Market and Price

Marketing FAQs

Where can I find the association for the industry that I wish to enter into?

Two excellent sources for locating associations are the American Society of Association Executives and the Marketing Resource Center. By using their interactive keyword search capabilities, you can search through over 35,000 associations and organizations that cover almost every type of business imaginable.

Where can I go to find the Chambers of Commerce surrounding the community where I wish to open my business?

ChamberBiz.com has a very comprehensive on-line Chamber Finder tool that should be point you in the right direction.

What does marketing involve?

Marketing is your most important organizing tool. There are four basic aspects of marketing, often called the four Ps:

• Product: The item or service you sell.
• Price: The amount you charge for your product or service.
• Promote: The ways you inform your market as to who, what, and where you are.
• Provide: The channels you use to take the product to the customer.

As you can see, marketing encompasses much more than just advertising or selling. For example, a major part of marketing involves researching your customers: What do they want? What can they afford? What do they think? Your understanding and application of the answers to such questions play a major role in the success or failure of your business.

What is my market potential?

The principles of determining market share and market potential are the same for all geographic areas. First determine a customer profile (who) and the geographic size of the market (how many). This is the general market potential. Knowing the number and strength of your competitors (and then estimating the share of business you will take from them) will give you the market potential specific to your enterprise.

What about advertising?

Your business growth will be influenced by how well you plan and execute an advertising program. As it is one of the main creators of your business' image, it must be well planned and well budgeted. Contact local advertising agencies or a local SBA office to assist you in devising an effective advertising strategy.

How do I set price levels?

The price of a service or item is based on three basic production costs: direct materials, labor, and overhead. After these costs are determined, a price is then selected that will be both profitable and competitive. As pricing can be a complicated process, you may wish to seek help from an expert.

Are some locations better than others?

Time and effort devoted to selecting where to locate your business can mean the difference between success and failure. The kind of business you are in, the potential market, availability of employees, and the number of competitive establishments all determine where you should put your business.

Is it better to lease or buy the store (plant) and equipment?

This is a good question and needs to be considered carefully. Leasing does not tie up your cash; a disadvantage is that the item then has no resale or salvage value since you do not own it. Careful weighing of alternatives and a cost analysis will help you make the best decision.

How do I find out about suppliers/manufacturers/distributors?

Most suppliers want new accounts. A prime source for finding suppliers is the Thomas Register, which lists manufacturers by categories and geographic area. Most libraries have a directory of manufacturers listed by state. If you know the product line manufacturers, a letter or phone call to the companies will get you the local distributor/wholesaler. In some lines, trade shows are good sources of getting suppliers and looking over competing products.

Why do I need a sign for my business?

There are many reasons, the most primary of these being:

• Signs are the most effective, yet least expensive, form of advertising for the small business.
• A sign is your introduction and handshake with those passing by, identifying your business to existing and potential customers.
• Signs are always on the job for you, advertising 24 hours a day, 365 days a year.
• People often judge a business by how it looks on the sign.
• Many merchants increase their business measurably just by adding a good sign. Conversely, many have gone out of business because they simply were not identified well, so not enough potential customers knew of their existence. As one sign industry professional put it, "A business without a sign is a sign of no business."
• We live in a mobile society. According to the United States Census Bureau, 18% of households relocate each year. As your customers move, you need to replace them by attracting new customers

Is signage expensive?

Signage is the least expensive, yet most effective, form of advertising for independent and national retail businesses.

• You pay for the sign once and it works for you 24 hours a day, 7 days a week for years. Use of other media requires paying month after month and you never have the benefit of ownership. You also have no assurance that you're reaching potential customers.
• From a business owner's perspective, a sign should not be viewed as an expense, but as a capital investment. When you factor in your return on investment, signs are not expensive. An effective sign will most likely pay for itself many times over.
• The price for signage will vary greatly depending upon the size, design, style, manufacturer, and mounting type.

How do I go about obtaining a UPC Bar Code for a product I am manufacturing?

In order for you to be able to print UPC bar code symbols, you will need to become a member of the Uniform Code Council, Inc. (UCC). Once a member, you will be assigned an identification number that will be specific for your company only. To learn more about obtaining a UPC bar code symbol visit the Uniform Code Council, Inc. web site.

I am interested in making my first big sale to a customer that I don't know much about, and therefore I am worried about whether or not I am going to get paid on time. Where can I go to find out more about a company's credit worthiness?

Try Dunn and Bradstreet's Small Business Solutions. DandB Small Business Solutions gives you easy access to a suite of online tools and services that will help you make better informed credit decisions, find new customers, monitor your competition, and more.

What are the advantages and disadvantages of Yellow Pages advertising?

Advantages of Yellow Pages advertising:

• One ad works all year long.
• It gives your prospect a method of easily locating and contacting your business, even if they didn't initially know your name.
• It can help you describe the differences between you and your competition.
• You pay by the month instead of one large payment.

Disadvantages of Yellow Pages advertising:

• You must commit to an entire year of advertising.
• You are immediately placed with a group of your competitors, making it easy for the prospect to comparison shop.
• Some classifications are so cluttered with advertising that your ad becomes buried and ineffective.
• It is only effective when a prospect looks you up in the correct classification, assuming the prospect knows what classification to look for in the first place.

How can I determine if Yellow Pages advertising will benefit my business?

Probably the easiest way to determine whether or not Yellow Pages advertising is effective for your particular business is to look in the Yellow Pages under your business category and observe the types of ads that your competitors are taking out. If you see a lot of ads (and especially big and expensive ads), you can assume that these businesses are making this type of investment because it has paid off for them. If you don't have any competitors in your particular market, refer to the Yellow Pages in another community close by or in another geographic area similar in make up to yours.

What exactly is specialty advertising?

Specialty advertising basically consists of giveaways - the pencils, pens, buttons, calendars, and refrigerator magnets you see everyday - are called specialty advertising in the trade. Chances are, you have some specialty advertising items right at your desk. Businesses imprint their name on items and give them away (or sometimes sell them at very low cost) in order that:

• You notice their name enough times on the item to build top of the mind awareness, so when you need a restaurant, for instance, you think of their name first.
• You appreciate the goodwill of the company giving you the item and eventually return the favor by giving them some business.

My business associate suggested that I use outdoor advertising. We don't have many billboards in our community, so why should I consider outdoor advertising?

When people think of outdoor advertising, they usually think of the colorful billboards along our streets and highways. Included in the outdoor classification, however, are benches, posters, signs, and transit advertising (the advertising on buses, subways, taxicabs, and trains). They all share similar advertising rules and methods. Outdoor advertising reaches its audience as an element of the environment. Unlike newspaper, radio, or TV, it doesn't need to be invited into the home, and it doesn't provide entertainment to sustain its audience. Here are some reasons why businesses use outdoor advertising:

• Since it is in the public domain, outdoor advertising assuredly reaches its audience. People can't switch it off or throw it out. People are exposed to it whether they like it or not. In this sense, outdoor advertising truly has a captured audience.
• Its messages work on the advertising principle of frequency. Since most messages stay in the same place for a period of a month or more, people who drive by or walk past see the same message a number of times.
• Particular locations can be acquired for certain purposes. A billboard located a block in front of your business can direct people to your showroom, or you can reach rural areas efficiently by placing it billboard in each small town.
• Outdoor advertising is an excellent adjunct to other types of advertising you are doing. In fact, it is most effective when coupled with other media.

What is co-op advertising

A relatively unknown form of advertising, co-op is a cost-sharing arrangement in which manufacturers and suppliers provide financial assistance for customers' advertising programs. It can often make the difference in whether or not a small business can afford to advertise at all. Co-op advertising works in a number of ways. For example, a retailer can buy goods from a manufacturer and accrue co-op funds based on the amount of purchase. Those funds can be returned in the form of a cash rebate, a credit to the retailer's account, or in products. In case you're thinking your firm is too specialized to take advantage of co-op advertising, you may want to reconsider. The Co-op Handbook, published twice a year by the Yellow Pages Publishers Association (YPPA), contains thousands upon thousands of co-op program listings. Indexed by brand name and company, each listing provides the company name, the type of plan it offers, whether mention of competitors is allowed, and the type and size of ads required.