Marketing

Lina! Want to start a business with me? We could open a lemonade stand! I’m interested… What’s your plan? The plan?!

We sell lemonade, we make loads and loads of money… we’re RICHHHH! Leon, you’ve barely thought this through! Who’s going to buy your lemonade? How much are you going to charge? Where will you sell it?

How will people even know about it? Lina’s right. Leon needs to think about how he’ll sell his lemonade — the decisions he’ll make and activities he’ll do to go from the idea of selling lemonade, to the actual sales. This process is called marketing. Let’s start with what Leon is offering customers.

Lemonade! That’s his product. Businesses all offer either a product — a drink, clothes, furniture, cars… or a service — babysitting, transportation, hairdressing… When planning their products or services, businesses must ask: Is this something people want? The best way to answer that is by doing research. Leon decides to ask his friends and family what drink flavours they like best.

The results are in: lemonade wins! Then he gets a small group together to test different lemonade recipes. After trying several, they agree on a favourite. This is the one Leon should sell! Leon has discovered more about his potential customers — his market.

He has carried out market research. Leon can use his market research to make his product better, and more likely to sell. Now that Leon is confident about his product, he should think how much he will charge for it — the price. Leon wants to charge $5 a cup. That would help him get rich quick!

But when businesses think about price, they must ask: What will people be willing to pay for this product? Leon can’t just choose a price that suits him. He needs to do more market research. So he looks around at how much lemonade costs elsewhere. At the store down the street, a can is only two dollars!

Leon’s lemonade is fresh, so he can charge a little bit more… but not too much more. He settles on two dollars and fifty cents per cup. So Leon has his product and his price… but he needs to decide where he’ll sell his product — the place. You could sell it outside your house, Leon. But how many people go past here?

Are there enough potential customers? Leon counts, and finds the average: twenty-seven passersby per hour. It’s a busy street! Nice market research, Leon! The front of his house is a great place for Leon’s stand.

Leon figures his business is just about ready to launch! But wait a second. How will people know about your lemonade, Leon? Leon needs to raise awareness of his business. This is called promotion.

One part of promotion is advertising. Leon could put up posters, or post on social media… But instead, he’s chosen to dress as a lemon and wear a sandwich board! Well that’s sure to catch the attention of passersby. But promotion isn’t just about advertising. He might want to offer a promotional deal too, like “buy one get one half price”.

Ah, or free treats for dogs! What a great promotional strategy, Leon. You’re really getting the hang of marketing! Product, price, place, promotion… Businesses from small to large use them — not only when they start out, but all the time. And they use market research to make decisions about each of them.

This helps them market well and, ultimately, sell more. I feel a lot more confident about your business now, Leon. I’ll join you! OK, but it’s your turn to wear the lemon costume!