MARKETING THE SMALL BUSINESS Marketing is the function concerned with planning and implementing the conception, pricing, promotion, and distribution of products or services that will satisfy the firm's objectives. SMALL BUSINESS AND THE MARKETING CONCEPT The marketing concept provides a guide to small business. It indicates that a match must be made between its intended customers and the firm's product or service offerings. To achieve the desired match, the following questions must be answered: 1. Who are my customers? 2. What products or services are needed by my customers? 3. At what price are the products or services required? 4. At what place are the identified products or services required? 5. At what time are the identified products or services required? 6. At what mode of delivery are the identified products or services required? SMALL BUSINESS AND THE MARKETING CONCEPT To provide answers to the questions cited, the firm must undertake the following: 1. 2. 3. 4. Devise a marketing strategy; Engage in marketing research; Develop a marketing mix; and Identify the size of the target market. DEVISING A MARKETING STRATEGY ✓ Marketing strategy is the general guide the SBO will use to achieve the firm's marketing goal. ✓ It is a plan for getting products and services into the hands of customers in a timely, cost-effective, and appropriate manner. ✓ An applicable marketing strategy can be devised after a systematic market strategy planning is undertaken. MARKETING STRATEGY PLANNING ✓ Market strategy planning is a small business activity which seeks to find attractive opportunities and develop profitable marketing strategies. ✓ The strengths and weaknesses of the firm are recognized in strategy planning. ✓ This is followed by an analysis of the external environment which is useful in identifying attractive market opportunities. MARKETING STRATEGY PLANNING The output of market strategy planning is the firm's marketing strategy and it contains the following: 1. the target market; 2. the applicable marketing mix; and 3. the size of the market area. The Market Strategy Planning Process • Identify strengths and weaknesses of the firm • Analyze external environment • Identify attractive market opportunities • Identify target market • Determine applicable marketing mix • Determine size of market area TARGET MARKETING Target marketing refers to the activity of selecting well-defined groups of potential customers and tailoring a marketing mix to their needs and preferences. In target marketing, the following steps are undertaken: 1.identification of the target market; 2.identification of the characteristics of the target market; and 3.measurement of the size of the target market area. TARGET MARKETING IDENTIFICATION OF THE TARGET MARKET A target market is defined as the particular market segment the firm wishes to serve. Before Deciding on the Target Market The firm could be any of the following: 1. a mass market company - which sells goods and services to a broad spectrum of buyers; 2. a market-segment company - which aims to sell to a single market segment; Or 3. a multi-segment company - which aims to sell at two or more distinct market segments. TARGET MARKETING IDENTIFICATION OF THE TARGET MARKET Choosing the Target Market. When deciding on which market segment to reach, it is necessary for the SBO to consider the following: 1. 2. 3. 4. 5. 6. 7. the goods or service category of the firm; the firm's goals; what competitors are doing; the size of the various segments; the relative efficiency of each segment to the firm; the resources required; and other factors TARGET MARKETING IDENTIFYING THE CHARACTERISTICS OF THE TARGET MARKET ✓ To effectively serve the target market, its characteristics must be known to the SBO. ✓ Relevant characteristics will refer to any of the following: age, sex, family size, family life cycle, income, occupation, religion, race, and nationality. TARGET MARKETING MEASURING THE SIZE OF THE TARGET MARKET AREA In the attempt to make a match between the firm and the target market, the SBO must be provided with information about the following: 1. the number of potential customers, and 2. the population growth trend of the target market area. Sample Footer Text 15 Sample Footer Text Planning business prospects and strategies requires complete and correct information; potential customers, competitors and market characteristics. This can only be done in a systematic manner through market research. Entrepreneurs must be futureoriented. They must anticipate future changes in the market to be able to \ adjust their business. Hence the need for a continuous market research. 16 Sample Footer Text The best ways to evaluate business opportunities is to conduct a market research. This is systematic and scientific. An entrepreneur can only make the right decisions if he has the right data about the needs and resources in the community. 17 Sample Footer Text 2/7/20XX Can be defined as the process of gathering, analyzing and interpreting the information about the products or the services to be offered for sale to the potential consumers in the market (De Guzman, 2018, p. 25) 18 STEPS IN MARKET RESEARCH Defining the problem Making a preliminary investigation Implementing and evaluating decisions Planning the research Reaching a conclusion/ decision Gathering the data Analyzing the data 19 Sample Footer Text Profitable markets Saleable products/services USES OF MARKET RESEARCH Strengths and weaknesses of competitors Available of resources Business risks 20 Sample Footer Text Trends in consumer tastes and preferences Better marketing and strategies USES OF MARKET RESEARCH Proper business location New market opportunities Realistic business objectives 21 Sample Footer Text LOCATION OF THE BUSINESS The location of the enterprise is a vital factor in the success of a business. • A prime location is a great competitive advantage. • All other things being equal, the one with a better business location gets the maximum business. However, location of the customers may be the most critical factor. 22 Sample Footer Text LOCATION OF THE BUSINESS Here are the more basic factors in selecting a business location: - Population trends - Income trends - Consumer characteristics - Retail sales trends - Competition - Transportation facilities - Government policies 23 Sample Footer Text LOCATION OF THE BUSINESS Here are the more basic factors in selecting a business location: - Environment (health and sanitation) - Electricity - Water supply - Communication facilities - Peace and order - Fire protection - Parking space 24 THE MARKETING MIX The purpose of target marketing is to develop a marketing mix that is appropriate for the company. Marketing mix refers to the set of marketing tools that the firm uses to pursue its marketing objectives in the target market. The marketing tools are the controllable variables that when properly blended constitute the marketing mix. THE MARKETING MIX The controllable variables are the following: 1. product offering (including the breadth of the product line, quality levels, and customer services); 2. price; 3. place (or distribution); and 4. promotion (advertising, sales promotion and salesforce decision). THE MARKETING MIX PRODUCT OFFERING THE MARKETING MIX PRICE THE MARKETING MIX PLACE THE MARKETING MIX PROMOTION PROMOTING SMALL BUSINESS WHAT IS PROMOTION? Promotion may be defined as activities, including advertising, personal selling, sales promotions, public relations, and direct marketing, used by SBOs to persuade prospective customers to buy the company's products or services. PROMOTION AND CUSTOMER DEMAND TYPES OF CUSTOMER DEMAND To understand the value of promotion, it is important for the SBO to know the types of customer demand. They are the following: 1. established demand, and 2. newly created demand (also referred to as promoted demand). TYPES OF CUSTOMER DEMAND Established Demand. This type of customer demand refers to purchases made by people from a certain firm as a result of any or all of the following: 1. positive experience with the firm's products; 2. the convenient location of the firm; and 3. the attractive appearance of the firm. Even without the use of promotion, established demand will materialize. TYPES OF CUSTOMER DEMAND Newly Created Demand. When the firm engages in activities designed to attract people to buy from the firm, the resulting demand is called newly created demand. This is also sometimes referred to as "promoted demand.“ Successful promotional activities made by some firms are able to create new demand. METHODS OF PROMOTION 1. 2. 3. 4. 5. advertising personal selling publicity sales promotion word of mouth METHODS OF PROMOTION 1. ADVERTISING • Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, and services by an identified sponsor. METHODS OF PROMOTION 2. PERSONAL SELLING • method of promotion that is direct, personal, and often a face-to-face interchange between the company's salesperson and the consumer. Selling is a process consisting of the following major steps: 1. prospecting and qualifying; 2. pre-approach; 3. approach; 4. presentation and demonstration; 5. handling objections; 6. closing; and 7. follow-up. METHODS OF PROMOTION 3. PUBLICITY • Publicity is a method of promotion where news is generated about the firm or its products or services and appearing in print, broadcast, or electronic media and not paid for by the firm. • The publicity release will be published free by the various media if they are found to be interesting or newsworthy. METHODS OF PROMOTION 4. SALES PROMOTION • Sales promotion is a method of promotion other than advertising, personal selling, and publicity that increase sale through temporary sales incentives. • Sales promotion enhances and supplements the other forms of promotion. METHODS OF PROMOTION 5. WORD-OF-MOUTH • Word-of-mouth is a method of promotion wherein people are encouraged to tell other people products or services they have enjoyed. When people have positive experiences about a product or service, they have a tendency to relate these to other people.
