The Importance of Abiding by Advertising Laws

When advertising your small business you should avoid illegal advertising methods. It is important to abide to advertising laws and rules that protect customers from false and exaggerating advertising claims. By not complying with advertising lawsyou put your business and yourself at risk of getting sued. However many entrepreneurs are unaware that there are laws that prohibit misrepresenting a product or service. They may not realize that exaggerating or posting false testimonials are illegal advertising methods. Below you will see tips of what NOT to do when advertising your products or services.

Advertising Laws Prohibit

Misrepresentation- Misrepresenting a product includes changing photos to make the product look better, or misrepresenting the size or amount of products. Claiming that consumers can clean a toilet with one spray of your product when actually it takes ten is misrepresenting your product. Saying that the product is sold for more elsewhere when actually it is not is also considered as misrepresenting. It is unlawful to retouch before and after pictures. In 1966 two Seattle business owners were fined thousands of dollars after discovering that the Native American Styled artwork they were selling were not created by Native Americans as they claimed.

Unsubstantiated Claims- Your company can not give consumers a false representation of your business. This is considered an illegal advertising method. For example if you run a modeling agency and you claim that after models spend $300 taking professional photos, they will be guaranteed a job making at least $1,000 a week and it turns out to be not the case for most models in your agency you can be sued. The Federal Trade Commission has won many settlements where the business claims in their advertisements were not achieved by the majority of the consumers.

Fake testimonials- Everyone that gives testimonials in your advertising must be users of your product or service. If you pay for their testimonial you must make that known to your viewers.

Your goal in conducting market research focus groups is to learn as much as you can about your target market. Market research focus groups can give you a glimpse in the minds of your target market by revealing their thoughts, opinions, and feelings about a certain product, service or topic. Though conducting focus groups is a useful method of market research it should not be used as your sole method of market research.

What can Focus Groups be used for?

• obtain opinions and concerns about a product or service
• test out a new product
• improve an existing product or service
• develop ideas for new products or services
• learn about your target market’s wants, needs, concerns and motivation for buying
• generating ideas to solve a problem

What is a Focus Group?

A focus group is a group of anonymous people (fitting the profile of your target market) whom gather around to talk in debt about a certain product, service, or topic. The members of the focus group are chosen based on certain characteristics such as age, income, race and demographic location. A focus group can be made up of 6-15 people. In the focus group participants are asked about likes, dislikes, problems and opinions on a product or service. Each focus group should have a moderator. The moderator will be given a discussion guide sheet to guide him/ her along the session. The moderator is there to ask questions, encourage everyone to speak up but make sure they are not all talking at the same time. The participants of the focus group should be doing most of the talking, not the moderator. The participants should be able to voice their concerns, thoughts and opinions freely. A focus group can last 1-3 hours but no longer than that otherwise members may become restless.

Advantages of Market Research Focus Groups

• you can attain more in debt information about feelings, thoughts and concerns of your target market.
• Focus groups can provide a new perspective as well as new ideas for your product or service.
• This form of research is attained more quickly.

Disadvantages of Market Research Focus Groups

• Members may feel peer pressure to give certain answers or to go along with the group.
• The small size of the focus group may not be a good representation of the larger community.
• Can be expensive.

Costs of a focus group

Costs for a focus group meeting will vary. You can choose to hire a market research firm to conduct the focus group meeting for you. However if you are working with a budget you can decide to do it yourself. Of course participants will want to be compensated for their time anywhere from $20- $100 for each. Many focus groups also offer their participants free food or snacks.

New Trends with Focus Groups

A new trend with focus groups thanks to the Internet are online focus groups.There are benefits to conducting focus groups online such as lower costs. Instant messaging, screen sharing and webcams have made it possible to have a group discussions online.

Small Business Marketing is the process of selling products or services to customers usually through advertising efforts. A good business marketing strategy devises a method of effectively communicating to potential and present customers why they should choose your business. Marketing your small business is essential to it’s success so it is a good idea to develop a Small Business Marketing Plan. You can also consider getting help from marketing experts who have extensive knowledge in this field and can offer you valuable marketing strategies. Below are some tips and marketing strategies for medium and small businesses.

1.)Target Market- The first step in developing a small business marketing strategy is to select your target market. Specifying who you are selling to can help you develop more effective advertising campaigns.

2.)Conduct Market Research- By conducting market research you can discover what potential customers are looking for in your type of business and then use this information to develop an advertising campaign that will attract them. For example if through market research you discover that the main motivator in consumers are low prices, you can use this to appeal to them. You should be aware of your potential customers and their wants and needs. Is there a demand for a product that is not being met? Is there a lot of competition? Know your market environment. Marketing a product or service that nobody wants is a sure way to small business failure. Many entrepreneurs make the mistake of assuming they know what customers want and only discover their mistake when their small business fails to produce profits. Back up your assumptions with facts and market research. Just because you love those presidential bobble heads doesn’t mean your customers will.

3.)Analyze your competition- Perform a competitive analysis and find out all you can about your competition. How are they promoting their business? What are their strengths and weaknesses? Through your competition you can get good ideas on how to advertise your small business.

4.)Your unique business spin- Your small business should have its unique spin that makes it stand out from the competition. Sell why your product or service is better. Does it offer something different from your competitors? It might be faster service, better quality, lower prices. Will customers appreciate this difference? You may think you know what customers want but you don’t. You may be surprised to find out that lower prices are not always a customer’s priority. Market Research can help you gain valuable information about what potential customers are really seeking in your business.

5.)Communicate through a single statement- Communicate the “unique spin” of your small business idea through a single statement. This statement can be your small business slogan. Make sure this unique spin is something your target market wants. For example Maria runs a house cleaning service in NYC. Her target market are wealthy New Yorkers who don’t have time to clean. After conducting market research she finds out a majority of her potential customers are seeking 1. Good quality cleaning and 2. Cheap prices. She decides to make her slogan, “Luxury cleaning without the luxury prices.” Maria uses this phrase on all her advertising efforts. The public will repeatedly see this phrase and associate it with Maria’s cleaning business. The phrase is simple, straight to the point and conveys the unique spin.

6.)Consistency- Using a consistent statement and brand for your small business marketing will better utilize your past and current advertising efforts. You want past customers to remember you and return, and new potential customers to give you a try.

7.)Test various small business advertising methods- Try various advertising methods and find out which method of advertising is more effective for your small business. This will save money in the long run because you will only be spending money on the most effective forms of advertising. For example you may want to hand out flyers, develop a small business website, try yellow book ads, billboards, newspaper ads, radio ads and more. Find a way to keep track of how customers find your small business. Find new ways to effectively reach your target market. Test conventional as well as non-conventional ways of advertising. Be sure to avoid illegal advertising methods.