Marketing for SMEs and small businesses
1. introduction
Small business marketing consists of numerous activities, many of which occur even before a product is manufactured and ready for distribution and sale.
Small business marketing consists of those small activities that are directly related to the identification, the determination of the target market and the preparation, communication and delivery of a set of satisfiers to the target market. Product, price, promotion, and distribution activities combine to make up the marketing mix.
2. The role of Marketing in micro, small and medium-sized companies.
A function that, through studies and research, will reveal the production, which is what people (customer) want in a given product, what price they are willing to pay for it and where and when they need it.
Decisions: use of the sales force, allocation of funds for advertising, relationship with distributors and market research.
• Joint decisions with management (price)
• Pricing
• Creation of new distribution channels
• Reorganization of the sales force
• Penetration of new sales areas
The fundamental function is that the manufacturer is supported to achieve sales that allow a fair profit, leaving customer satisfaction and social benefit.
1. Know markets
Market: group of people or consumers who are willing to purchase a specific product or service.
The market can be divided into:
• Real market: part of the market that is actually acquiring goods or services.
• Potential market: One in which it will be possible to sell goods and services, as long as consumers have the capacity and characteristics necessary to make the purchase.
Types of Markets
There are basically two types:
| Types
Market |
Concept | characteristics | Examples |
|
INDUSTRIAL |
It is the one that is formed by consumers who buy to produce or resell. | * Few buyers * More detailed analysis for the purchase * Higher amount of each purchase in volume and money.
* Less marketing activity. |
Market: SteelWood
Paper Plastic Aluminum |
|
OF CONSUMPTION |
It is made up of people who buy to satisfy an immediate need |
* Higher number of buyers * Lower amount in each purchase, the same volume as in money * Higher marketing activity | Market: Dress
Footwear Foods Furniture |
1. Satisfy Markets
• Consumer knowledge What is it? What does it do? What are its expenses? Where do you live? Where do you usually buy the items you consume?
• Socio-economic situation, competitive situation regarding prices, distribution channels, physical distribution, conditions of sale, terms, interests.
• Size of the market. Know sales potential.
• Investigations regarding the product. Publicize a product, inventory review, design impact, packaging, etc…
Generally, the small entrepreneur relies on hunches or intuition to direct his efforts towards customer satisfaction, instead of using, albeit very simple, market research. He offers the products and services that he feels satisfy his customers.
Market research is an activity in which the entrepreneur should not save time or effort in the search for data in information that are useful for the constant process of planning the future direction of his company. The more the entrepreneur knows about the market that he plans to penetrate, or in which he already operates, the greater are his chances of reaching the desired volume of sales.
It is very common for the small businessman to neglect this activity and try to carry out his previously elaborated plans without taking into account the realities of the market.
3. Market research concept
Market research is the means or process of collecting, recording and analyzing data about the specific market to which the company offers its products. These data include the identification of the possible market for the company; the number and income level of potential clients; changes in the interests, tastes and habits of consumers; the practices of competitors; economic guidelines, and all the information necessary to investigate the opinions and attitudes of customers.
It is also the gathering, recording, tabulation and analysis of data related to the different marketing activities.
Main areas of study covered
1. Regarding the market:
o Size
o Location
o Features
1. Regarding the consumer:
• Behavior
• Shopping habits
• Preferences
1. Regarding advertising and promotion:
o Efficacy
o Media selection
1. Other activities:
o Information on the competition and valuation of sellers.
1. Stimulate Markets
Consumer Behavior: It is to know the reasons that consumers have to buy a certain product.
|
Why buy? Reasons for their behavior |
To design the product according to your needs |
|
Where do you buy? Place where you make the purchase |
For distributors to be chosen |
|
When do you buy? Period in which you make the purchase |
To offer the consumer the product in a timely manner |
|
How do you buy? For price, quantity, other conditions |
To determine the form of sale |
|
Who buys? The person who actually buys |
To be able to direct advertising and promotion |
Role of Market Research
1. Determine if you are making a reasonable profit from the market.
2. Decide if you offer a product suited to the demands of your specific market.
3. Determine if the prices of the company's products are compatible with market demands.
4. Identify what aspects of the company are those that please the customer.
Therefore, market research will allow the small business owner to work with facts and not rely on mere assumptions.
4. Market research process
The first objective of market research is to identify the potential customers of the company through the following questions:
Who are my clients? The answer depends on:
a) What type of company do I have?
b) What type of product do I sell?
c) What is the degree of competition that I must face?
Steps in the market research process:
1. Recognition of the problem: It begins with the recognition of a problem, which creates the need for information. This need could be to know the size of a potential market or to determine the effectiveness of your advertising. Problems are often somewhat confusing when faced by the employer. Consequently, the real nature of the problems facing the company or business must first be determined.
2. Research and preliminary planning. Once the marketing problem has been identified, the next step is to conduct a study of the known facts. In some cases the answer can be determined quickly. Others will require additional data. This second step may involve a discussion with people inside or outside the company, reading industry publications, or turning to other sources of information to discover exactly what the facts are required to fully address the problem. At this stage, the employer knows what are the necessary facts or information that are not available to him. Based on this, you can make plans to get the accurate data.
3. Collection of objective information. The focus of marketing research is at this stage, which is to uncover factual information about the problem. The sources of information are varied and depend on the nature of the problem. Data collection technicians, in turn, depend on the sources of information available. By identifying the additional information required, a tool is designed to collect the data. These tools include direct observation, interviews, surveys, questionnaires and the reading of statistical reports. The small business owner generally relies on surveys that he prepares using these tools.
4. Classification, analysis and interpretation of information. After collecting the data, the information should be tabulated, classified, and presented in a useful format, such as charts, tables, graphs, lists, etc. This step allows the analysis of them. A solution is not always clearly evident from the basic factual information applied to a particular problem. When the answer is not obvious, it is necessary to classify and adapt the available data. This requires careful consideration to determine the significance of certain events, their interrelationships, and their implications for the business. In this step the entrepreneur will be looking for the meaning of the facts, so his skill and perception is required to reasonably interpret the information.Also in common sense should be applied at this stage of the investigation.
5. Conclusion. If the investigation is successful, it will lead to some conclusion. In some cases, it can be negative; But still, the entrepreneur will know more about the problem than he did at the beginning of his research. You must logically follow the conclusion, based on the interpretation and reasoning that was made in the previous step. Even when the results of some tangible elements included in the information are not clear or there are gaps, the conclusion must be based on objective data, so that decisions can be made that lead to constructive solutions for the previously identified problem. In addition, a report should be prepared showing the results of the marketing information. This report can be both written and verbal, or perhaps both.
1.4 Maintain Markets
SALES: Organization of resources, allocation and scheduling of human resources (sales force), as well as distribution and financial (product planning, product pricing, physical distribution, distribution channels, sales management, methods of operation of the sale) customer inspection of the product, description of the product through advertising, personalized sale.
SALES PROMOTION: Specific techniques in order to stimulate demand for the product and thereby increase sales by seeking:
• Increase the number of consumers
• Find other legal uses of the product
• Increase the frequency of use of the product
• Sell the items despite the end of the sales season
• Manage product display, product shape and color, and advertising, offering, demonstration, tasting, sampling, direct mail, contests, and gifts.
ADVERTISING: Establish a relationship with a large number of potential buyers to whom the idea (product information) is presented in order to influence them to buy the product.
PROPAGANDA: Diffusion of ideas.
ADVERTISING: Helps to sell the product, radio, television, cinema.
PUBLIC RELATIONS: Administrative function that investigates the opinion of the public affected by the company, creates a good image of the company to attract the understanding and goodwill of these publics, its benefits are:
• Create prestige
• Promote sales
• Prevents and solves problems of a labor nature
• Dispels prejudices that exist against the company
• Education to the public about what the company is
• Research of public opinion
Factors determining the size of sales:
• The number of clients who regularly visit a company or business is a function of the distance between where they reside and where the company or business is located.
• The number of customers that go to a company varies in proportion to the breadth and selection of the business's product inventory.
• The distances that customers are willing to travel to reach different shopping areas vary according to the different types of products offered in each area.
• The attraction of a particular company or business is influenced by the proximity of competing companies or businesses.
2) Suppliers Competition as a Market Strategy.
Three traditional marketing philosophies are:
1. Production oriented.
2. Sales oriented
3. Consumer oriented
A production-oriented philosophy highlights the product as the most important part of the business.
A sales-oriented philosophy downplays efficiencies in production and consumer preferences in favor of achieving sales. Finally, a consumer-oriented philosophy expresses the company's belief that all types, including production and sales, depend on the needs of the consumer.
A small business must start with a consumer orientation, as this philosophy is the most consistent with success.
Entrepreneurs can make marketing decisions based only on their intuition, or they can supplement their judgment with extensive market information. In any case, it is advisable to put business emotion about a product or service on the refrigerator, until the facts of the market research have been captured and evaluated.
A small business often conducts less market research than a large business, partly because of the expense involved, but also because of a lack of understanding of the basic research process.
The Internet is an excellent resource for market research data, most of the information found there is free. Valid information is obtained without having to pay a research firm.
Although an entrepreneur can conduct market research without the support of an expert, the cost of hiring such an expert is often money well spent.
Homeowners should ask themselves the following questions:
1. Is research really necessary?
2. Will the data obtained justify the expense?
3. Can I do the research myself?
For example, an entrepreneur looking for a location for a restaurant can conduct a survey to determine the menu preferences of customers and the reasons for selecting one of them, in fact, the most relevant information would be how often they eat out. residents of the target area.
Entrepreneurs are often unaware of the reality of competition in their new ventures, believing that the market contains no close substitutes or that their success will not attract other entrepreneurs. This is simply not realistic. Similarly, related products that are actually sold or tested by competitors should be looked at.
5. Marketing strategies.
It is clear that the nature of a new business venture has a direct impact on the importance given to each area. For example, a service business will not have the same distribution problems as a product business, and the promotional challenges of a new retail store are quite different from those faced by a new manufacturer.
Components of a formal marketing plan.
The marketing plan should include sections on market analysis, competition and marketing strategy, the analysis should include a customer profile.
Four areas of marketing strategy that should be included in the marketing plan are decisions that affect the total product or service, pricing decisions, promotional decisions, and distribution decisions.
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