Marketing and promotion provide excellent opportunities to grow your business.
If you build it, they still may not come. Many business owners and executives place so much emphasis on developing new products that they give insufficient thought to the marketing and promotion that are necessary to make those products successful. But once you understand the importance of marketing and promotion, you will find that they are absolutely essential for growing your business and enhancing its legitimacy and value.
Establish Legitimacy
Marketing and promotion are critical for establishing the legitimacy of your businesses among your base of potential customers. Many would-be customers would not have their cars fixed at an auto repair shop they had never heard of -- nor would they allow a plumber or electrician they were unfamiliar with to perform work in their homes. Through marketing, you establish your business as a legitimate participant in the business community. You also send consumers a message that you are not running a fly-by-night operation.
Generate Direct Sales
Marketing and promotion can generate immediate sales for your business. Particularly in the case of direct response marketing -- where the goal of your marketing efforts is to get customers to buy your product immediately -- your marketing efforts should produce considerably more revenue than you spent on marketing. To generate this favorable return, you need to focus on using the right media -- TV, newspapers or Internet -- and message to reach your target audience.
Improve Brand Awareness
Sometimes the goal of marketing and promotion is not to generate immediate sales. When Toyota runs a television commercial, for example, its advertising executives know that customers will not immediately flock to their nearest Toyota showrooms. The value of this marketing is that it creates awareness of the Toyota brand. Hopefully, when consumers are ready to purchase vehicles, they will remember Toyota's marketing and make a purchase. Even if your goal is not to generate immediate sales, marketing and promotion are critical for generating brand awareness that can result in eventual sales.
Increase the Value of Your Business
If your goal is to eventually sell your business, marketing and promotion can actually increase the value of your business. There are several methods that are used to determine the value of a business, but most use sales and earnings as key parts of the formulas. In some appraisal methods, a multiplier is applied to your profits to determine your business' value. That means that if you can use marketing and promotion to improve your profitability, you may see an exponential return on that investment when it's time to sell.
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