Marketing Techniques for Small Business
TODAY’S TAKEAWAYS • What’s ahead for Small Businesses in Zimbabwe? • What is Marketing? • Customers – know them, love them and find more of them. • The 5 Step Marketing Plan • What’s your next step?
WHAT IS MARKETING? • Marketing is the process through which you create – and keep – customers. • It’s the matchmaker between what your business is selling and what your customers are buying. • It’s not about talking to your customers, it’s about talking with them?
Entrepreneurial approaches to Marketing driving business growth, ensuring sustainability
Why is SME Research Important? • Micro, small and medium-sized enterprises (SMEs) are socially and economically important, they represent 60% of Zimbabwe’s GDP • They provide around 2 million formal and informal jobs representing two-thirds of all employment. • SMEs contribute up to 80% of employment in some economic sectors e.g. agriculture
SME growth and Entrepreneurial Marketing • This presentation presents ideas for marketing for Small Businesses based on current research and, key concepts and theories • The focus of this presentation is on small businesses and, • Using Entrepreneurial Marketing (EM) approaches • As such we challenge traditional notions of marketing & management theory and practice. • How? • The presentation reports on the issues for small business; and addresses some of the issues facing business owners, managers and marketers in contemporary business environments.
Small Business Constraints • Lack of time to manage• Lack of business resources- finance, employees, marketing experience • Difficulty in predicting future market changes-market research costsmarketing & business planning- especially in fragmented/highly competitive markets • Limited geographic scope in large markets because of size
The Entrepreneurial Marketing perspective• Global research in different sectors and markets • Globalization, developing regions, new economies, sustainability through economic crises, e-business. • We have learnt from what successful growth focussed firms do- i.e. differentiation of products/services, niche markets, blue ocean strategies
Cows, after you’ve seen them for a while, are boring. They may be perfect cows, attractive cows, cows with great personalities, cows lit by beautiful light, but they’re still boring. A Purple Cow, though. Now that would be interesting. – Seth Godin, 2002
Gardner (1994, p. 37) :
‘‘the interface of entrepreneurial behaviour and marketing is that where innovation is brought to market. Marketing’s role in innovation, then, is to provide the concepts, tools, and infrastructure to close the gap between innovation and market positioning to achieve sustainable competitive advantage.’’
Traditional Marketing• Perception of Marketing- the 4 Ps of Marketing- produce/product, price, promotion, place. • Successful marketing in SMEs is different! • Common perception of marketingadvertising and promotion- fliers, newspaper advertising, exhibitions etc. • Here- we cover key salient points for SME Marketing-
Entrepreneurial & SME Marketing • Relationship Marketing • Getting close to your customer/markets • Leading customers- co-creation- incremental/ radical innovations • Networks- business, innovation, marketing, industry, personal contact networks (PCNs) • Opportunity seeking- new markets, extended product/service lines, shared opportunities, partnering, alliances • Reputation effects- branding for small business
Cost-effective Marketing Strategies • Most new ventures and small firms have limited budgets for marketing (finding new business) • Interesting approaches for cheap, aggressive marketing techniques (Schindehutte et al., 2009- examples of guerrilla marketing etc.) • Most small businesses are highly customer oriented particularly if the market offering is service based.
Relationship Marketing• Can be a positive benefit- long term relationships bring stable, regular income, repeat custom and word-of-mouth (e-marketing- word-of mouse!) • Also-it is cheaper to retain current customers than find new ones • Use of websites , social networks and Customer Relationship Management (often under used)customer feedback provides very useful market research (!), regular customer contacts for new promotions etc • However too much focus CAN be a risk if not carefully managed (costs your firm money, can inhibit creativity and innovation) • Power of the customer- example- retention of long terms contracts/ renewing/ public sector and the
Market emersion • Advantage of SMEs- do not have to be artificially close to your customer as with large firms • Large firms now emulating what small firms doi.e. same contact person on the phone etc. • Can respond swiftly to customer preferences (unlike large firms) • Local, technical knowledge developed over timeretention of tacit knowledge in your company • Local ‘embeddedness’ in industry networks
Leading customers • US and Scandinavian research (large scale). Found that those high growth firms ‘lead’ customers • Examples- co-creation- development of adapted products for business customersresell to other similar businesses- the customer an advocate, agent or re-seller • Adaptations to current products/servicesretains customers, extends product portfolio, reaches new markets and new customers (i.e. same product new market, same market new product) • Replication- can you easily replicate your product or service for other new customers to reduce development costs?
Networks • Resource leveraging- valuable to small businesses and new ventures- networksfound to increase business, innovation, marketing in small firms. • Personal contact networks (PCNs) • Networks with competitors & customers
Networks-Gilmore et al., 2001 • Managerial implications: • Marketing by networks improved by, learning by experience • Social networks rely on entrepreneur’s intuition • Later, more strategic business networks rely on rigorous, structured, experiential knowledge • Therefore: networking can be harnessed into a proactive marketing infrastructure & • Network competence can be learned, refined & developed by experience
Opportunity seeking• Shared opportunities, partnering, alliances • Opportunities- new markets/customers; new and/or extended product/service lines • Industry networks-business partnerships, alliances, i.e. partnering with a larger well known company- provides a well known established ‘brand’ and opportunities for costsharing, knowledge sharing and co-branding of products/services. An indicator to customers that the SME is an established market player= credibility
Reputation- branding for SMEs • Branding may be less or more important depending on product/ service/ sector • Formal branding is prohibitively expensive • Awareness of branding messages, colours, strap-lines etc on all business & marketing material and web-sites • The owner-manager is often the representative of the culture and ethos of the company – as with famous owner’s i.e. Strive Masiiwa who is indistinguishable from the Econet brand and what this means. • Reputation for delivering ‘customer value’ -often quality and reliability and the notion of ‘trust’ is key
TIME TO CUT MARKETING? • When things get tough economically for a business, what’s the first thing to go? • What do we need more of in tough times? • What was the definition of marketing? • Why would you cut that part of your business plan? • What would your banker say?
What’s ahead for small businesses?
WHAT’S AHEAD FOR SMEs? • Growth in a predominantly informal economy?
WHAT’S AHEAD FOR SMEs? • Best way to market?
WHAT’S AHEAD FOR SMEs?
• Online marketing/ Social Network Marketing ?
WHAT’S AHEAD FOR SMEs? • Why not invest in marketing?
WHAT’S AHEAD FOR SMEs? • What influences what media you use in your marketing?
WHAT’S AHEAD FOR SMEs? • Why advertise?
WHAT’S AHEAD FOR SMEs? • What media will you use?
WHAT’S AHEAD FOR SMEs? • How effective are the media?
WHAT’S AHEAD FOR SMEs? • Marketing beliefs?
Marketing Basics?
Marketing – the whole is greater than the parts! The Marketing Process
MARKETING BASICS Customer, Product and Competitive Research
Customer Service
Product Development
Pricing
Marketing Wheel of Fortune
Sales
Packaging
Advertising, Promotion and PR
Distribution
SMART MARKETING TIPS • Get to know your target customer and your marketing environment. • Tailor your product, pricing, packaging and distribution strategies to address your customers’ needs, your market environment, and the competitive realities of your business. • Create and project marketing messages to grab attention, inspire interest, and move your prospects to buying decisions. • Go for and close the sale – but don’t stop there.
SMART MARKETING TIPS • Once the sale is made, begin the customer service phase. Work to ensure customer satisfaction so that you convert the initial sale into repeat business and word-of-mouth advertising for your business. • Talk with customers to gain input about their wants and needs and your products and services. Combine what you learn with other research about your market and competitive environment and use your findings to fine-tune your product, pricing, packaging, distribution promotional messages, sales and service.
THE CIRCUS EXAMPLE • Advertising. Marketing. Sales. Promotions. What are the differences? – If the circus is coming to town and you paint a sign saying “Circus Coming to the Fairground Saturday,” that’s advertising. – If you put the sign on the back of an elephant and walk it into town, that’s promotion. – If the elephant walks through the mayor’s flowerbed, that’s publicity. – And if you get the mayor to laugh about it, that’s public relations.
THE CIRCUS EXAMPLE – If, before painting the sign that says “Circus Coming to the Fairground Saturday,” you check community calendar to see whether conflicting events are scheduled, study who typically attends the circus, and figure out how much they’re willing to pay and what kinds of services and activities they prefer, that’s market research. – If you invent elephant ears for people to eat while they’re waiting for elephant rides, that’s product development.
THE CIRCUS EXAMPLE – If you create an offer that combines a circus ticket, an elephant ear, an elephant ride, and a memory-book elephant photo, that’s packaging. – If you get a restaurant name Elephants to sell your elephant package, that’s distribution. – If you ask everyone who took an elephant ride to participate in a survey, that’s customer research.
THE CIRCUS EXAMPLE – If you follow-up by sending each survey participant a thank-you note along with a twofor-one coupon for next year’s circus, that’s customer service. – And if you use the survey responses to develop new products, revise pricing, and enhance distribution, then you’ve started the marketing process all over again.
All about Customers.
Know your customers – love them, find more of them! Your Customer Profile
ALL ABOUT CUSTOMERS • Every marketer mulls the same questions: – – – –
Who are my customers? How did they hear about me? Why do they buy from me? How can I reach more people like them?
• Remember, business owners don’t work for themselves, they work for their customers.
ALL ABOUT CUSTOMERS • Anatomy of a Customer – Geographics – where they come from. – Demographics – age, gender, education, income, etc. – Psychographics – segmenting by lifestyles, purchasing behaviors, beliefs about themselves, families and society – Geodemographics – a combo of all three of the above – lifestyle marketing.
ALL ABOUT CUSTOMERS • Collect data on your customers – Address, payment methods & patterns, family set up, tastes – Surveys – Observation – Contests – Track response to your ads – Web reports – Focus Groups
ALL ABOUT CUSTOMERS • Use the data you collect to develop your marketing plan. – What media are good matches for these primary and secondary customer targets? – What partnerships or events could you partner with to reach more of your customers? – Knowing what the customers’ interests are and what they spend their money on, what other marketing opportunities are out there?
The Marketing Plan It’s not just a piece of paper. Five easy steps to make a difference in your business.
THE MARKETING PLAN • Marketing Plans are not just for the big guys. • Not something that’s bound and put on a shelf for all to see and cherish forever! • A good, solid marketing plan can be done on one sheet of paper – maybe two – if you have to.
THE MARKETING PLAN • Five Easy Steps – – – – –
State your business purpose. Define your market situation. Set goals and objectives Outline your strategies, then your tactics. Establish your budget
• Blueprint your plan – and use it! • The One-page Marketing Plan
THE MARKETING PLAN • What media to use? – PRINT – newspapers, magazines, directories, direct mail – BROADCAST – television (network and cable), radio – OUT-OF-HOME – transit, billboards, murals, signage – SPECIALTY – logo merchandise, schwag – DIGITAL – Internet, e-mail, interactive, websites
• Advantages and Drawbacks
YOUR NEXT STEPS? • What will you do during these ‘tough times?’ What would your banker say? • How will you ‘know’ your customers better so you can attract more of them? • Will you implement a marketing plan and not let it set on the shelf? – 90 Day Plan – 6-month Plan – 12-month Plan