Small Business Marketing
• What is Marketing?
– It is much more than just selling and advertising.
– It involves all the activities needed to get a product from
the producer to the ultimate consumer.
• Drucker on Marketing
– Businesses have two—and only two—basic functions:
marketing and innovation.
– These are the only things a business does that produce
results; everything else is really a “cost.” Small Business Marketing (cont’d)
Production
Concept
Selling
Concept
Marketing
Concept
The Evolution of Marketing
Relationship
Marketing
Small Business Marketing (cont’d)
• Production Concept
– Concentrating more on the product the business makes than on
customer needs.
• Selling Concept
– Making products and then convincing people to buy the
products.
• Marketing Concept
– Determining the wants and needs of customers before goods
and services are produced.
• Relationship Marketing
– Concentrating on establishing a long-term buyer-seller
relationship for the benefit of both parties.
Marketing Strategies for Small Business
• Marketing Strategy
– States what marketing efforts are intended to accomplish
and how they are intended to accomplish it.
– Is identified in the marketing section of the business
plan.
– Will help management to be proactive, not reactive, in
running the business.
– Includes a description of marketing objectives, sales
forecast, target markets, and marketing mix.
• Marketing Objectives
– Define the goals of marketing plans.
– Must be measurable
– Must be action oriented
– Must be time specific
• Types of Marketing
Objectives
– Marketing performance objectives
– Marketing support objectives
Developing a Sales Forecast
• Sales Forecast
– The quantity of products (dollars and units) a business
plans to sell during a future time period.
– The “top line” figure for projected revenues
• Areas Impacted by Sales Forecasts
– Channels of distribution
– Sales force requirements
– Advertising and sales promotion budgets
– The effects of price changes
Build-Up Method Break-Down Method
Types of Sales
Forecasts
• Identify as many target
markets as possible and
predict the sales to each
group.
• Combine the predictions for a
total sales forecast. Break-Down Method
Types of Sales
Forecasts
• Identify as many target
markets as possible and
predict the sales to each
group.
• Combine the predictions for a
total sales forecast.
• Estimate total market potential
for a specific product or an
entire industry.
• Break the estimate down into
forecasts of smaller units until
an estimate is reached of how
large a market will be reached
and how many sales will be
made.
Time Series Analysis Regression Analysis
Historical Data
Sales Forecasts
• Uses historical sales data to
identify patterns over a period
of time.
Creating a
Defensive Marketing Strategy
Leverage Strengths
Keep Rivals Guessing
Know When to Retreat
Make Customer
Satisfaction a Priority
Identifying Target Markets
• Market Segmentation
– Dividing the total market for a product into identifiable
groups (target markets).
• Segmentation Variables
– Geographic
– Demographic
– Psychographic
– Received benefits Market Matchup
– Target Market:
• People with a common want or need that a business
can satisfy
• People who are able to purchase your product
• People who are more likely to buy from your business
– Market that a Business Needs:
• People with a need that your products can satisfy
• Enough people in the target market to generate profit for your
business
• People who are in possession of, and have the willingness to
spend, enough money to generate profit for your business The Evolution of Market Strategy
Mass
Marketing
(1960s)
Market
Segmentation
(1970s)
Niche
Marketing
(1980s)
Individualized
Marketing
(1990s) Factors Leading to
Individualized Marketing
Traditional media channels have
reached a point where “shotgun”
marketing approaches do not
stand out.
Technology allows firms to
conduct more individualized
marketing in tracking customers
with more precision.
Get Found Online
• Search Engine Optimization (SEO) Strategies
– Find the hottest keywords for your market
– Plug keywords into the right locations in your copy and
code.
– Use keywords that relate directly to your content.
– Keep the spiders coming back with frequent new content.
– Collect links from other sites that are considered reputable
and relevant.
– Use a site map to boost your rankings in Google, Yahoo!
and Windows Live Search. Understanding Consumer Behavior
• Consumer Behavior
– Why people purchase products
• Kurt Lewin’s “black box model” of personal influences:
• Inner needs
• Thoughts
• Beliefs
• Attitudes
• Values
• Motives
• Perceptions
• External environmental forces
Understanding Consumer Behavior (cont’d)
• Evoked Set
– The group of brands or businesses that come to a
customer’s mind when he or she thinks of a type of
product.
• Cognitive Dissonance
– The conflict (i.e. remorse) that buyers feel after making a
major purchase. Market Research
• Market Research
– The process of gathering information that will link
consumers to marketers to improve marketing efforts.
– The function that links the consumer, customer,and public
to the marketer through information.
• Uses of Market Research Information
– Identify and define marketing opportunities and problems.
– Generate, refine, and evaluate marketing actions.
– Monitor marketing performance.
– Improve understanding of marketing as a process.
Identifying the Problem
– Is the most difficult and most important part of the market
research process.
– Requires a clearly stated, concisely worded problem in order
to generate usable information.
• Planning Market Research
– Identify the types of information that you need.
– Identify primary and secondary sources of data.
– Select a representative sample.
– Select a research method and measurement technique. Qualitative Data:
– Refer to research findings that cannot be analyzed
statistically.
– Are useful if looking for open-minded responses to
probing questions, rather than yes-or-no answers.
– Can be obtained through personal interviews or focus
groups.
– Help identify trends in answers or obtain specific detailed
responses Quantitative Data
– Are structured to analyze and report numbers.
– Help illustrate relationships between variables and
frequencies of occurrences.
– Are useful in providing information on large groups of
people.
– Can be analyzed statistically to show causation.
– Can be obtained through telephone interviews, personal
interviews, and mail surveys. to your questions.
Data Analysis
– The process of determining what the responses to your
research mean
• Processing Data into Information
– Clean the data to remove forms that are incomplete or
unreadable.
– Code and examine the data to identify trends and develop
insight.
• Presenting the Data and Making Decisions
– Conclusions based on data analysis may be obvious.
– Data may show exactly what to do next to answer the
research problem.
– Market research provides you with information that will
allow you to be proactive. • Limits of Market Research
– Research can provide a picture of what people currently
know and expect from products or services, but it has
limited ability to indicate what people will want in the
future.
– Innovation does not come from market research.
– The ideal is to concentrate on defining markets rather than
on reacting to them.