Marketing in Small Businesses
Small firms can be described as independently managed businesses, which are of less importance in the industry. In such enterprises, there are less than 100 employees. Besides, they are more innovative as compared to large organizations. Despite the fact that they can make decisions fast, small enterprises are limited by finances, managerial resources, and market power. Their marketing strategies are considered informal, unstructured, and loose (Travedi 21). They also perceive marketing as the other name for selling central concepts of advertising.
Entrepreneurial marketing refers to merchandizing conceded by owners or managers of entrepreneurial businesses. Its concept mainly concentrates on advancement of innovations and ideas with instinctive comprehension of promotion desires. Administrators primarily target clients via a bottom-up method. As a result, gathering informal data through personal networks as opposed to market intelligence is common in entrepreneurial marketing.
Marketing is a way of informing clients about an organization. In small businesses, marketers focus on generating customer relationship. They do so with the aim of making sales because their survival depends on such transactions. Nevertheless, there is no clear way of explaining merchandizing in such organizations. Instead, customer orientation enhances their performance (Lackman and Lanasa 100). Markedly, marketing thoughts vary depending on the size of a company and customer markets. Owner’s experience, attitude, and expertise also determine the promotion practices. Typically, service marketing assumes the 7P’s, namely, product, place, price, people, promotion, physical evidence, and process. Entrepreneurs also stress on the importance of the 4I’s, which include innovation, information, identification, and interaction (Lackman and Lanasa 99). A firm’s performance is not only dependent on products and the market but also commercializing the commodities. Innovation is also linked to the marketing function.
Approaches that contribute and reflect small enterprises marketing include innovative, network, competency commercialization, and adoption of the normal textbook retailing contexts. Most small companies are inventive on commodities as they produce merchandises that are slightly distinct from others. Principally, new ideas try to respond to the demands of clients (Knight 15). Therefore, innovation marketing is not just product modification. Instead, it covers a bigger spectrum. It is probable to have significant changes or reforms in other phases of marketing activities than in a product or service. Notably, the use of the four dimensions, namely, competences, networking, innovation, and adapting marketing apparatus add to the exclusive characteristic of a company.
The merchandizing strategies for small firms are derived from marketing mixes, segmentation, and positioning. The most important of all is the first one. The tactics the business should consider adopting are the niche strategy, vertical integration, and competition approach. The niche method focuses on being accessible for small firms, and hence provides alternatives to compete with large organizations. However, the strategy is not advisable in the long run. The horizontal integration connects resources of small firms within the same sector. The accrued capital allows companies to compete with big enterprises (Knight 14). On the contrary, vertical integration focuses on collaboration of firms in the same value chain. Large corporations invent the strategy while small ones are left with the prospect of adopting related approaches. The latter can also opt for the long-term outlook with respect to the value chain. The approach helps such firms influence their position. In contrast, the competition strategy involves contending with rival companies.
You and I restaurant, a local eatery, understands the value of marketing and is willing to invest in it to drive growth. After a one-on-one interview with the owner, it is apparent that the enterprise should adopt the five-Ps to remain competitive.
Positioning defines the essence of businesses. It includes drafting the mission and vision statements, values, market positioning, core principles, and competitive differentiators. The mission statement explains the existence of the restaurant and what difference it brings for others. The vision statement shows its dream. In drafting the latter, it is important to consider the expected size of the enterprise and the services it plans to offer. The statement should be drafted in a way that clearly shows when it will be achieved. Values are the guiding principles and are the factors the eatery is willing to be accountable for in the course of business (Knight). It is worth noting that core principles represent enterprises’ area of specialization, strengths, and the attributes that define them in the public’s eye. Competitive differentiators are the factors that distinguish the restaurant from others. In other words, they are the elements that make clients to choose the business over others. Marketing positioning explains how the bistro wants its services to be positioned. The leadership of the enterprise should determine the best positioning based on its competitive advantage. Notably, such may include factors like the best quality provider or low price leader.
Product mix involves listing products and services a business offers. It also entails carrying out a SWOT analysis to determine the strengths, weakness, opportunities, and threats of a company (Travedi 22). In light of the restaurant, the task should include an analysis of new clients obtained in a particular year, the ratio of fresh to old business, and the number of employees, who are able to sell the foodstuffs. Moreover, it ought to consider the number of customers, who are contented and are using its services and the income obtained from each product or service.
In this case, place entails determining ideal customers and the area, where the business will sell its services and products. The client base is identified by assessing the wealth, income, the age, gender, and culture, of the potential consumers the restaurant intends to serve. It also involves establishing their tastes and preferences.
Pricing involves the methods a business adopts in fixing the cost of its products or services. The restaurant may employ cost-plus pricing, value-based pricing, and packaging to set the value of its commodities.
Cost- Plus Pricing. The approach involves setting prices depending on the cost incurred to produce the product or offer services.
Value-based Pricing. The technique involves setting prices based on the difference a commodity intends to bring to clients. In this case, the amount is not influenced by production expenses, but to what a customer gains by using the commodity as well as its availability.
Packaging. The approach involves determining how the enterprise will pass products to its clients. It determines whether such commodities will be offered individually or packaged.
Endorsement comes after all the other P’s have been achieved. However, many companies start with it. In promoting their products, businesses, whether small or large, should understand their customers to determine the right channel. You and I restaurant can either use websites, advertising, networking, public relations, conferences, seminars, tele-prospecting, and surveying (Travedi 21). Markedly, advertisements should be conveyed with the intention of reaching clients with a message of the firm’s positioning. The marketing activities should be invested if it includes four main audiences: existing customers, internal staff and leaders, referral sources, and prospective clients. Certainly, the restaurant’s promotional activities will support its strategies if it follows the four P’s in the right order.
Knight, Gary. “Entrepreneurship and Marketing Strategy: The SME under Globalization.” Journal of International Marketing, vol. 8, no. 2, 2000, pp. 12-32.
Lackman, Conway, and John M. Lanasa. “Competitive Intelligence and Forecasting Systems: Strategic Marketing Planning Tool for SME’s.” Atlantic Marketing Journal, vol. 2, no. 2, 2013, pp. 98-110.
Travedi, Jay Y., “A Study on Marketing Strategies of Small and Medium Sized Enterprises.” Research Journal of Management Sciences, vol. 2, no. 8, 2013, pp. 20-22.