Business Fundamentals

Last Updated: 2 weeks ago by BrodNeil

This section is dedicated to small businesses and startups. May these ideas inspire you to pursue digital marketing and achieve your goals.

Is This for Me? You Might Ask

• This might be for you if you run a small business or startup.
• If you believe digital marketing can help, this might be for you.
• This is precisely for you if you are on a tight budget yet willing to learn to do it yourself.

There is a learning curve involved in this process, which is dependent on your background and level of motivation. It’s important to note that this won’t be a quick fix, but it will be worth it.

However — because this section is built for small businesses or startups with limited resources: time, workforce, and budget — I would like to make each lesson as short as possible.

As a small business owner, I found some points to be particularly important.

Understanding the Foundations of Business Success

Target Audience

In any business strategy, it is crucial to define the target audience. Understanding your customers’ needs, preferences, and behaviors allows for tailored marketing efforts and product development.

Unique Value Proposition (UVP)

Crafting a Unique Value Proposition (UVP) is equally crucial. A UVP is a brief statement that emphasizes what makes your product or service distinctive from competitors. A well-crafted UVP not only encapsulates the essence of your offering but also communicates its value to your target audience. This helps set your brand apart in a crowded marketplace.

Stages of Marketing

Mastering marketing stages is vital for impactful business growth in a competitive landscape with brief attention spans. Progressing from awareness to advocacy is key to driving success.

Branding

Branding is the bedrock of business success, defining unique identities that resonate with consumers. Explore the pivotal role of branding in shaping business outcomes and unravel a captivating case study on brand excellence in real estate marketing strategies.

Planning and Implementation

I assume everyone who wants to start a business has a plan. We all know the importance of planning. However, we also know that not all plans may succeed.

Because of this, we want to focus on a business plan that has practical considerations and is primarily focused on implementing and managing the direction of the business. This is also known as strategic planning.

Strategic planning is action-oriented with a clear objective of the desired outcome. For what is planning then, without any implementation?

You may have heard the phrase: plan your work and work your plan. In brief, this is exactly what we mean by strategic planning.

Here is a link that may be worth your time: Business Fundamentals Mastery

Financial Planning and Budget

Though financial planning and budgeting would have been part of strategic planning — I’ve had it here as a separate subheading to stress its importance. This is the lifeblood of the business. And with that, I could not say more about its importance.

When the finances are not in order, the quality of the service is affected. Creativity and enthusiasm can be hindered when the finances are not in order. When finances are not in order, pessimism works at its best.

How to Price a Product

This section covers The Pricing Strategy Matrix and The Van Westendorp Model in the context of setting up an online store efficiently and using pricing science effectively. It discusses demographic-based and dynamic pricing strategies, the Bass Diffusion Model for product adoption, strategies based on consumer behavior, psychological pricing principles, and other effective pricing methods.

The Pricing Strategy Matrix

The Pricing Strategy Matrix categorizes pricing strategies into four main types: premium pricing, penetration pricing, economy pricing, and price skimming.

Premium

Premium pricing involves setting a high price to position the product as high quality.

Penetration

Penetration pricing sets a low initial price to quickly penetrate the market.

Economy

Economy pricing offers products at low prices for cost-conscious consumers.

Skimming

Price skimming sets a high price initially and lowers it over time to attract different customer segments.

The Three Cs of Pricing

Businesses often use the “Three C’s” of pricing:

• Cost (product cost),
• Customers (willingness to pay), and
• Competition (competitors’ prices).

While the Three C’s of pricing provide a framework, real-world pricing considerations can be more complex. Additional factors like value perception, market demand, and pricing strategies also play crucial roles in setting prices effectively.

In practice, this strategy often falls short due to various reasons:

• Costs can fluctuate with raw material availability and production scale.
• Cost-based pricing overlooks the true value offered to customers and ignores intangibles like brand perception and demand.
• Competitors may underprice products to increase market share.
• Customer surveys for pricing can be unreliable; theoretical willingness to pay may differ from actual purchasing behavior.

Therefore, consider a pricing strategy that includes customer behavior, statistics, and demographics. For more details, visit: https://www.ecwid.com/blog/how-to-price-your-products.html

Van Westendorp Pricing Model

The Van Westendorp Pricing Model is a market research technique used to determine the optimal price point for a product or service. It involves asking consumers four pricing-related questions to establish a demand curve and identify the price sensitivity threshold, helping businesses set prices that maximize revenue and profitability.

The four key questions in the Van Westendorp Pricing Model are:

Price Point of Equilibrium (PPE)

At what price would you consider the product to be so inexpensive that you would question its quality?

Point of Marginal Cheapness (PMC)

At what price would you consider the product to be a bargain, but not so cheap that you question its quality?

Point of Marginal Expensiveness (PME)

At what price would you consider the product starting to get expensive, but you would still consider buying it?

Price Point of Indifference (PPI)

At what price would you consider the product to be so expensive that you would not consider buying it?

For a more detailed explanation, refer to this Forbes article.

Weekly Regular Meetings

Weekly regular meetings might sound painstaking. Yet this is what keeps our team on our toes.

I see regular weekly meetings as opportunities:

to set or achieve goals,
to evaluate the team’s performance,
to assess an individual’s well-being and performance,
to provide feedback,
to learn innovative ideas and practical solutions, and lastly
to foster camaraderie.

Characteristics of a Winning Plan

Start small
Start simple
Move fast
Be Frugal
Stay nimble

Your Business Is as Good as You Make Money

Every business is someone else’s baby. But as an entrepreneur, your business is only as good as it could invoice and collect. Everything else outside of that means your business is just an expensive hobby.

This is one of the best business advice I’ve heard.

It doesn’t matter how great you think your business idea is. If the customer is not willing to pay for it, it’s just a fascinating idea.

Source: https://youtu.be/GMa4BCAkd7M

Avoid Losing Your Gains by Knowing How to Use the Fear of Loss

Business Quote

Business Strategy

When the thing you sell has communication built in, when it is remarkable and worth talking about, when it changes the game – marketing seems a lot easier.

Seth Godin
Founder of Akimbo, home of the altMBA

The quote is taken from https://seths.blog/2012/07/the-circles-of-marketing/.

Your Business Is as Good as You Make Money

Every business is someone else’s baby. But as an entrepreneur, your business is only as good as it could invoice and collect. Everything else outside of that means your business is just an expensive hobby.

This is one of the best business advice I’ve heard.

It doesn’t matter how great you think your business idea is; if the customer is not willing to pay for it, it’s just a really interesting idea.

Source: https://youtu.be/GMa4BCAkd7M0

Avoid Losing Your Gains by Knowing How to Use the Fear of Loss

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