A Guide to Starting and
Expanding Your Small Business
in Hants County

MARKETING

Many people use the terms “marketing” and “advertising” interchangeably. But marketing is a process of researching, strategizing, and planning your target market, product/service, price, distribution channels, and promotions (advertising). The decisions you make in each of these areas fit together and are based on market research. A marketing plan or strategy is a key element in any business plan.

Market Research

Research need not be an overwhelming chore. It is important because it helps objectively prove whether or not your business can succeed. The Canada-Nova Scotia Business Service Centre (at the Job Resource Centre and Futureworx Job Search Centre) and the Hants RDA are excellent sources for consumer spending data and other market statistics. Try to learn about market size, trends, and geography. To understand your competitors, collect some cheap competitive intelligence. (Don’t forget indirect competitors that sell a different product/service but one that fills the same need). The Internet is a great resource of competitive intelligence. If you have the opportunity, you can also make a “secret shopper” visit. Try to understand your competitors’ customers. Critique your competitors’ products and services. Also, take note of their pricing, distribution, and promotion methods. Your market research will help you design a marketing plan that reaches the right consumers while learning from your competitors’ weaknesses.

Target Market

Understanding the demographics of your customers (eg. Dual income, no kids, aged 30-40) is not enough. You should also strive to understand their “psychographics” or, simply stated, “why they buy”. Consumers are rarely searching for the cheapest solution to their problem. Loyalty, prestige, perceived risks, emotions, personality, values, attitudes, and culture all play a role in the consumers’ decisions. The purchase process (“how they buy”) should also be understood. A purchase can involve information gatherers, influencers, decision makers, purchasers and users. One person rarely assumes all five of these roles. A great marketer understands how to influence all elements of consumer behaviour.

Product / Service

Most entrepreneurs know their product or service better than anyone else. Some have even invented an entirely new product or service (If this is your situation, consider contacting the Canada-NS Business Service Centre for information on intellectual property protection). But be sure to take the time to translate your product’s many features into benefit statements. Speaking about “benefits” helps your customers quickly understand why your product/service is valuable to them and how it differs from your competitors’ offerings. Be careful when making claims about human health benefits, though, because these claims are regulated by the federal government.

Consider the design of your “extended product” or “extended service”, including: the packaging; customer service experience; and any warranty, return policy, or service guarantee.

Price

Consumers do not always choose the lowest price. For example, higher prices (“premium prices”) often reinforce the idea that a product or service is of high quality. Also, price-conscious consumers perceive odd-ending prices to be lower than even-ending ones (this is why many prices end in .99, .97 and .95 rather than .00, .10 and .90). There are three common approaches to setting a price. “Pricing to the market” involves determining directly from your customers (or by observing your competitors) what they are willing to pay. The “cost approach” involves calculating a per-unit cost (materials + labour + overhead per unit) and adding the desired profit. “Break-even pricing” divides total annual expenses by an estimate of your annual sales volume (in units of product or time). Try combining all three of these approaches to make your price decision.

Sales & Distribution

Your sales/distribution plan describes how the transaction between you and your customer will take place. If you sell directly to the customer, consider the location, layout, design, accessibility, and general “look and feel” of your retail space or facility. Alternatively you might sell directly to the customer via the Internet, direct mail, catalogue order, or other means. These methods require careful logistics planning and possibly coordination with a shipping company or Canada Post. You might also hire your own sales people or engage an independent sales agent, wholesalers, retailers and any number of other external organizations or individuals. Be careful to coordinate the supply chain so you meet or exceed the customer’s expectations.

As your business expands, your distribution channels may change and you may need to begin managing your capacity and customer demand. You might also start looking toward export markets. Nova Scotia Business Inc. can provide consulting, trade missions, and financial assistance to help get your product/service into markets outside Atlantic Canada.

Promotion

Any money you spend on promotion should be aimed at your target market and should convert into sales. Sometimes a roadside sign is all you needs thanks to a great location (see sign permits). Other times, customers are best reached through paid advertising in newspapers, magazines, radio, television, billboards, tradeshows, and other media. Websites are becoming an important medium for many businesses. Some small businesses opt for the cheapest advertising rather than the media to which their customers pay attention.

Free publicity can often be just as effective as paid promotion. Word of mouth referrals are the best form of promotion in a small community like ours. Think about how you can “WOW!” opinion leaders in your target market. Understand your customers expectations and exceed them to generate “hype”. Consider throwing a grand opening and other special events. Issue press releases to inform journalists about your company’s comings and goings: new products, services, employees, anniversaries, and other interesting news. And be sure to take advantage of free business listings: register your business at HantsCounty.com and submit your opening announcement to the Chronicle Herald’s weekly “Open for Business” column (business@herald.ca or fax 902-426-1158).

For a list of local media outlets, print shops, graphic designers, webpage designers and more, visit the business directory at HantsCounty.com.

Keep track of what works to get the best bang for your buck. Ask new customers how they heard about you and move your money and effort to the most effective promotional methods. And since it can be so costly to attract a new customer, do what you can to encourage repeat business and customer loyalty. Be creative about rewarding loyalty and keeping in touch with your frequent customers.

Advice and Support

The following organizations provide marketing advice and support in Hants County:

A marketing consultant could provide your business with comprehensive advice and support. Many are listed on HantsCounty.com under “consulting”, but consider getting a referral from a trusted business acquaintance.

Finally, don’t forget your customers as a source of marketing advice. Collect feedback to continuously improve the elements of your marketing strategy.