Small & Medium Enterprises in Uganda account for approximately 90 per cent of the entire private sector, over 80 per cent of manufactured out-put, contribute 75 per cent of the Gross Domestic Product (GDP) and employ about 2.5m people. (Fortune of Africa). It has also been observed that many SMEs start-up but 20 per cent fail in their first year while about 50% of small enterprises fail in their fifth year.
The number of reasons they fail are numerous but it’s important to think about planning around the marketing which is often inaccurately used synonymously with sales.
Marketing in the simplest of terms is ‘putting the right product in the right place, at the right price, at the right time.’ This is, however, not as simple as it sounds. It takes a lot of planning to ensure none of elements is off the mark. A great product or service can fail completely and end up costing the company substantially. As such, the 4Ps (Product, Price, Promotion & Place) are the heart of any marketing plan.
Product refers to either a tangible good or an intangible service that meets a specific customer need or demand.
Understanding the need your product is attempting to respond to is crucial. This will help in the identification of potential consumers of the product and the benefits communicated to the customers.
Once you have the product, you must think about how to price it as this will directly affect how it sells. This is linked to what the perceived value of the product is to the customer rather than an objective costing of the product on offer. If a product is priced higher or lower than its perceived value, then it will not sell. It is, therefore, important to understand how a customer sees what you are selling. But Price can also be influenced by competitor pricing, how you intend to distribute and other costs.
How you communicate for example, through advertising, public relations, sales offers are highly dependent on the product. If your product is targeting market women, putting communication on social media may not be wise. So, think of promotion as the communication aspect of the entire marketing function.
The final piece has to do with how your product will be provided to the customer and this is where distribution plays a major role. You will need a carefully thought through placement strategy to determine the channel most suited to a product. How a product is accessed by the end-user also needs to compliment the rest of the product strategy.
It is the careful use of a balanced marketing mix that makes it possible for one business to stand out and create a clear position in the market. But it must all start with an understanding that marketing is not sales.
The writer is the marketing logistics officer at dfcu bank.