SMALL BUSINESS
MANAGEMENT
Chapter Eight
Marketing Management
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The Role of Marketing Management
in the Small Business
 Defining
the target customer, characteristics and
wants and needs
 Understanding the environmentals that affect
operations
 developing the product and/or service
 developing the channels of distribution
 promoting the product and/or service to those
influential in its purchase
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The Target Customer
 The
–
–
–
–
Consumer Market
Demographics
Lifestyle characteristics
Purchase characteristics
Purchase motivations
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The Target Customer
 The
Industrial Market
– Companies and government agencies that
purchase from small businesses
– Influences on industrial demand
 the
economy and the end product, government
legislation and regulations, agencies that exert
influence on purchasers
– The Bidding-Tendering Process
4
The Target Customer
 The
Export Market
– Government assistance for exporting
– Unique Characteristics of the Foreign Market
– Mechanisms of Exporting
5
Influences External to the Market
 The
Economy
 The Competition
 Legal Restrictions
 Social and Cultural Environment
 Technology
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Influences External to the Market
 Management
of External Influences
– The Influences
 Economy,
competition, legal, socio/cultural,
technology
– The Possible Characteristics
– System to Monitor
– Possible Internal Adjustments
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Developing the Product or Service
 Develop
Product and/or Service Policies
 Decide how the product will be
manufactured
 Understand the product life cycle
– appeal to new target markets, adjust to changes
in customer needs, increase promotion to
increase purchase frequency, emphasize
different uses, offer a new product or service
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Developing the Product or Service
 Determine
–
–
–
–
factors that accelerate adoption
relative advantage
complexity
divisibility
Communicability of results
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Developing the Product or Service
 Understand
how the consumer classifies the
product and/or service
– convenience products
– shopping products
– specialty products
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Developing the Distribution System
 Channel
Options
– manufacturer to consumer (Short-Direct)
– Manufacturer to wholesaler to retailer to
consumer
 Channel
length
– postponement vs speculation
 Channel
Intensity
– exclusivity vs saturation
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Setting the Price for the Good and/or
Service
 Cost-based
Pricing
 Demand-based Pricing
– elasticity
 Competition-based
Pricing
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Promotion
 Types
of Promotion
– Advertising
 types,
–
–
–
–
advantages, disadvantages, suitability, costs
Sales Promotion
Public Relations
Personal Selling
Internet Selling
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Steps in a Promotional Campaign
 1.
Set Promotional Objectives (NUMBERS)
 2. Determine the Promotional target
 3. Understand the Needs and Perceptions of
the Product/Service
 4. Develop the Relevant Theme
 5. Determine the Method or Media to Use
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Steps in a Promotional Campaign
 6.
Develop the Specific Promotional
Message
 7. Set the Promotional Budget
 8. Implement the Program
 9. Evaluate the Effectiveness of the
Promotion
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Appendices
 A. Agencies
Providing Export Assistance
 B. Advertising as Practised by Small
Business
 C. Directories of Trade Shows and
Exhibitions
 D. Checklist for a Marketing Plan
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Concept Checks
 1.
What is Marketing ?
 2. What are the three target markets in
which a small business can segment ?
 3. What three areas should be investigated
before developing an export market ?
 4. What are the most common external
influences that can affect a small business ?
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Concept Checks
 5.
What steps should an owner-manager
follow in working with external influences ?
 6. Explain the significance of the Product
Life Cycle.
 7. When would a small business have
another company manufacture its product ?
 8. What factors can assist speeding up te
adoption rate of new products ?
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Concept Checks
 9.
What are the consumer goods
classifications ?
 10. What are the three main decisions in
developing the distribution system ?
 11. What characteristics help determine the
length of the distribution channel ?
 12. What characteristics require a more
intensive channel ?
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Concept Checks
 13.
What are the three methods of price
setting ?
 14. Define price elasticity.
 15. What are the four methods of promoting
a product or service ?
 16. Identify the steps in developing a
promotional campaign.
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