Starting a new business? A marketing perspective

At some point of time we always plan to drive our own business initiative but are we prepared or have we analyzed possibilities which might change dynamics is a big question?

I will be talking about it from a marketing perspective which might trigger thoughts or may add value to your business plan.

From a marketing perspective it should always be considered which type of a product are we targeting at? If it’s a product of lower value then brand won’t play much a role from a customer perspective. Creating your individual brand will also be easier.

If you are choosing to enter in a sector where product cost is higher you might to make a bigger investment in terms of getting attached with a bigger brand. This might lead to lesser profit margins and risk of diluting your own identity but in a longer run it’s considered to be much safer preposition. Porters 5 force model also talks about high risk of entering into a market in a form of “threats of new entrants”, one of the major factor is brand equity. In a market where product cost is higher brand equity has to be high, which reduces threat of new entrant ultimately making it a safer preposition.

But it is always recommended to enter in a market which is not capital extensive if you are just starting a business with a constraint on working capital, can be product or service driven. Risk associated by targeting such a segment can be:

• Low switching cost for customers (High threats of new entrants, Impulse purchase decision of customers)

• Continuous product development

Low switching cost for customers makes business venerable and considered as a threat for small players entering in a competitive market. It can be because of customer’s latent needs or because of marketing gimmick created by companies, customers often move from one to another product with similar attributes. This phenomenon is predominant in sector where buying decision of products is not complex (where buying is impulse). It is seen that most of the times switching costs are monetary in nature but there are also other parameters which relates to it as well - psychological, effort based and time based.

Continuous product development plays a critical role in such a segment because of competition available and low switching cost of customers. This might also relate to not just the product development but related aspects as well like marketing campaign, packaging, availability, channel margins etc. It’s a continuous on going process which makes market very dynamic.

Marketing study for any business case plays an important role considering product portfolio which we often miss against financial planning. Though feasibility study always talks about marketing expense but effective planning on plan against cost can do wonders. To sell what, how in the most cost efficient/profitable way is the key.