SPECIALTY STORE FOCUS - Developing a Marketing Program for Your Store

If you own a business, generating profit, of course, is your goal. Your ability to generate profit, however, depends on your ability to identify your customers, meet their needs, and monitor and adapt to their changing needs over time.

To do this, you need a solid and adaptable marketing plan that directs all store policies and activities toward meeting customers’ needs. Without a satisfied customer who returns to do more business at your store and who tells his or her friends about the joys of shopping at your store, your business will wither and eventually die. A good marketing program is critical to the long-term success of your business.

A marketing plan can be broken down into four basic tasks:
• Analyzing customers’ needs
• Analyzing your store’s competitive advantages
• Identifying the market your store will serve
• Determining the correct mix of products, promotion, distribution, and pricing
 

Analyzing Customers’ Needs

Who are your customers? What do they need and want from your store? These may seem like simple questions, but the answers to these questions are critical to your business’s success.

What is the economic situation in your area? Do the products your store offers fit your target market? Have the demographics shifted over time? Market changes and trends can have a big effect on your stores sales and profits.

Evaluate your product line regularly to make sure it’s what customers want. Or ask your current and prospective customers directly what they need and want by creating a questionnaire.

In other words, ongoing market research will help you adapt your business to your customers’ needs and stay on top of your competitors’ strategies.

Analyzing Your Competitive Advantages

What about your competitors? Do they offer goods or services that are attractive to your current or potential customers? What are their strategies? Are competitors leaving the market? If so, how can you attract their customer base? Are new competitors entering the market? If so, how can you protect your customer base?

A good marketing plan has a well-defined strategy that identifies the target markets that its store can serve better than its competitors can. It also tailors the mix of products, promotions, and pricing according to its knowledge about its customers and competitors. Ideally, your marketing strategy will identify customers’ needs that are not being served by the marketplace and determine new ways to meet those needs and hence grow the business. A good marketing plan does not try to be all things to all people. It recognizes limitations and focuses on strengths.

Identifying Your Market

Small businesses have limited funds to spend on marketing. Therefore, it is extremely important to direct your marketing efforts to the market segments that will give you the most bang for your buck.

There are two general ways to segment a market: geographically or by customers.

Geographical segmentation focuses marketing efforts on a specific geographical area. For example, promotions, flyers, and signage are directed to all people who live within a pre-determined distance to the store.

Customer segmentation, on the other hand, does not take such a broad brush approach to marketing efforts. Instead of going after everyone within a particular area, customer segmentation identifies and promotes to those people who are most likely to buy the product. These customers may be identified through the store’s customer data base or from lists based on specific demographic criteria.

Of these two approaches, customer segmentation is more complex and in general more effective. Various computer software programs are available to help you track and sort your customers so that you can promote your products to them more effectively.

Determining the Marketing Mix

Product, price, promotion, and distribution—how you mix and match these elements of your marketing program will ultimately determine your store’s success.

Product. Should you carry a broad or narrow product line? Small stores are usually more successful when they concentrate on a narrow product line. They cannot compete head-to-head with the big box discounters who have the real estate and buying power to control retailing within their geographical areas.
Identify the areas in which the big stores are weak. The big chains may be able to work on a tighter margin because they can move more goods, but they are also confined by the kinds of goods they can buy and sell at a profit. As a small specialty storeowner or manager, you have the freedom to buy creatively. You can purchase and promote goods that your customers would never be able to find in their local discount chain. Because you do not have to commit your store to huge inventories, you can be more flexible and adaptable to customers’ needs—if that ostrich plume hat doesn’t work…no sweat…just find something else that does work.

Promotion. Targeted and effective advertising and promotion are essential to your store’s success. Direct mail is a cost effective way to get your message out. Track your customers. Study what they have purchased in the past and are likely to purchase in the future and target your advertising directly toward them.

Develop attractive and attention-getting signage for your store. Pay attention to the traffic flow within your store and develop your merchandising displays accordingly. Make your store a fun and attractive place where customers want to browse.

And do not forget salesmanship and customer service. Developing and maintaining a high-quality sales staff is a must for any retailer. The public longs for that personal touch, and small specialty stores are in an ideal position to offer it to them.

Pricing. Remember, a small sales volume that generates a profit is better than a large sales volume that does not generate a profit. Develop and experiment with pricing levels until you find that ideal mix between volume and profit. In general, higher prices create lower volume, and lower prices higher volume. Small stores may be able to price their goods higher because they are better adapted to offering that other, more intangible product—personalized customer service.
Distribution. Small retailers must weigh location and traffic flow against cost of real estate when selecting a site for their business. Although a low-traffic, low-cost location may be attractive, you may have to spend more money on advertising to build traffic.

The location of your business is dependent on the product you are selling. For someone selling batteries, location may be less important because the customer is willing to search for and find the business. A small specialty store, however, is more dependent on a high-traffic location because the products are more impulse driven. Most people do not wake up in the morning and say, “I just have to find a store where I can buy an ostrich plume hat.”

Evaluating Your Efforts

It takes time to evaluate whether your marketing program is a success. Even if profits are adequate and the marketing plan is consequently considered a success, you will not know which aspects of the plan were most successful. When you make changes in your plan, for example, change the artwork and message on a direct mail piece, track sales in the following weeks. Learn the sales cycles of your business so you can better determine the best times to advertise more aggressively.

If you remain disciplined and diligent in tracking your marketing activities, over time, you will eventually develop a sales history that is connected to specific areas of your marketing plan. With such information, you will be able to make the adjustments and changes that will maximize your store’s profits. As they say, knowledge equals power.