PowerPoint
Presentations for
Small Business Management:
Launching and Growing New Ventures,
Fifth Canadian Edition
Adapted by
Cheryl Dowell
Algonquin College
CHAPTER 6
Small Business Marketing,
Product, and Distribution
Strategies
6-2
LOOKING AHEAD
After studying this chapter, you should be able to:
1. Describe small business marketing.
2. Explain the term market and methods of forecasting
sales.
3. Identify the components of a formal marketing plan.
4. Define customer relationship management (CRM) and
explain its importance to a small firm.
5. Discuss the significance of providing extraordinary
customer service.
Continued…
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6-3
LOOKING AHEAD
After studying this chapter, you should be able to:
6. Illustrate how technology, such as the Internet, can improve
customer relationships.
7. Identify the key characteristics of consumer behaviour.
8. Explain product strategy and related concepts.
9. Describe the components of a firm’s total product offering.
10. Explain the role of distribution in marketing.
11. Describe the major considerations in structuring a distribution
system.
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6-4
SMALL BUSINESS MARKETING
WHAT IS IT?
• MARKETING
– Activities directing the flow of goods and services
from producer to consumer or user
• SMALL BUSINESS MARKETING consists of those
business activities that relate directly to:
– Identifying a target market
– Determining target market potential
– Preparing, communicating, and delivering a bundle of
satisfaction to the target market
LO 1
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6-5
ESSENTIAL MARKETING ACTIVITIES
• MARKET ANALYSIS
– evaluation process that encompasses market
segmentation, marketing research, and sales
forecasting
• MARKETING MIX
– combination of product, pricing, promotion, and
distribution activities
LO 1
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SMALL BUSINESS
MARKETING ACTIVITIES
LO 1
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MARKETING PHILOSOPHIES
MAKE A DIFFERENCE
• CONSUMER ORIENTED
– all marketing efforts begin and end with customer
– focus is on consumer’s needs
– philosophy is most consistent with long-term success of firm
• PRODUCTION ORIENTED
– emphasizes development of the product and production
efficiencies over other activities
• SALES ORIENTED
– favours product sales over production efficiencies and customer
preferences
LO 1
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6-8
INGREDIENTS OF A MARKET
• A market must have:
Unsatisfied
needs
Purchasing
power
Buying units or
customers
LO 2
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6-9
SEGMENTATION VARIABLES
Variables
Benefit
Geographic
Demographic
Psychographic
LO 2
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LIMITATIONS TO FORECASTING
LO 2
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THE FORECASTING PROCESS
• Breakdown (top down)
• Buildup process (bottom up)
– Calculate market size
– Calculate potential market share
• Production or retail capacity
• Competitive data
– Develop sales forecast
– Adjust to reflect competitive advantage
LO 2
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THE FORECASTING PROCESS
BREAKDOWN PROCESS
LO 2
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THE FORMAL MARKETING PLAN
• MARKET ANALYSIS
• Customer profile
– description of potential customers in a target
market
• Sales forecasts
– “most likely,” “pessimistic,” and “optimistic”
• Competition
– Competitive matrix
LO 3
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MARKETING STRATEGY
1. Marketing
– Decisions affecting the total product
2. Promotional
– Communicating information to the target market
3. Distribution
– Decisions regarding product delivery to customers
4. Pricing
– Setting an acceptable value on the product
LO 3
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6-15
BUILDING CUSTOMER RELATIONSHIPS
Traditional CRM
Modern CRM
• company-wide
business strategy
• designed to optimize
profitability and customer
satisfaction
• focus on highly defined and
precise customer groups
• customers rather than
products
• changes in company
processes, systems, and
culture
• all channels and media
involved in marketing effort,
from Internet to field sales
LO 4
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6-16
ESSENTIAL MATERIALS OF A
SUCCESSFUL CRM PROGRAM
LO 4
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CUSTOMER SATISFACTION
COMPONENTS
1. Providing the most basic benefits
2. Offering general support services
3. Set up a system to counteract any bad
experiences customers may experience
4. Delivering extraordinary services
LO 5
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6-18
CUSTOMER SERVICE CHECKLIST
Exhibit 6-6
• Customers’ experience
• Are we clear in the message we communicate to
customers?
• How do we respond to customer concerns or complaints?
• Do we listen to our customers?
• Do we stand behind our products or services?
• Do repeat customers get treated as well or better than new
ones?
• Are there other customer service activities unique to our
business?
LO 5
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USING TECHNOLOGY
TO SUPPORT CRM
• CRM software programs are designed to help
companies gather all customer contact
information into a single data management
program
– interpersonal contact
– e-mails, letters, faxes
– phone calls
– Internet communication – FAQ, live chats
LO 6
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6-20
SIMPLIFIED MODEL OF
CONSUMER BEHAVIOUR
LO 7
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STAGES IN CONSUMER
DECISION MAKING
PROBLEM RECOGNITION
INFORMATION SEARCH & EVALUATION
Evaluation criteria and Evoked set
PURCHASE DECISION
How and where
POSTPURCHASE EVALUATION
Cognitive dissonance
LO 7
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POSTPURCHASE ACTIVITIES
OF CONSUMERS
LO 7
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PSYCHOLOGICAL FACTORS
social
NEEDS
physiological
PERCEPTIONS
psychological
MOTIVATIONS
LO 7
spiritual
ATTITUDES
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6-24
SOCIOLOGICAL FACTORS
Culture
Reference
groups
Social
class
LO 7
Opinion
leaders
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6-25
DEVELOPING PRODUCT STRATEGY
LO 8
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PRODUCT STRATEGY OPTIONS
Product
strategy
alternatives
Growth
tactics
LO 8
•
•
•
•
•
•
One product/one market
One product/multiple markets
Modified product/one market
Modified product/multiple markets
Multiple products/one market
Multiple products/multiple markets
• Convincing nonusers to become customers
• Persuading current customers to use more
• Alerting customers to new uses for the product
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BUSINESS ANALYSIS
Product’s
relationship to
existing line
Costs of
Development and
Introduction
Available
Personnel and
Facilities
Competition and
Market acceptance
LO 8
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6-28
BUILDING THE
TOTAL PRODUCT OFFERING
Service
mark
Labelling
Trademark
Branding
LO 8
Packaging
PRODUCT
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Warranties
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DISTRIBUTION STRATEGIES
• Distribution:
– physical movement of products
– establishment of intermediary relationships
– to guide and support such product movement
• Physical distribution:
– activities involved in the physical movement
• Channels of distribution:
– intermediary relationships
LO 10
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DISTRIBUTION
ALTERNATIVE CHANNELS
LO 10
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STRUCTURING A
DISTRIBUTION SYSTEM
1.
2.
3.
4.
5.
6.
7.
Cost
Coverage
Control
Transportation
Storage
Materials handling
Delivery terms
LO 10
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