D. Marketing a Small Business

1
D. Marketing a Small Business

• 6.00 Explain the fundamentals of marketing in a
  small business.
• 6.02 Explain market
• identification.

2
Marketing Concepts

• Market The group of potential customers who
  have similar needs/wants, sufficient buying
  power, and the willingness to give up a portion
  of that buying power in order to buy your
  product/service.

3
Marketing Concepts

• Market Segmentation Dividing the total market
  into smaller, well-defined groups with similar
  wants/ needs and similar key characteristics.

4
Marketing Concepts

• Target Marketing Identifying market segments
  with the greatest potential for sales and
  focusing marketing decisions on satisfying the
  individuals that make up these segments.

5
Marketing Concepts

• Target Market The group or groups of potential
  customers identified as most likely to patronize
  the business and buy its products.

6
Market Segmentation

• Geographic segmentation Dividing markets by
  where customers are located.
• North or South
• Rural or Urban
• City or Suburbs
• Mild/harsh Climate

7
Market Segmentation

• Demographic segmentation Dividing markets by
  characteristics people have in common.
• Age
• Income
• Education
• Occupation
• Ethnic background
• Life stage

8
Market Segmentation

• Psychographic segmentation Dividing markets by
  identifying common interests, attitudes, values,
  lifestyle, or personality traits among the
  individuals that constitute the market.

9
Market Segmentation

• Behavioral segmentation Dividing markets by
  identifying common responses to products and
  product features.
• Rate of use
• Occasion response
• Loyalty response
• Benefits derived

10
Characteristics of a Market Segment

• Measurable Potential sales income must be
  measurable.
• Substantial Potential sales income must be
  substantial enough to warrant the investment
  required to reach the segment.
• Reachable Individuals in the segment must be
  reachable with available promotional tools.
• Responsive The likelihood of the segment
  responding positively to promotional efforts must
  by high enough to warrant the investment.

11

• Market potential The total amount of revenue
  that can potentially be generated in a specific
  industry or market.
• Market share The percentage of the total sales
  revenue captured by a firm within a market or
  industry.
• Market position The perceived standing of a
  firm or a product in the minds of customers as
  compared to the competition.

12
Positioning Strategies

• Regardless of the strategy, a company must focus
  efforts on communicating its position to its
  target market.
• It is in the best interest of an organization to
  plan its position in the market.

• Play to the competitions weaknesses.
• Lead with your strengths.
• Look for underserved markets.
• Target different market segments.

13
Average Market Share
Total sales volume/number of competitors in a
given market.
14
Competition Analysis

• When developing a competition analysis for your
  business plan consider
• Who are your 5 nearest direct competitors?
• Who are your indirect competitors?
• How are their businesses performing?
• What have you learned from their operations and
  advertising?
• What are their strengths and weaknesses?
• How does their product/service differ from yours?