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Venango - Dan Brockett

 

Market Factors
Why should people choose your business over other options?

There are at least six factors of competition in business:

1) Price - This factor is very often hard to control. It can be difficult for small businesses to compete on price because larger businesses can spread their overhead over more product and can afford to have lower profit margins due to volume. Small businesses can compete on price when they find a unique niche or develop a new technology or process.

2) Product - This includes the quality of the product and consumer desire for the product.

Quality - Businesses need to develop and continually update rigorous quality control measures. Tom Greenlee, owner of the Forest County Sports Center, says that even a hermit has 10 friends that he will tell if he got a bad product.

Consumer Desire - There needs to be a widespread and long-term desire for a product or service. Sometimes products become obsolete because the company has failed to keep up with consumer changes. There are few products that sustain consumer desire for more than a few years. This means that products and services need improved and updated periodically.

3) Convenience - This includes location, usability of product, hours open, parking, time spent by consumer, etc. Drive-through windows, microwave meals, mail-order business and superstores that carry a lot of products are examples of marketing for convenience.

A study done by the University of Michigan points out that consumers between 25 and 45 years of age rank "time" as their number one priority. Businesses marketing their product to this age group should give convenience a high priority.

4) Familiarity - If you were driving in an unfamiliar town and saw two restaurants side-by-side that offered the same menu, which would you choose? Chances are you will choose the restaurant that you recognize the name. We tend to purchase familiar brands of shoes, clothing, computers, etc. It takes a lot of advertising dollars to build widespread familiarity. When trying to build customer familiarity, advertisers should make sure that they have a message that is simple, focused, and repeated often. One of the biggest mistakes made in advertising is saying too much.

5) External Appeal - This includes product packaging, the attractiveness of the store, the "shopping experience," the entertainment experience, etc. External appeal can help consumers have confidence in the company or product and/or it can provide an entertaining shopping experience. Example: One specialty gift shop, Wendall August Forge, has a few highly unusual and expensive gifts for sale along with their main line of products. (They have a crystal vase, hand-cut using a stone wheel, on sale for $75,000.) They do not expect to sell many of these specialty items, but they attract customers who come in to see them.

6) Customer Service - This includes relationships built with customers, as well as salesmanship, education, friendliness, and consumer satisfaction. While most businesses gives some effort to customer service there are relatively few companies that are great at it.

Customer service needs to start from the top of the organization. Companies sometimes hamper their employees' ability to offer great service in various ways:

a) Company policies; ("I'm sorry sir, we can't do that."),

b) Well-intentioned company direction; ("We need to sell, sell, sell by any means necessary!")

c) Faulty organization; ("I need to check with my boss, who will check with his boss, who will check with her boss, who will run it by the accounting department, who will consult with God.")

d) Untrained or undertrained employees. A good salesperson will educate the consumer by answering questions, pointing in the right direction, and helping the consumer solve their problems. Many times, we don't train employees adequately to address customer needs.

Businesses need to place a strong emphasis on customer service. This includes hiring people who are motivated to provide quality service, training all employees to have the ability to give great service, and setting company policy to support great customer service.

Armstrong | Butler | Clarion | Crawford | Erie | Forest | Lawrence | Mercer | Venango | Warren

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This page last updated Monday, April 10, 2006 11:42

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