when they do not have the budget to be able to afford a long-term and effective campaign. When advertising and marketing funds are in short supply, you are better served to use LSM (local store marketing) promotions to drive traffic. I believe the key to effective LSM is putting the right person on the job. A good LSM manager is a key member of your organization and since most of their time is spent outside the store, that position must be both managed and compensated differently from store management.
• Place. The final element of effective marketing is the placement of the retail location. An old adage says that success in real estate boils down to three elements: location, location and location. Successful companies develop a disciplined approach to real estate acquisitions. They understand where their customer lives and where they come from to shop with them. They understand the need to group their stores into key markets to maximize advertising and market leverage and finally they understand the real estate economics that will work for their concept. 

These four key elements are the basics of a successful marketing approach. Operators need the assistance of advertising and marketing professionals from either inside or outside the company to put the details around these basic principles. For most small to mid-sized retail companies a thoughtful, disciplined and basic approach to advertising and marketing will get the best results.

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