Marketing for Small Business

The small business is characterized by its scarcity of financial resources. This does not

mean that the small enterprise should be overzealous of curtailing expenses. More important it should be cost efficient, well focused in its objective and and pay even greater attention to strategic planning than larger enterprises. Lord Lever-Hulme of Unilever is credited with having said " I know that half the money I spend on advertising is wasted unfortunately I don't know which half". The implication is that it is better to overspend on advertising than to under spend. Large businesses are in a better position to sped more on all its business activities in orders to ensure that objectives are achieved. The small business does not have this luxury so it needs to plan expenditure and be more effective.

Marketing Culture

In many business enterprises both large and small marketing is conspicuous by its absence. Most often marketing is equated with selling. There is a belief that any product can be sold if you have an aggressive sales force and conversely that if your product sales  performance is unsatisfactory that it is entirely the fault of the sales force. Nothing could be further from the truth. Marketing in its broadest sense is a philosophy of business, that is customer orientation. In this sense every enterprise should have a marketing culture. Everybody in the organization should be acutely aware that in a competitive business environment, success is directly attributable to how well that the organization has been able to satisfy and delight the customer. Many entrepreneurs pay only lip service in marketing and delegate the responsibility to look into customer complaints by a relatively junior officer of the business. This does not send the correct message to other persons in the organizations. These type of entrepreneurs rarely make market visits to ascertain the opinion of the market regarding the products and services offered by the company.

Target Marketing

Any business enterprise large or small can not produce a product that will satisfy the entire market. As the consumers have differing needs and wants. In a market situation where the consumer has a variety of choices it is important for the enterprise to focus on customer segments where the product is most likely to be accepted. Large corporations would usually target bigger markets to cover the cost of having more extensive and expensive production facilities. To avoid competing with big business it is more advisable that the small business focus on niche markets. Niche markets are a 'small' group of customers who has particular requirements. One problem is that niche market customers are more discriminating and require a great deal of attention, which again highlights the importance of being customer focused.

Market Information

In order to identify specific customer segments and needs, the enterprise should have access to market information. Such information will relate to competitive products and their attributes including price and quality, consumer perceptions of these products, buying patterns etc. Ascertaining  information relating to total market size and market shares is more difficult, nevertheless it is important to work even with guesstimates. Market research plays an important role in gathering information about trends, consumer preferences etc. The business should not rely entirely on the gut feelings for information about customer requirements. Take lessons from other peoples mistakes it is not necessary to make your own. Compile a big file of all the information about the industry in which you operate. Analyze industry trend to locate opportunities that you can profitably service. It is important to note that ones own insight to the industry could be biased so it is important that third party objective market research is more suitable simply because there is less errors of judgment in that type of data.

Market research is often perceived as expensive and research agencies as being unreliable. Neither of these assumptions are necessarily true. Enterprises do not clearly focus on the information needs and work out the best way of obtaining information. Also market research agencies are not properly briefed and guided on precise information required and why it is required. There are many instances where a lot of money has been spent on research studies but management does not know how to use these reports to leverage their positions. Focus group testing, product testing and inexpensive trade surveys well thought out and properly executed are invaluable and provide a great deal of information.

Market Analysis

Market information gathering has to be carried out so that market analysis can be performed. Market analysis is important for the development of strategy. Market strengths and weaknesses of company products as compared to competitor products, target consumers and distribution channels need to be thoroughly evaluated before strategies are formulated.

A written marketing plan for a product or a category of products is an important requirements. A good marketing plan will include quantified objectives and specific strategies to achieve objectives, within a given time frame. The implementation of the plan should be periodically monitored monitored and corrective action taken as required. Moreover the market is dynamic and plans may have to be changed depending on market conditions and competitive activity.

Product Differentiation

Some years ago it was believed that a product should have a unique selling proposition - USP to be successful in the market place. With the proliferation of brands it is impossible to  for any brand to have quality that makes it completely unique especially in functional terms. However it is very important to create product differentiation to gain a competitive advantage. This differentiation could be in the form of price, product attributes, packaging, customer service and even in intangible benefits. The important thing is to convince at least some target consumers that there are distinct benefits in buying your brands in preference it to competitive brands.

Advertising

Advertising is aimed at creating product awareness and inducing customers to purchase a specific branded product in preference to competitive products. Branding is the process of providing a special identity for your product. The brand must have a a dynamic image and be attractive and appealing to target audiences through effective brand positioning.

Many enterprises look at advertising expenditure merely as a direct as a direct product cost and work on the basis of spending a certain fraction of sales and advertising. This is not a rational approach and unlikely to produce the desired result the desired results. Many companies adopt the approach with no positive results to show no for the money expended on advertising. Advertising is an investment in the brand and expenditure should be need based. Advertising should be carefully planned with clear objectives and with clear objectives and strategies to motivate purchase among target customers audiences. Production and execution of advertising campaigns should be entrusted to professional advertising agencies with a track record of success.  Media selection should be carefully planned to prevent wasteful expenditure. TV for instance is a very effective medium but  it is also very effective. If you are trying to reach selective audiences you could use cheaper communication media you could use cheaper media such as direct mail, e-mail marketing or point of purchase (POP) advertising. Radio advertising is much less expensive than TV and has wide penetration. Its main  problem is that it has no visual dimension. It is a good method of reminding consumers of your product but not effective for launching new products.

Product Distribution

Product distribution is to make products make products conveniently accessible to target consumers. However attractive your product if it is not freely available, consumers will buy competitive products that are that is readily available. Employing an d managing a sales team monitoring dealer credit, etc involves a great deal of administration. It is also very expensive and risky. For a small enterprise it is  make sense to entrust distribution to a specialized agency that sells a variety of products to a wide network of retail shops and concentrate its efforts on monitoring distribution to ensure that objectives are being achieved.

Monitoring performance

All enterprises of nay size monitor performance against plans and objectives. Simple reporting formats can be developed to collect sales and other information. Modern computer technology enables even small enterprise to install a good management information system (MIS) at a reasonable price. Relevant and timely management information is vital for the success of a business organization.

Product development

A business cannot stand still in a dynamic market. It must grow or it will inevitably decline. In order to the enterprise must have clear strategies for improving current products and introducing new ones. We live in the age of raid technology development and product life cycles are getting shorter. All companies should have an on-going product development programme.

Conclusions

There is considerable support for well managed small enterprises to operate very successfully so many of them survive although they are unprofessionally managed.

Therefore we see that proper marketing management is essential for business success in the new world  world that business works and competitors make decisions at the speed of light.