Unit 5
Marketing for the Small
Business
Small Business Operations
What is Marketing?
 Marketing is the creation
and maintenance of
satisfying exchange
relationships. Marketing, 3e,
page 9
 The marketing concept
is using the needs and
wants of customers as
the primary focus of all
business decisions –
satisfying customers
while making a profit.
Marketing, 3e, page 19
Frameworks 5.1
The Marketing Mix
The elements of marketing, also known as
the marketing mix or the 4 P’s, are:
– Product
– Price
– Place/Distribution
– Promotion
Source: Marketing, 3e, pages 22-23
Frameworks 5.2
Product
 The product is anything
offered to the market by
the business to satisfy
customers needs,
including services, ideas,
events, and places.
Source: Marketing, 3e, pages 23
Frameworks 5.2.2
Price
 The price is the amount that customers pay for
the product or service.
Source: Marketing, 3e, pages 23
Frameworks 5.2.2
Calculate Product Price
Fruit Smoothie 46 ounce bottle = $ 9.76
Sales tax (8%) = 9.76 x .08 = .78
Cost Plus Tax = $10.54 per bottle
$10.54 divided by 46 ounces = .23 per ounce
.23 x 4 ounces per cup = .92 per cup
.10 cost for cup
.02 cost for lid
TOTAL COST = $ 1.04 per cup
Markup 140% = $1.04 x markup (1.40) =
$1.46 + $1.04 = $2.50 retail price
Place or Distribution
 The place or distribution includes the locations
and methods used to make the product available
to customers.
Source: Marketing, 3e, page 23
Frameworks 5.2.2
Promotion
 Promotion includes the methods used and information
communicated to encourage customers to purchase
and to increase their satisfaction. Marketing, 3e, page 23
 Viral marketing is a
promotional approach
that encourages people
to pass along a
marketing message by
word-of-mouth. The
internet has allowed
viral marketing to have
an almost immediate
impact. Marketing, 3e, page 599
Frameworks 5.2.2
The Product Mix
 A product line is a group of similar products with
slight variations in the product mix to satisfy different
needs in the market. Marketing, 3e, page 287
 A product assortment is the complete set of all
products a business offers to its customers. Marketing, 3e,
page 287
Frameworks 5.2.3
Evaluate the Product Mix of the SBE
 Is the product mix appropriate for the target
market?
 Should any products be deleted from the product
mix?
 Are there any products that should be added to the
product mix?
 Should additional services be added to make the
purchase of products easier or more enjoyable?
Example: What is the feasibility of a delivery
service or an on-line component of the SBE?
Frameworks 5.2.3
Competitive Strategies
 Competition is the rivalry among businesses for
consumers’ dollars. Business Principles and Management, 12e, page 65
 Price competition is the rivalry among businesses
based on price and value. Marketing, 3e, page 196
 Non-price competition occurs when businesses
compete on factors other than price. Marketing, 3e, page 196
– Atmospherics are the elements of the shopping environment
that are appealing to customers, attract them to a store, and
encourage them to buy. Marketing, 3e, page 384
– Visual Merchandising is the coordination of all the physical
elements that are used to project the right brand image to
customers. www.retailindustry.about.com
Frameworks 5.3 & 5.4
The Role of Competition in Business
Competition forces businesses to offer
reasonable prices.
Competition encourages businesses to improve
existing products and add benefits and features
to their product offerings.
Competition forces business to continuously
search for new product ideas.
Competition offers consumers the benefit of a
wide variety of products from which to choose.
Source: Marketing, 3e, pages 197-198
Frameworks 5.3.2
The Importance of Atmospherics
Frameworks 5.4.2
The Importance of Visual Merchandising
Frameworks 5.4.2
Developing Relationships with Customers
 Relationship marketing
focuses on developing loyal
customers who continue to
purchase from the business
for a long period of time.
Marketing, 3e, page 27
– Build trust with the customer.
– Communicate with customers
to determine the best products
and services to meet their
needs.
– Immediately solve problems
encountered by the customer.
Some Harley-Davidson customers
are so loyal to the company that they
have tattooed themselves with the
company’s brand name.
Frameworks 5.5.1
Personal Selling
 Personal selling is direct, faceto-face contact, with potential
customers to assess their needs
and satisfy those needs. Marketing,
3e, page 477
– Greet the customer.
– Determine needs – observe,
question, listen.
– Demonstrate/present the product.
– Answer questions.
– Suggestion selling.
– Follow up.
Source: Marketing, 3e, page 493
Frameworks 5.6.1
Personal Selling - continued
 Suggestion selling is offering
additional products and
services after an initial sale in
order to increase customer
satisfaction. Marketing, 3e, page 497
– A customer who purchases
notebook paper and a 3-ring
binder might also need a pencil
or an ink pen.
– A customer who purchases a
handbag might also enjoy
having a matching wallet.
Frameworks 5.6.1
Personal Selling - continued
 Substitute selling involves
suggesting items other than the
original request when the
original request is not available.
– Never tell the customer that what
they’ve requested is unavailable
without offering a similar product
as a substitute.
– If the school based enterprise is
out of frozen mocha mix, offer the
customer a “refreshing and
healthy” all fruit smoothie.
Source: Marketing Essentials, 2009, pages 321-323.
Frameworks 5.6.1
End of Unit 5
 Visit the website www.quizlet.com to review the
terms associated with this unit of instruction.
 If you have not already done so, create an account with
Quizlet.com.
 Use your first and last name (without a space) as your
login.
 Use your first name (or anything you can remember!) as
your password.
 Using the Quizlet.com search feature, search for
cdorman and find Mr. Dorman’s dashboard.
 Open the Subjects folder “Small Business Operations.”
 Study the flashcards.
 Use the test feature and use the scatter feature.