Marketing And Small Business

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Marketing And Small Business

• Developing A Marketing Strategy

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Marketing

• The whole idea of marketing is the pursuit of
  opportunity
• What makes a firm successful is not just having a
  good product ?it is good marketing supported by
  reliable goods or services
• Marketing is the process of delivering
  goods/services to customers at the right place,
  time, and price
• Identification of the target market is crucial to
  the success of the business

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Market Research

• Goal identification of your particular market
  segment (people who will buy what your firm is
  offering)
• Market research takes different forms because
  markets and businesses differ
• Evaluate the various target markets and choose
  the appropriate group
• Identification of your particular market segment
  (people who will buy what your firm is offering)
• Analyze data about the buying habits of this
  group
• Develop an understanding of purchase habits and
  the selling experience this target market is used
  to
• i.e. direct sales, retail, catalogue etc.
• ? It is the foundation for your marketing plan

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Market Research Findings

• Who are the potential customers for the goods or
  services
• What is the market size
• Where do the customers live
• Why does the market buy these goods or services
• How often does the market buy
• How much do they spend
• Are the firms promotional programs effective
• What do customers think of the company
• How does the firm compare to its competitors

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Types Of Market Research

• Secondary research
• Outside information census data, government,
  chamber of commerce, Statistics-Canada, trade
  associations.
• Macro information deals with populations as a
  whole trends, family income, consumer spending
  habits etc.
• Primary research
• Two commonly used methods are interviews and
  questionnaires -- often costly and inconclusive.
• More applicable to the industrial market than
  consumer market.

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Target Market

• Those individuals who will buy your goods or
  services
• Define and analyze by age, sex, geographic
  location, occupation, income, martial status,
  familial status, health, lifestyle factors etc.
  determine the demographics of your group
• Develop sales projections based on
• the size of the market
• the spending in this industry
• The number of competitors
• The geographic area you plan to target
• the capture rate you expect
• This group can be a small niche or a large group
• ? Develop a clear understanding of the
  motivations and desires of your customer group ?
  the better your analyze your target market the
  more reliable your sales projections will be

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Integrated Marketing Campaign (IMC)
Promotion
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Product/Service Strategy

• The essence of this strategy is to offer a
  product or service to a segment of a market that
  is not well served things to consider
• Determine the appropriate product/service
  features based on customer preferences and
  competitors offerings
• Offer a product or service that will have some
  differentiation in order to attract customers
  away from competitors or create a new niche
• Offering a product that ensures a profit --
  volume, margins
• Determine where you will get your raw materials
  and supplies
• Over time adapt your strategy by
• Anticipating the markets changes in preference -
  technology, buying habits etc.
• Monitoring the products life-cycle
• Continuing product innovation and new product
  development

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Pricing Strategy

• The most sensitive issue in business
• The fundamentals of pricing strategy for small
  business center on cost of the product, what
  customers are willing to pay, and what
  competitors are charging
• Long-term pricing must be established on a
  full-cost basis, taking into consideration both
  fixed and variable costs
• Avoid the situation in which price is the only
  strategy to stay in business
• A low-price strategy is not the best choice in
  the introductory stage ? difficult to raise
  prices later on (e.g. dot.com)
• When quality is offered the entrepreneur should
  get the price he or she deserves

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Pricing Strategies

• Cost-plus a mark-up to a full or variable cost
  (Commodity)
• Market skimming charging a high price for new
  products or technology (early adopters) -- (e.g.
  Intel with new chips)
• Market penetration low price for new product or
  technology (attract large market share) (e.g.
  Microsoft w/ Explorer)
• Complementary product low price item with high
  price add-ons (e.g. Gillette)
• Flexible pricing different pricing to fit
  different customers (volume discounts)
• Prestige pricing setting high prices to attract
  a certain segment of the market (e.g. Gucci)

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Promotion Strategy

• Goal to provide information to the client about
  your company, product/service and to motivate and
  influence them to buy
• A steady long-term campaign will have more effect
  than an intense short-term campaign -- goodwill
  requires time
• Sales budgets can be set as of sales, a
  one-time lump sum, a variable cost for a
  particular product
• Forms of low-cost advertising freelance
  designers and writers, business cards,
  newspapers, hand-bills, specialty advertising,
  cold calling
• Promotion campaign Cover all media, costs, reach
  of media, scheduling -- include all sources of
  information

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Promotion Strategy
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Promotion Strategy

• PR is a very powerful tool for promotion
• Gatekeeper identify
• Opinion leaders, article writers, radio DJ's,
  regulators, etc
• E.g. book publisher targets profs/course
  coordinators to sell books to students
• E.g. Oprah introducing books to people ? boosting
  sales
• E.g. home equipment producers target interior
  decorators/contractors to sell products

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Distribution Strategy

• Distribution channels differ greatly between
  industries
• Type of market number and behavior of buyers,
  size of orders, geographic location
• Product characteristics size, service
  requirements, technological complexity
• The companys internal organization HR and
  Financial resources
• Competitors distribution channels -- condition
  customers to certain type of service (e.g.
  refrigerated yogurts vs. vacuum)

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Distribution Strategy

• Working with intermediaries
• The more tasks they can perform -- the greater
  the value (service, promotion, proximity to
  customers)
• Determine roles and responsibilities of all
  agents
• Determine method of product/service delivery
• Cover geographic locations, shipping,
  customs/duty
• Determine levels (wholesale, distributors,
  retail), mark-up to be applied at each level of
  distribution etc.
• Ensure a profit can be made at each level of the
  distribution chain

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Market Strategy Matrix
Current Products
New Products
Current Markets
New Markets
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Market Strategy For Growth

• Market penetration
• Increase market share for present products or
  services in current market through marketing
  effort (steal competitors customers, increase
  customer spending, get new users)
• Market development
• Introduce present products or services into new
  markets (new distribution channels, new type of
  customers, new locations)
• Product development
• Introducing new products for existing market (new
  product features, different quality levels, new
  technology)

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Market Penetration

• Current markets are not saturated
• The usage rate of present products could
  significantly increase
• Market share of competitors is eroding
• Increased economies-of-scale reduces costs or
  provides other competitive advantage
• A positive correlation exists between marketing
  expenditures and dollar sales

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Market Development

• New channels of distribution are available
• New untapped or unsaturated markets exist
• Capital is available for expansion purposes
• The company has excess production capacity
• The industry is becoming global in scope

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Product Development

• The company has successful products that are in
  the maturity stage of their life-cycle
• The company competes in an industry with rapid
  technological developments
• Major competitors offer better quality at
  comparable prices