The Consultant - 2010 - (Page 32)

CONSULTANT’S FORUM Marketing Your Business BY STUART A. MOSS, ACF (MI) A t the beginning of my entrepreneurship class each fall, I ask students, “What is marketing?” Without exception, I get the same two answers— “advertising” and “selling.” While both are part of marketing, describing marketing in this manner is like describing baseball as “swinging a bat.” Marketing is everything involved with executing the sale of a good or service, including the development of the product (or service) itself, pricing strategy, promotional tactics and placement/distribution. These elements are referred to as the “4 P’s” of marketing. Developing a product and then figuring out how to sell it is as relevant to modern business as the cross-cut saw is to modern timber harvesting. COMPETITIVE STRATEGY Unless we have a monopoly, our business operates in a competitive environment. To sell, we must either expand the market or make our sale at the expense of our competition. Since marketing deals with executing a sale, it stands to reason that competitive strategy plays an integral role in marketing. In most industries, “the competition” is comprised of other fi rms offering the same products and services as our own. In forestry consulting, public agencies and industry assistance programs can also be significant sources of competition. Overwhelmingly, however, the biggest source of competition is landowners themselves our customers! The decision is not “Coke or Pepsi?” but “soda or tap water.” Before we worry about losing business to other consultants, we need to get customers to use consulting services in the fi rst place. This is the role of marketing. We must develop a marketing strategy that will convince landowners to drink soda (which costs money) rather than drink tap water (virtually free). Unfortunately, this might be even more difficult. There are three basic competitive strategies: 1) differentiation, 2) niche and 3) price. The goal of a differentiation strategy is to make your product or service stand out from the competition. An often-used strategy is to offer a higher-quality product than the competition. However, there are other (often more effective) means to differentiate your business, which we will discuss later. A niche strategy involves offering a service that no one else offers or finding a geographic area with no competition. Although a very attractive strategy, it is generally not as lucrative as one might expect, especially in the long-term. First, there might be a very good reason why no one is serving a particular area—there is no market for the service! If such a market does exist and it proves to be profitable, your success will invite competition. Unless you can protect your market, the benefits provided by niche strategies are steadily eroded over time. If you are unable to differentiate your product and cannot locate or maintain a niche, then you must compete on price. This is the business equivalent of “no man’s land.” No business relishes the thought of competing solely on price. Although it is possible to be very successful (anyone ever hear of a company called Wal-Mart?) it is the strategy of last resort, characterized by an obsession with controlling costs. Even 32 THE CONSULTANT 2010

Table of Contents for the Digital Edition of The Consultant - 2010

Executive Director’s Message
President’s Message
Putting Forests, Forestry and Forest Products on the Nation’s Agenda
The Average American Family Forest Owner
Growing Your Business in the Current Recession
Engaging Family Woodland Owners: A Social Marketing Approach
Making Numbers Tell the Truth
Where Are the Conflicts of Interest in Timber Sale Fees?
Marketing Your Business
Income Tax on Cost Share Payment from the Forest Health Protection Program
Improving Appraisals for Tax Reporting Purposes
Expert Witnessing
Meet Paddy Bruton… Again
Being Jim Spitz
The View from the Rockies
Musings of an Endangered Species, or What to do After the Rapture

The Consultant - 2010