Skeet and Ike's in Vancouver used a Golden retriever with dashed guide-dog ambitions to lead the organic food manufacturer to the promised land. Lost Boys Studios Inc., also of Vancouver, indulged in extravagant parties and wallpapered the town with lavish print ads.

Marketing strategies for start-up businesses are hit-and-miss affairs. Unfortunately for a large percentage of those businesses, it is more miss than hit.

Up to 40% of Canadian businesses fail in their first year. By year four, that rate has jumped to as high as 70%, according to Statistics Canada. Key among the reasons behind business failure is marketing.

James Schauer, a Brighton, Ont.-based management and marketing consultant, says it is one of the most misunderstood and misused aspects of business in North America.

The Easton Marketing Ltd. principle says that is because "most people, especially in the United States, see marketing as advertising and sales, and it ain't."
 

Advertising and sales is not all....

Advertising is one sub-set of Mass Selling, which is in turn a part of Promotion - just one of the 4 P's

A research paper, Marketing and Clearing the Path, by Mr. Schauer, points out lack of marketing skills, managerial inexperience and incompetence kill 90% of businesses.

He says the 21st-century marketplace's accelerated pace of change has made marketing critical to the survival of any business, be it a startup or a well-established firm.
 

pace of change influenced by

speed of developments in the "Technological Environment intensity of the "Competitive Environment" massive changes in the "Social Cultural Environment" many updates in the "Political-Regulatory Environment"

While most entrepreneurs rolling their new-found companies down the runway might get the dollars-and-cents realities involved in achieving liftoff, marketing is a different story.

For starters, there is a lot of over-inflated jargon, such as demographics; market segmentation, the Porter 5 Forces, which are suppliers, substitutes, industry, competitors and buyers; and socio-cultural environments. Add to that a stable of acronyms ranging from SWOT (strengths, weakness, opportunities and threats) to PEST (the external influences on a business: political, economical, social, technological).

Small wonder most new businesses do not understand marketing. Trudy Belanco, the senior business consultant at Ontario's Brantford-Brant Business Resource Enterprise Centre, says between 85% and 90% of business startups do not have a marketing plan.

"New businesses are aware of marketing, but it's definitely not a strong suit. I find that most businesses are the best-kept secret," she says.

That is usually a fatal oversight.

Judy Bishop of Bishop and Company in Vancouver says: "Sales is the short-term capture of business; marketing is the development of flow of business over time. If you don't do both, you die."

A marketing plan is an essential first step in planning that can help companies avoid going under.

David Frey, president of Marketing Best Practices Inc., of Houston, Tex., says it should be the first element of any business plan. "Your marketing plan is where you prove your concept," he says.

This involves thinking through such questions as: "Does my market want my product or service? Do I have proof that my market will pay for my product or service? What competition will I face and how will those companies respond? If you can't sell it, you shouldn't produce it," he says.

A marketing plan is "a recipe for getting it right," Ms. Bishop says. That recipe should include goals, marketing tactics and specific actions to execute both. It should be aimed at a specific customer and be grounded in sound research.

She says one of the most common errors new companies make is "assuming the world will want what they have -- in the package they have it in, at the price they have it at, in the way they want to sell it."
 

Typical of a "product orientation"

The key is to listen to the customer, to what the marketplace is saying and to what the competition is saying. "If you don't know what is important to your customer, how the heck can you satisfy them fully?" Mr. Schauer asks.
 

Listening to the customer is a "marketing orientation"

"Your business ultimately depends, not on customer satisfaction but on having them return as loyal customers." (CLV)

The consultant also preaches marketing as a holistic company-wide strategy, not the piecemeal approach adopted by most firms.

Vancouver-based Intrawest Corp. has developed an acute ear for the marketplace that has paid huge dividends. Founded in 1976, it is North America's largest developer of destination resorts. Its revenue for 2001 was $1.4-billion, up almost 17% from a year earlier.

James Askew, vice-president of Intrawest's Playground sales arm, says 80% of the company's success is from listening to the marketplace. Intelligence-gathering starts with its sales staff, and regular input from focus groups guides the scope and detail of Intrawest resort developments.

Of course, there are fiscal realities. Most companies do not start with huge cash reserves. Therefore, effective marketing requires squeezing the best bang from every buck.

Skeet and Ike's started in 1996 as a two-man home business peddling specialty peanut butters out the back door of one of its partner's homes. Dogged marketing has changed all that. From 1997 to 2001, the organic snack manufacturer's annual revenues jumped from $47,000 to $1.5-million.

The company caught an early break when its label immortalizing Ike, a Golden retriever, piqued the interest of a distributor who liked dogs.

Ian Walker, president of Skeet and Ike's, says the real growth catalyst was curbside sweat marketing: Distributing samples at Vancouver's Granville Island market and cajoling grocers into giving them space in flyers and stores, where they distributed samples. The meet-and-greet approach extended from end-user through distributors, store owners and all layers of its sales and supply chain.

For Lost Boys Studios, marketing began in 1996 as an excuse for the animation company "to justify throwing huge, crazy parties and peeing on our competition's rock through oversized print ads," says Mark Benard, company founder.

Recognizing that ego and personal insecurities were driving marketing, he shifted gears. One of British Columbia's fastest- growing companies, Lost Boys sinks about 30% of its resources into solidifying existing relationships and cultivating new ones.

As with any endeavour, patience and perseverance are essential for a successful marketing plan.

"The problem with the market," says Alvin Wasserman, of Vancouver's Wasserman and Partners Advertising Inc., "is that it's often way slower than you think, and if you haven't worked it through and had resources [and] timing, a single burst is generally not going to get you there. There are very few true overnight successes."

START OFF ON THE RIGHT FOOT:

In the past decade, small businesses in Canada have been a key engine of economic growth. More Canadians are self-employed (one in six) than 20 years ago (one in eight), and six in 10 work for a small or mid-sized business.

"A large part of [the] success of the Canadian economy relies on the success of our small business customers and we want to do everything we can to help them," says Susan Kennedy-Loewen, vice-president for small business banking at Scotiabank.

She offers these tips:

Have a drive to succeed Being your own boss has advantages: You are free to use your own ideas, set your own hours and focus on your goals. However, most small business owners say they work much longer hours for themselves than they ever did for others. Making your business work requires self-confidence, drive, dedication and commitment. It is not easy, but it is doable.

UNDERSTAND YOUR BUSINESS Know how your skills apply to your business area, what talent you bring to it and what training. Know if there will be a market for your product or service. The more research you do, the better. No business fails because the owner knows too much.

INVESTIGATE YOUR MARKET This is a multi-staged process. Begin online, talk to people in the field and then explore the details. The government of Canada has Web sites to help you in the initial stages of market research: www.cbsc.org, the Canadian Business Service Centre, has advice on starting or expanding a business; www.strategis.gc.ca, Industry Canada, has research on markets and other businesses and downloadable guides; www.statscan.gc.ca, Statistics Canada, has demographic research and trends, including community profiles.

Create a plan This is the cornerstone of a successful venture. It need not be complicated at first, but it should be well thought out and include skills and expertise, the market, added value for customers, infrastructure, suppliers and financing.

MEET YOUR BANKER One of the most important long-term relationships you will have (outside of customers) will be with your banker. Financing a venture is a crucial step. A small business banker at your bank branch can guide you through the pitfalls of startup and beyond, help with a business plan and assist with financial planning for the future.

Source: Scotiabank

Part one of a six-part series.