Entrepreneurship: 5 ways to determine your business position in the market
For small and medium enterprises (SMEs) the importance of knowing your position in the market can never be emphasised enough, says Futhi Cabe, WesBank head of the SME segment.
"Proper positioning gives meaning to the strategic direction of your business and provides insights on how to succeed," explains Cabe.
A strong business obtains and keeps customers, but this can be difficult to do when not in a position that makes it easy for customers to access your products and services. Your position in the market forms a critical part of a marketing plan.
Useful questions to better understand your position in the market:
- Who are your competitors: new or old, big or small?
- What are the strengths and weaknesses of each of the identified competitors and how does your business compare?
- Who has what share in the market and where do you fit in?
- What characterises this business you are in? Is it high value or commodity? Where are you in your growth curve?
- Who are your main customers and how do they buy?
Once you have a better understanding of your business’s position in the market, there are some important aspects to consider.
Marketing is everyone’s job
Each staff member contributes in some way to your business's acquisition and retention of customers. Everyone should have an appreciation of what the process of marketing involves and how it applies to your business.
Generate marketable products or services
Have products, services, concepts or ideas that you screen and test to ensure they actually satisfy customer needs and are potentially profitable.
Profile your competition
Gather as much information as you can on their marketing and communication strategies. Identify any gaps in the market that they are not filling and exploit these to the full.
Analyse market opportunities
This analysis should include your current and future market size, growth potential and key players.
Remember that research indicates approximately 75% of small business customers come from within an 8km radius of the business.
Assemble information about your business’s current and potential markets, the users of your products and services, and about those areas where your business has a significant competitive advantage.
Target your market
Having analysed the market and gathered information on the skills and resources of your business, you are now in a position to select specific target markets.
Publicise your products or services
Develop an appropriate strategy for advertising and promoting your products, sales campaigns and distribution channels. Be clear about the channels of distribution that talk to your position in the market and in keeping with the needs of your customers.
Review your performance regularly
Unless you monitor your position in the market regularly, you will run the risk of not finding out until too late that you have been left behind.
Check sales results constantly and ensure set targets are being achieved. Read the market and respond accordingly.