That's A Wrap by lindash

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That's A Wrap

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									                                                                      2007 | ISSUE 2




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CONTENTS. Issue 6. 2008
                                                                                 www.thepathfinder.com.au

     That’s A Wrap

     Drumming Up Business During Slow Times

     Making Your Cash Work For You

     Sketching Out The Competitive Landscape

     Need Some Help?


   That’s A Wrap
   While the advice of the sage is not to judge a book by its cover, that isn’t how customers look
   at the goods they are presented with in-store. Packaging plays a large part in the buying
   decision, so one of the easiest ways to generate sales is to make your packaging more
   attractive. Packaging does more than just protect your product in transit from factory to
   outlet – it markets your product. Here are some hints on how to use packaging to the best
   advantage.

   Use Packaging To Engage The Customer’s Attention

   Packaging can make a product stand out from its surroundings on the retailer’s shelf and get
   noticed. The power to draw attention operates through the aesthetics and obtrusiveness of the
   package design. Carefully consider the colours, fonts and font sizes used on the packaging.
   These are what initially attract and engage the consumer.

   Packaging can be made to look larger by using the right colours and simple, bold design work.
   You can pick up some useful ideas from checking how competitors package their product.
   Considering the role packaging plays in grabbing the consumer’s attention and encouraging
   sales the advice of a graphic artist can be a worthwhile investment.

   The shape of the packaging can also be used to make the product stand out, but there is a
   trade off —retailers may refuse to stock awkward shaped packaging that doesn’t stack
   securely, that is difficult to process at the checkout or that simply consumes too much of their
   valuable shelf space.

   Ensure Packaging Connects With The Customer

   The average consumer spends just 2.6 seconds making a decision whether to pick up your
   product or not, so your packaging needs to be targeting the right audience with the right
   message. Are the buyers primarily male or female? Do they come from a younger or older age
   bracket? Are they likely to be time poor or shoppers with time to spare?

   Different demographics have different purchasing hot buttons. For some the
   ‘environmentally safe’ or ‘reusable container’ label will do it. For others it will be the amount
   of fat in the product, the guarantee of product security or maybe even the ease of opening the
   package. General social trends drive consumer preferences and the savvy packager keeps
   abreast of these trends so they can change labelling, package design and packaging materials
   to appeal to changing interests.


   Pathfinder Company – building business value                                            Page 1
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Packaging can be designed to evoke an emotion in the customer so as to give the product an
aura such as exciting, sexy, or whimsical. The graphics on the package can be used to place the
product in a particular lifestyle setting that appeals to the target demographic.

Let The Packaging Inspire Confidence In The Product

For some products, a picture of the item on the packaging really is worth a thousand words. It
can overcome some of the uncertainty in the decision to buy by letting the consumer see just
what it looks like. The package is also the place to display your product's guarantee.

Many items claim ease-of-use as a selling point. Others come as easy-to-assemble DIY kits.
Consumers will be more convinced of these claims if they can see for themselves just how easy
the setting up or construction will be. Even if what's on the outside only outlines the more
detailed instructions inside, or gives an assurance that it is easy to install or operate, it will
provide a degree of reassurance for the customer.
Packaging can present an impression of the quality of the product inside, regardless of price.
Packaging with faded lettering or colours, amateurish design work or strange typeface,
outdated graphics, and cheap construction convey an impression of low quality or poor value
that reflects on the product itself.

Design The Package To Provide A Sense Of Security

A whole raft of laws regulate the design of packaging of potentially dangerous goods such as
flammable materials and medicines. Meeting the technical specifications is of course
mandatory. Another influential class of laws that affect packaging relates to labelling and
cover information from the weight, to chemical constituents, to place of origin. This
information provides the consumer with a sense of security about the product. The clever
marketer may find that some of this information represents a hot button for particular
consumers segments and is worth emphasising.

The package around a product is a lot more than just a container to hold and protect it. For
smaller manufacturers the package may represent the most prominent advertising vehicle
they have for their product. It can also be their only means of combating products that have
been given greater shelf space or are more easily recognised brands. Well crafted packaging is
a marketing tool of first rate importance—your ‘silent salesperson’.


Drumming Up Business During Slow Times
Every economy and every business has its ups and downs. The trick to weathering the storms
successfully is to be prepared for them.

Reactivate Dormant Accounts

The quickest and easiest way to do this is to sit down with your list of past customers, call
them, say hello, and see what's going on. Don't make this a hard sell call, just a reminder that
you have done business before and you are interested in working with them again. You don't
have to ask for work directly but when you end the conversation you might say something like,
"Well, it's been good talking with you. Keep in touch, and if there's anything I can ever help
you with, don't hesitate to give me a call." If you are uncomfortable about phoning, send a
letter, flyer or brochure that mentions new products or services and includes testimonials
from other customers.



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Provide Superior Service To Current Customers

When business is slow you want to do everything you can to hold on to your existing
customers. The best way to hold on to them is to give them not just their money's worth, but
more than their money's worth. Now is the time to go the extra distance, give that little bit of
extra service that can mean the difference between dazzling them and merely satisfying them.
The best protection against a downturn in business is an active list of delighted customers.

Have Existing Customers Drum Up New Business For You

It’s probably fair to say that the customers you’re currently dealing with associate with like-
minded people - people who are in a similar income bracket, have similar interests, hobbies,
and buying habits. And therein lies your sleeping giant. A referral system can harness this
giant by encouraging existing customers to refer these people to you. If it’s true that most of
your customers are happy with your business and the products and services you sell, then it
follows that most would be quite happy to refer you given an easy way to do so, such as
displaying your brochures in their business. Slow times also provide the opportunity for more
active networking, looking for opportunities that may only present themselves when talking to
people.

Plan An Ongoing Marketing Campaign

Slow business presents an opportunity to increase the amount of your time spent on
prospecting for new business. During a lull in business you need to make this extra effort to
attract clients or customers, follow up on leads and close sales. What types of marketing work
best in slow times? Use a combination that includes direct marketing (direct response print
ads, sales letters, self mailers, postcards, special offers) plus low-cost/no-cost visibility
enhancing publicity techniques (press releases, articles, speeches, booklets, seminars,
newsletters). Avoid costly image building marketing such as large space ads, slick corporate
brochures, expensive annual reports and other marketing communications that can drain
your budget without producing sales.

Add Value To Your Existing Services

In a slow economy customers are more concerned with price than ever before. Actually, their
real concern is making sure they get the best value for their money. You can win new
customers and retain existing ones by enhancing your services and providing your customers
with more value for their money. For instance, if you are selling a commodity item you could
add value by offering faster delivery than your competitors. Or a wider selection. Or easier
payment terms. Or a better guarantee. There is no need to give away the store and promise an
excessive amount of extra service. The extras you provide need not take a lot of time or cost a
lot of money.

Keep Busy By Working ON Your Business

A slow period in your business is a good time to busy yourself with internal projects that will
improve the business, such as developing a new marketing strategy, making technical
improvements to an existing product, auditing and improving your customer service
procedures, revising your newsletter or website, or any of a hundred things that you couldn’t
find the time for previously. Now you have the time. So do them.




Pathfinder Company – building business value                                            Page 3
Grow your business                                                             2008 |    Issue 6




Making Your Cash Work For You
These days, your money has to work for you. Tracking cash flow is important but getting the
most out of the cash that comes in requires shrewd decisions about how to invest it. It’s not
always easy to determine which area to put it into for the best overall result to your finances.

Let The Cash Sit In Your Account

Not the most effective use of cash. Returns are usually low so any cash that does need to be
put aside for specific projects such as future expansion should be moved to a higher yielding
investment. When determining where to invest this cash, first determine how much risk you
are willing to accept, and secondly, how easily the investment can be converted back into cash
should a more opportune way of spending it come up.

Invest For The Future

Regularly moving a percentage of your deposits into a retirement fund will prevent the money
from dribbling away into other uses and provide you with a more secure future.

Spend Cash On Expenses

Retaining the necessary cash reserves for day-to-day operations and emergencies is necessary
but the way in which it is done can make your cash flow situation and your life easier. Make
provision for taxes by regular contributions to an estimated tax account. Transfer a percentage
of funds from your main account into a payroll account to ensure the funds are there to pay
employees and to facilitate record keeping. Keep cash available for the longest time by holding
off paying bills to near their due date unless there is a worthwhile discount for paying earlier.

Purchase Assets

This is a wise choice since it promotes business growth. In reality two factors influence the
choice. First, there may be a number of assets that could be purchased and you need to
estimate which will provide the best return on the investment; secondly, the return from
purchasing the asset must be better than that available from any other form of investment.
Your accountant can show you how to use a financial tool called net present value (NPV)
analysis to compare the expected investment and return on different projects to see which one
offers the best profitability. You may find that your best investment is, in fact, the stock
market or a money market fund.

Pay Off Debt

In general, since interest rates run higher than almost all after-tax return rates on
investments, it is a better decision for a business to pay down debt whenever possible to avoid
the difficulties that come with servicing it. There is no investment risk involved and paying
your debt usually doesn’t involve any additional fees. When paying existing debt it is better to
pay a revolving line of credit rather than an installment debt. This retains your borrowing
potential when the need for additional debt occurs.

Return The Cash To Shareholders

While it is tempting for the entrepreneur to take the money as salary or a bonus, or return it to
other shareholders, often the more prudent choice is to reinvest the funds to help propel
business growth. Returning cash to shareholders is a last option when there are no good

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assets to purchase, debt and expenses are at reasonable levels, and there are no high yielding
investment opportunities available.

Cash management is essentially about putting every dollar that comes in to working in the
most productive way it can for you. Inefficient cash management practices can lead to a build-
up of non-productive cash or its disbursement in sub-optimal ways. Selecting the most
efficient way of using cash involves an awareness of what is available along with the
opportunity costs and trade-offs associated with spending it on one thing rather than another.


Sketching Out The Competitive Landscape
For anyone trying to grow a business, one of the necessary tasks is to map the competitive
landscape and continue to keep tabs on how things develop in it over time. With a good
understanding of the competition facing your business you’ll be able to spot and exploit
opportunities as they develop. Ignoring the competition or letting success lull you into a false
sense of security could mean nasty surprises further down the road. The following points can
help you start developing a strategy:

    Identify your competitors: Your competition includes anything that could draw
     customers away from your business. For example, for a movie theatre, other cinemas
     represent a direct competitor. But there are also a number of indirect competitors that
     need to be outmaneuvered as well. These are businesses after the same customer dollar,
     as you. For the movie theatre, cable TV networks, DVD rental stores and even online
     movies all represent competitors.

    Be a customer: Take yourself to your competitor’s and play at being a customer. Testing
     a competitor’s ability to serve you will reveal much about their business practices. And
     don’t stop at asking about things—test them out by buying something. It’s the only way
     to gain first hand experience with the company’s products and customer service.

    Talk to your competitor’s customers: Why do they buy from your competitors? Is it
     because of the quality of the product or service, the price, the location or the customer
     support? What do they dislike about the company? What do they wish that company
     would provide? Could you provide it?

    Use the internet: You can also learn a great deal about competing businesses simply by
     going to their website. Check out how they arrange their pages and navigation, what
     information they offer, how easy they make the purchasing process and so on.

    Attend industry conferences and trade shows: Your competitor’s representatives will be
     pounding their chests about their products or services. Take advantage and familiarise
     yourself with their product offerings, strategies and how they sell themselves.
    Be aware of the potential for new competition: The competitive landscape can change
     fast these days. A national chain may not have entered your region yet—but what if it
     does? Likewise, companies that don’t currently compete with yours might shift their
     focus and pit themselves against your business.

    Assess the competition’s goals: A competitor trying to increase its market share might
     lower prices; a company attempting to increase profits may cut costs; and a business
     that wants to accelerate sales growth might kick off a marketing campaign. If you know
     your competitor’s goals, you’ll be better able to anticipate their strategies.

    Check public filings: Companies are obliged to disclose various pieces of information to
     government agencies. Such disclosures are required to undertake public offerings,
     receive building permits and register for patents or trademarks among other things.

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Grow your business                                                               2008 |    Issue 6




       Many of those filings are public record and contain information about the company’s
       goals, strategies and technologies.

Gathering information about your competitors will show you where you lag in the competition
stakes and can suggest ways in which your company can match, and beat, them.



Need Some Help?
                     Not sure who to turn to for help with your business. Why not give us a call.
                         We are happy to meet with you to discuss your situation and how we
                          may help. To make an appointment, call Ralph on 0411 555 939.
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                        information in this publication, this firm and any related suppliers or
                  associated companies accept no responsibility or any form of liability from
reliance upon or use of its contents. Any suggestions should be considered carefully within
your own particular circumstances, as they are intended as general information only.
Information in this newsletter has been sourced from the RANONE and Keys to Growth
networks and My-Tyme®. All material is copyright.


Memorable Quotation
Effective leadership is putting first things first. Effective management is discipline, carrying
it out - Stephen Covey




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                                                           Wayville South Australia 5034


                                                                          T 0411 555 939
                                               PO Box 1052                F 08 8281 1654
                                               Golden Grove Village       E info@thepathfinder.com.au
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Pathfinder Company – building business value                                              Page 6

								
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