Choosing the right marketing weapon

Rifle or shotgun - which is the better marketing approach? The question leads to a long standing arguments in business.

A shotgun shots a number of small bullets with the hope that at least some of them hit the target. In the same way, 'shotgun marketing' involves reaching as many people as you can, such as mass marketing through TV, Cable, radio and the web without a particular end-target in mind.   

On the other hand, a rifle brings things into focus, takes a careful aim, and then only you pull the trigger. 'Rifle marketing', thus, typically involves selecting target audience based on their demonstrated interest.

So, which weapon you want to choose? Both the approaches have their benefits, but it seems that the rifle approach is the better one for the resource-challenged Small and Medium Enterprises (SMEs).

In today's diverse market, it is not possible for a SME to serve all buyers in the entire market even for specific product or service category. The reason is simple: buyers today are too numerous, too widely spread, with too different needs. Therefore, rather than competing in an entire market, SMEs should identify small parts of the market that they can serve in a more meaningful way.

Historically speaking, the target market approach has never been popular with Indian businesses. They have, over the years, engaged in mass marketing to produce a single product on a mass scale and distribute and promote the product on a mass level. But with the changing scenario of the market, marketers today need a 'rifle approach' to identify different sub-markets, select one or more of them, and put a concentrated effort in them.

Now, the question is how can we segment a market and on what basis. There is no single way to segment a market. It depends on the firm which is marketing its products; it has to find out different segmentation variables and choose the best one to address the specific condition of the target market. Another important point is that the strategy of market segmentation differs depending on whether a business is dealing with consumer market or business market.

Firms dealing with end consumers, usually the following bases are used in segmenting customers: 

• Geography: The market is divided on the basis of location which may be of any level, like urban, hills or plains, climate, etc. The reason behind such segmentation method is  that people who live in the same area usually share some similar needs and wants.
• Demography: In this type of segmentation, bases such as age group, family size, gender, occupation, education, religion, race, social class are considered. With most companies, this is the most preferred method as consumer wants and preferences are, often highly associated with their demographic characteristics.
• Physiography: Consumers do not buy products purely on the demographic variables. Therefore, marketers need to go beyond demographic attributes and engage in psychological segmentation, which involve examining attributes such as personality, and lifestyles of the target customers. A combination of demographic and physiographic segmentation often results great. 
• Behaviour: While using this base, customers are segmented based on their knowledge, attitude towards use of or response to a product. Consumers, in this method, can be segmented as light user, medium user or heavy user, positive, indifferent or negative, etc.    

In addition to the above, a firm can use different segmentation variables like sociocultural variables, use-related characteristics, use-situation factors, benefits sought, etc. for segmenting a market.

Business marketers, can use many of the same variables in segmenting the consumer markets. However, it is important to go for some specific segmentation approaches for business markets, such as:

• Customer type: Business markets can be segmented based on the end users. For example, a small business manufacturing electric motors may have a broad customer base in industries like automobiles, departmental stores, etc. But the firm will do better if it chooses the most potential segments from them and concentrating marketing efforts for customers from those segments. 
• Customer size: Business customer can be divided as per their size of business. For example, a SME selling iron casting products can mark large and reputed companies as major accounts while small customers can be be grouped under minor accounts. According, different strategies and different level of efforts can be put to handle these different groups of customer.
• Type of buying: Also, a firm can divide its business customers based on the type of buying exhibited by its customers. Buying situations differ from customer to customer. Situations like new buy, modified rebuy, and straight rebuy are different from each other in a significant way. A better understanding of these buying situations can help a firm significantly to prepare their strategy more efficiently.    

Thus, a product market for a firm, both dealing with end consumers or business customers, can be divided into various markets or segments. But still after that most small and medium businesses find such segments large enough to serve effectively. In such situation, niche marketing could be a better approach for them to sub-group the market segments further.

Niche marketing is marketing strategy where a marketer targets a smaller sub-segment within a market segment. In other words, this approach is more focussed - marketers tailor their products as per the needs of a small group of customers but, at the same time, they do not customize their offers to each, individual customer.

The niche marketing strategy, which is ideal for a SMEs to survive in a market populated with strong and big industry players, is based on a narrow competitive scope. It means a market niche is chosen where customers have distinct preferences and a competitive advantage can be achieved by optimizing strategy for the target segments. For example, a firm can seek a cost advantage in the target segment or it may look for differentiation in the target segment. 

Whether it is segment marketing or niche marketing, a modern day business enterprise must bring differentiation and focus to stay ahead of competitors at least in some aspects; it must be unique in the industry in one way or another; it must have a focussed area to concentrate. Small players can hardly imagine of changing the rule of the game, so they must play smart with the right marketing weapon.

Beat Competition, Stay Ahead

I have observed that most Small and Medium Enterprises (SMEs) waste their time thinking about what they did last week, month or year when they should instead be thinking about what they need to do tomorrow. My advice for these SMEs would be: instead of spending valuable hours analyzing results, put your energy into developing future market strategies, and in identifying how you can position your business as a market leader. 

I believe that before you decide that you want to be the best in your domain, it is of utmost importance to look into your strategies and ask yourself whether the tactics you are applying are focused on dealing with competitors' actions or not. Unless you do so, your profits and your standing in the market will remain stagnant. 

Cliched though it might seem, and as all management gurus will reiterate, I strongly believe that any business has to satisfy its customers, earn their satisfaction and loyalty, and subsequently achieve the maximum share of its target market on its way to the top. 

However, it is easier said than done. Market capturing process is however not easy since your competitors too will not sit idle as you work on your strategies, just to see you capturing the market. And even if you are able to climb to the No 1 position, the game will continue, which is why your planning needs to continue to maintain the top position. 

To keep one's business ahead of competition, one needs to develop marketing strategies smartly. Certain activities in businesses including competitive pricing, promotional strategies, advertising, quality consciousness, innovation, after-sales service, distribution network and sales force, etc. need to be focused on to beat one's competitors.

Ideally, I have seen several SMEs cutting costs and trimming corners to maximise their gains without even thinking that doing so weakens one's ability to execute and thus eliminates resources to do new things. Smarter companies on the other hand, recognize the opportunity to pounce on customers and take away business during weak market dynamics.

If you always do what you have always been doing, then you will end up doing nothing new. So pull up your socks and don’t just do what you want to do. Take stern actions intended to hurt your competitors. Because that's not just one of the many options you have...it's the only option to take you to the top.

Branding - success mantra for every business

Branding today is the success mantra for every business, and particularly for SMEs. There is no doubt whatsoever that an effective brand name, combined with a well known corporate image, usually allows a company to charge more for its products and thus increase its profit margins. No one can deny the fact that a brand value reflects how a product's name, or company name, is perceived by the marketplace.

Companies often err in their thinking when they presume that branding is not very important for old businesses and only rookies need to worry about it. In reality, branding is equally important for both newbies and established businesses as corporate branding strategies will significantly help a company in creating a highly effective and well-established corporate identity.

Contrary to what SMEs usually think, branding is not about getting one's target market to choose oneself over competition. Branding for SMEs should actually be about getting one's prospective clients to view the SME as the only solution provider to its problems.

I believe that for a SME to succeed in branding it must understand the needs of its customers and prospects and this can easily be done by integrating one's branding strategies through those of the company at every point of public contact.

In actuality, the experiences and perceptions of buyers and future prospects of the brand you are offering is what makes it a success. SMEs should understand that a good brand will deliver the message you want to convey clearly and thus confirm your credibility. A good branding strategy will also connect your target prospects emotionally and will motivate the buyer and thus cement user loyalty for future deals.

Lost in the crowd? Get yourself an effective branding strategy. This is what the doctor will prescribe for a growing SME. As the battle for customers intensifies day by day, a strong brand can work wonders. It is thus very important for SMEs to spend time in researching, defining, and building one's brand. SMEs need to take brand building seriously owing to the fact that ultimately it is the brand that is the source of a promise to one's customers. Branding is the foremost level of marketing for a company and one you cannot do without –right?

How Business Savvy Are You?

The first step to success is knowing what goods are lying where and for how long

IF YOU ARE A BUSINESS owner, having a system in place for counting and maintaining inventory or stock is essential for the success of your business. Managing inventory well will bring higher returns on investment and more customer satisfaction.

Stock Just The Right Amount

Too Little: Having inventory can make you lose sales and customers to your competitors. Also, keep in mind unexpected orders. Suppose you have many small customers, and a few large ones that account for say 40% of your sales. What happens if the one of the latter wants to buy up a large chunk of your stock? Logic would say that always accommodate the large customer, but you cannot afford to displease the smaller buyers.

Therefore, don't take chance in an effort to minimize investment in stock

To Much: The more inventory you have means the more money you will spend on overhead costs, loans, insurance, etc. So, analyze your needs, keep a record of the entire range of goods including reorder points storage space required and item location. Take into consideration shelf life of perishable goods, and seasonal and festive demand. And as for predicting requirements of large customers, the best way is to be aware of their consumption patterns and business model.

Follow the 80/20 Rule

About 20% of the items you sell will provide about 80% of your profit, because they sell the most. It's a fact that less expensive items often sell faster and need to be replaced more often sell faster and need to be replaced more often. For instance, when you sell ten items that cost Rs. 5 as often as a single item that costs Rs 5 as often as a single item that costs Rs. 50, you will have made sales of Rs. 50 with the Rs. 5 items. So, keep these fast-selling products at the top of your re-ordering list. And invest 80% of your funds in these items.

Keep Track of Time

Turnaround Time: This is a major consideration when maintaining inventory. Not all products sell at the same rate. So, knowing which products move quickly and which ones more slowly will go a long way towards helping you achieve a balanced inventory. Follow the simple technique of noting the date of purchase and order quantity every time it is replenished, to get a snapshot of turnaround time for each time.

Lead time: It is the time between reordering and the actual receipt of goods. Order Processing, order filling, and transportation usually take place during this time, which could be days, weeks, or months, depending on your supplier. It is therefore critical to be aware of manufacturers production cycles and last order dates, location of your suppliers good owns, and even stock positions of your competitors if possible.

Safety margin: As a precaution, order extra quantities to reduce chances of a shortage, or order a few days earlier. Having reserve stock can come in handy.

Consider cost of inventory

Inventory is often the single most significant asset; it is expensive and has to be managed carefully, else you may lose money. Cost of inventory involves rent, maintenance, insurance, finance cost, pilferage and damage, and even value of stock that may never be sold. These costs when added up, erode profits.

Pilferage and damage percentages are always greater when there too much inventory. It's much easier for theft to go unnoticed when there too much stuff, and breakages and damages are more likely to happen.

When there excess inventory, markdowns (distress discounting) are always higher, because excess inventory invariably slows the rate of sale of everything. The longer merchandise remains unsold, the greater the markdowns that will be necessary to move it through.

Minimize chances of pilferage and breakage by installing a good lighting system in the godown. A CCTV system would act as a deterrent too. Fix narrow and wide shelves according to product categories, label the shelves, and also number them. This will enable you to access items quickly, plus keep a check on their movement.

Inventory accounting: LIFO, FIFO, WAC Keeping inventory means that when you add or remove items from your stock, you will have made a note of it. Here are the most commonly used methods for inventory accounting.

LIFO (Last In First Out): In this, you will sell the most recently purchased inventory first. Suppose you purchased five units for Rs 10 each last month, and five more units for Rs 12 each this month. Using LIFO, Rs 12 would be the rate assigned to each item taken out of inventory until all the five recently purchased are gone. For each item sold after that, Rs 10 would be recorded.

FIFO (First In First Out): In this, you will sell the goods you receive first. Using the example above, you would record the Rs 10 items before the Rs 12 items. This means the value of your inventory is at its most recent price. FIFO is usually used during periods of relatively low inflation.

WAC (Weighted Average Cost): In this method, each time new inventory is added, the average cost of the items is recalculated. In the example above, the average cost of the ten items would be Rs 11 after the month's purchase was made. Now each item taken out of inventory would be recorded as costing Rs 11.

Get Tech Savvy

Having an active inventory record will help to move your business forward. It's a good idea to invest in an inventory management software that controls accounts receivables, accounts payables, inventory and general ledger. The basic idea is to improve the speed with which you turn your goods into receivables, and receivables into cash.

You should also consider bar coding all your products. A bar code system allows items to be scanned at the sales counter and speeds up the transaction process, and also automatically updates the inventory records when products are sold or purchased. This increases the efficiency or your business

SAP Business One The only software you require to run your business know more

Advantages and Disadvantages of ERP - Enterpriese Resource Planning

Advantages of ERP Systems
There are many advantages of implementing an EPR system. Few of them are listed below:

• A perfectly integrated system chaining all the functional areas together
• The capability to streamline different organizational processes and workflows
• The ability to effortlessly communicate information across various departments.
• Improved efficiency, performance and productivity levels
• Enhanced tracking and forecasting
• Improved customer service and satisfaction

Disadvantages of ERP Systems
While advantages usually outweigh disadvantages for most organizations implementing an ERP system, here are some of the most common obstacles experienced:

• The scope of customization is limited in several circumstances
• The present business processes have to be rethought to make them synchronize with the ERP
• ERP systems can be extremely expensive to implement
• There could be lack of continuous technical support
• ERP systems may be too rigid for specific organizations that are either new or want to move in a new direction in the near future

Simple Fact: -

STD Code of Hyderabad, India is 040

Implementation of Enterprise Resource Planning

Implementing an ERP system in an organization is an extremely complex process. It takes lot of systematic planning, expert consultation and well structured approach. Due to its extensive scope it may even take years to implement in a large organization. Implementing an ERP system will eventually necessitate significant changes on staff and work processes. While it may seem practical for an in-house IT administration to head the project, it is commonly advised that special ERP implementation experts be consulted, since they are specially trained in deploying these kinds of systems.
Organizations generally use ERP vendors or consulting companies to implement their customized ERP system. There are three types of professional services that are provided when implementing an ERP system, they are Consulting, Customization and Support.

• Consulting Services - are responsible for the initial stages of ERP implementation where they help an organization go live with their new system, with product training, workflow, improve ERP's use in the specific organization, etc.
• Customization Services - work by extending the use of the new ERP system or changing its use by creating customized interfaces and/or underlying application code. While ERP systems are made for many core routines, there are still some needs that need to be built or customized for a particular organization.
• Support Services - include both support and maintenance of ERP systems. For instance, trouble shooting and assistance with ERP issues.

ERP implementation process goes through five major stages which are Structured Planning, Process Assessment, Data Compilation & Cleanup, Education & Testing and Usage & Evaluation.

• Structured Planning: is the foremost and the most crucial stage where an capable project team is selected, present business processes are studied, information flow within and outside the organization is scrutinized, vital objectives are set and a comprehensive implementation plan is formulated.
• Process Assessment: is the next important stage where the prospective software capabilities are examined, manual business processes are recognized and standard working procedures are constructed.
• Data Compilation & Cleanup: helps in identifying data which is to be converted and the new information that would be needed. The compiled data is then analyzed for accuracy and completeness, throwing away the worthless/unwanted information.
• Education & Testing: aids in proofing the system and educating the users with ERP mechanisms. The complete database is tested and verified by the project team using multiple testing methods and processes. A broad in-house training is held where all the concerned users are oriented with the functioning of the new ERP system.
• Usage & Evaluation: is the final and an ongoing stage for the ERP. The lately implemented ERP is deployed live within the organization and is regularly checked by the project team for any flaw or error detection.

Simple Fact: -

Climate is Tropical and Dry in Hyderabad, India.

ERP System Improves Productivity, Speed and Performance

Prior to evolution of the ERP model, each department in an enterprise had their own isolated software application which did not interface with any other system. Such isolated framework could not synchronize the inter-department processes and hence hampered the productivity, speed and performance of the overall organization. These led to issues such as incompatible exchange standards, lack of synchronization, incomplete understanding of the enterprise functioning, unproductive decisions and many more.
For example: The financials could not coordinate with the procurement team to plan out purchases as per the availability of money.
Hence, deploying a comprehensive ERP system across an organization leads to performance increase, workflow synchronization, standardized information exchange formats, complete overview of the enterprise functioning, global decision optimization, speed enhancement and much more.

Simple Facts: -

Altitute of Hyderabad, India is 536 Meters

Ideal ERP - Enterprise Resource Planning System

An ERP system would qualify as the best model for enterprise wide solution architecture, if it chains all the below organizational processes together with a central database repository and a fused computing platform.

• Manufacturing: - Engineering, resource & capacity planning, material planning, workflow management, shop floor management, quality control, bills of material, manufacturing process, etc.
• Financials: - Accounts payable, accounts receivable, fixed assets, general ledger, cash management, and billing (contract/service)
• Human Resources: - Recruitment, benefits, compensations, training, payroll, time and attendance, labour rules, people management
• Supply Chain Management: - Inventory management, supply chain planning, supplier scheduling, claim processing, sales order administration, procurement planning, transportation and distribution
• Projects: -Costing, billing, activity management, time and expense
• Customer Relationship Management: - Sales and marketing, service, commissions, customer contact and after sales support
• Data Warehouse: - Generally, this is an information storehouse that can be accessed by organizations, customers, suppliers and employees for their learning and orientation

Simple Facts: -

Hyderabad, India area is 217 Sq Km

Integration is Key to ERP - Enterprise Resource Planning System

Integration is an exceptionally significant ingredient to ERP systems. The integration between business processes helps develop communication and information distribution, leading to remarkable increase in productivity, speed and performance.
The key objective of an ERP system is to integrate information and processes from all functional divisions of an organization and merge it for effortless access and structured workflow. The integration is typically accomplished by constructing a single database repository that communicates with multiple software applications providing different divisions of an organization with various business statistics and information.
Although the perfect configuration would be a single ERP system for an entire organization, but many organizations usually deploy a single functional system and slowly interface it with other functional divisions.

Simple Fact: -

Hyderabad, India is also known as "City of Pearls"

What is ERP - Enterprise Resource Planning

ERP, which is an abbreviation for Enterprise Resource Planning, is principally an integration of business management practices and modern technology. Information Technology (IT) integrates with the core business processes of a corporate house to streamline and accomplish specific business objectives. Consequently, ERP is an amalgamation of three most important components; Business Management Practices, Information Technology and Specific Business Objectives.
In simpler words, an ERP is a massive software architecture that supports the streaming and distribution of geographically scattered enterprise wide information across all the functional units of a business house. It provides the business management executives with a comprehensive overview of the complete business execution which in turn influences their decisions in a productive way. At the core of ERP is a well managed centralized data repository which acquires information from and supply information into the fragmented applications operating on a universal computing platform.
Information in business organizations is accumulated on various servers across many functional units and sometimes separated by geographical boundaries. Such information islands can possibly service individual organizational units but fail to enhance enterprise wide performance, speed and competence.
The term ERP originally referred to the way a large organization planned to use its organizational wide resources. Formerly, ERP systems were used in larger and more industrial types of companies. However, the use of ERP has changed radically over a period of few years. Today the term can be applied to any type of company, operating in any kind of field and of any magnitude.
Today's ERP software architecture can possibly envelop a broad range of enterprise wide functions and integrate them into a single unified database repository. For instance, functions such as Human Resources, Supply Chain Management, Customer Relationship Management, Finance, Manufacturing Warehouse Management and Logistics were all previously stand alone software applications, generally housed with their own applications, database and network, but today, they can all work under a single umbrella - the ERP architecture.
In order for a software system to be considered ERP, it must provide a business with wide collection of functionalities supported by features like flexibility, modularity & openness, widespread, finest business processes and global focus.

Simple Facts: -

Hyderabad, Capital of Andhra Pradesh, India.