Welcome back! It’s the start of a new month, so we’ll be shifting our focus from financial planning to entrepreneurship. Every month we have a new topic. If you want to read more about financial planning – how to obtain a loan or a mortgage and how to create a strong personal budget - you can find these topics on our blog. Check back with us every week because we’ll post a new article.
The process of becoming an entrepreneur requires skill and research. First you need a concept for a product and the marketplace is full of potential. There are no boundaries – identify the concept for your product and apply your creativity to bring this concept to life. You’re not alone in this process.
There are financial and psychological benefits when taking on the role of an entrepreneur. The financial aspect gives you the opportunity to determine how much you earn and how much should be reinvested in your organization. The psychological benefits come from giving back to communities through job creation, sponsoring events, and partnering with organizations that help impoverished communities.
Finding Your Niche
One way to become an entrepreneur focuses on solving every day problems. Create a list of problems that need to be solved and build a list of processes that could be simplified for the consumer. How will your product meet the needs of consumers? Is your solution an entirely new idea or does it enhance the effectiveness of an existing product?
After you create a product profile, you need to focus on market research. Your product should meet the needs of your target audience, so you need to identify why customers like your product as well as how competitors pose a threat to your company. You can use these findings to build a new business and to update the effectiveness of your existing plan that utilizes branding and positioning. We’ll define those essential tools later in this article.
Market research is important because an entrepreneur needs to ask the right questions, to the right people, in the right way to determine demand for their products. There are companies that analyze markets to determine the strengths, weaknesses, opportunities and threats to your to product. Market research demonstrates how to reach target audiences, how to beat competitors, and how to price your product.
A market gap gives insight into a market segment whose needs are not being met. A market gap analyzes the difference between supply and demand. One company that filled a market gap is Netflix. They filled the need for a mail-order business for movies. They bankrupted Blockbuster Video by providing a new means for obtaining movies. Netflix focused on tailoring their service to meet the needs of consumers who wanted a convenient and cost-effective way to rent movies.
Market Trends
Entrepreneurs need to determine the needs of their audience and deliver content through the most effective communication channels that include radio, social media, and television. Marketing trends analyze the behaviors of products influenced by quality, pricing, competition, and changing consumer preferences. Monitor these fluctuations and develop strategies for successful outcomes.
Here are two examples of trends: different sizes of glasses and bellbottom jeans. How do you keep up with trends? Learn as much as possible about your industry by reading trade publications, following influential bloggers, monitoring business benchmarks, and observing the competition. These market trends will determine where you should apply money earmarked for researching and advertising.
When developing a product, entrepreneurs need to focus on branding and positioning. Branding creates a distinct product identity. Branding consists of these characteristics: brand identity, brand image, brand culture and brand awareness. These elements need to clarify the personality of your product in order to appeal to your demographics.
Branding
Branding has been around for thousands of years. Craftsmen would imprint symbols onto their products to demonstrate their origins. Ancient civilizations knew the importance of signifying the unique qualities of their products. The goal of branding – both now and then - is to establish a bond of trust between producers and their consumers by selling a consistent product. The ultimate goal is to establish market leadership. This is an objective for entrepreneurs.
A brand addresses seven key concepts: (1) research your target audience; (2) determine your focus and personality; (3) choose your business name; (4) create your slogan; (5) design your logo; (6) choose the look of your brand; (7) demonstrate what your brand represents.
Some companies have a mission statement that outlines the company credo. Here is an example from Johnson & Johnson the producer of Tylenol: “We strive to improve access and affordability, create healthier communities, and put a healthy mind, body and environment within reach of everyone, everywhere.” This demonstrates the personality of the organization and their benchmarks that further define the brand focus.
Positioning
The general approach when positioning a product is not to introduce something new into the mind of the prospect, but to skillfully control what already exists in the mind of the target audience. Positioning demonstrates how your product differs from the competition. Consumers are inundated with advertisements for similar products, so entrepreneurs should look for market niches. This involves market research and a comparative casebook analysis.
There are different types of brand positioning. One type is problem and solution positioning that focuses on the resolution of a market need. Netflix is a good example. Another type is benefit positioning that addresses the unique benefits that consumers can obtain only from your product. Antibacterial soaps such as Dove are an example. Lastly, quality-based positioning highlights the superior value of a product. Land Rover led the way for luxury SUVs. These are samples of brand positioning.
To protect their brand and positioning, entrepreneurs must analyze the strengths, weaknesses, opportunities, and threats related to their product. The marketplace is dynamic. After a product is introduced into the marketplace, environments will change because of the competition, economy fluctuations, consumer trends and internal environments.
To be a successful entrepreneur, you need to be agile enough to learn and adept to new methods, processes, and technologies in order to make your product viable in the eyes of consumers. Build your skill set, understand your market, and secure the branding and positioning of your product thorough market research. This will lead to positive outcomes for a new organization.