51957591.doc: Small Business Marketing
Reading 10:
Small Business Marketing
Objectives
On completion of this topic you should be able to:(a)explain the marketing concept.(b)identify needs and sources in marketing research.(c)develop and assess marketing strategies for small business.(d)identify problem areas in marketing by small business.Prescribed Readings
Text:
Topic 9.
Selected Readings:
Manly, I., 'Marketing - Its role in small business'.
Other References
Broom, H. N., Longenecker, J. G. & Moore, C. W.,
Small-Business Management,
6th edn, pp.94-142,210-304.Carson, D. et al.,
Marketing & Entrepreneurship in SMES.
Dixon, B. et al.,
Effective Small Business Management,
pp. 241-92.English, J. W.,
How to Organise and Operate a Small Business in Australia,
6th edn, pp. 1 13-26,167-216.Perry, C. & Pendleton, W.,
Successful Small Business Management,
2nd edn, pp. 168 - 201.Ratnatunga, J. & Dixon, J. (eds),
Australia and New Zealand Small Business Manual,
3rd edn,pp.97-122,175-92.Scarborough, N. M. & Zimrnerer, T. W.,
Effective Small Business Management,
pp.533-626.Sondeno, S. R.,
Small Business Management Principles,
pp. 184-257.
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51957591.doc: Small Business Marketing
10.1 Introduction
Recognising that many students in this Unit have not studied Marketing and therefore have a limitedunderstanding of this integral function of managing a small business, two weeks are allowed for coverage of this Topic and we will first consider some introductory information.
10.11 The Marketing Concept
Marketing is not just another name for selling. In the past most firms had a strong production or sales orientation, and many still do, but since the 1960's the emphasis has swung to
achieving thefirm's objectives through satisfying wants and needs of the consumer
In other words, a consumer orientation - identifying, anticipating and satisfying wants and needs rather than strategies to sellwhatever is being produced.Marketing includes selling, but only as one of all the activities which assist matching of consumer wants and needs with the firm's products Or services. This must be done profitably of course, toensure the business continues to exist, and it must become sufficiently profitable for the smallbusiness-owner to consider it worth the effort and risk. Yet marketing should be an orientationwhich pervades all aspects of the firm's operations, e.g. research and development, purchasing,manufacturing, finance, accounting, personnel, etc.
10.12 Small Business Advantages
Small business has some important advantages over big business in marketing. Its management isusually much closer to customers, and therefore more able to personally assess their needs andwants, more able to personally give them service within each functional area, even products tailoredto individual preferences. In larger firms the various functional areas sometimes make the mistakeof behaving as if each were separate entities, rather than interrelated and dependent on each other,and this attitude works against the practical implementation of the marketing concept. In smallbusiness, all functional areas are usually the responsibility of one or two persons, so consumer orientation is less likely to be overlooked in decision-making in any area. This is a valuableadvantage for a small business, and can offset the disadvantages of its size.For any business to maximise its performance - even if it has a virtual monopoly within its targetmarket - it needs to seriously and continually analyse its marketing. Small business may not haveall the resources of its larger competitors but has, as invaluable advantages, the personal touch andeasier flexibility to adapt to changing demands, provided the principals have that marketingorientation.
10.2Marketing Research10.21 Need
While the small business-owner has more contact with customers, gaining more feedback onshortcomings and needs and more opportunities for adjustments to products or services, thereremains much to be gained by marketing research. Profitable information to be sought includes:(a)growing markets for current products and possible future additions,(b)markets not presently covered adequately,
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51957591.doc: Small Business Marketing
(c)changes in customer buying habits (identifying short-term and long-term),(d)improved marketing methods,(e)effectiveness or otherwise of promotional activities,(f)comparisons with competitors' performance (interfirm comparisons),(g)ability of the firm to provide adequate after-sales service,(h)realistic goals for the business.Any aspect of marketing has potential for improvement, given appropriate research. 'Marketresearch is the tool that helps management identify potential customers, determine their needs andwants, and ascertain what they are willing to pay.
However it is more than that, for it also looks atcompetitors and the firm itself in its efforts to most effectively meet customer's needs and wants.This type of information is vital to any small business which hopes to grow, or even just to ensure itstays in business despite the efforts of others looking to divert their customers.
10.22 Sources Of Information
'Marketing research' may seem an intimidating term for a small business-owner with two or threeemployees. It also sounds expensive, and while it can be, a lot of useful information can becollected at little cost by the business itself.Information required can be separated into two groups:
primary data,
which is collected especiallyfor the research being conducted, and
secondary data
(or archival data), which is informationalready collected by other organisations.Any small business can collect a certain amount of primary data merely by the use of interviewsand questionnaires. For instance, each potential customer who comes into the business can beasked what they are looking for. Answers are briefly recorded for future analysis as there may beproducts which should be stocked since customers expect the firm to have them. Alternatively,sales records or the debtors ledger can provide a mailing list for questionnaires on say, productrange or quality or suggested modifications. Some special discount or give-away is sometimesused as an incentive to return the questionnaire. Supplier also can provide trade informationneeded.With imagination, quite a lot of useful market information can be collected by the small business-owner. However market research is not just a 'bower-bird' approach to information collection, butan attempt to solve particular problems with a view to implementation of change. Varioustechniques and approaches have been developed to allow accurate objective research and analysisof marketing problems and any non-professional would profit by doing at least some reading on thesubject. The Commonwealth Department of Industry, Science and Tourism has 'Marketing' in their Managing the Small Business Series and 'Marketing for Small Business' in their Training inManagement Package (Trimpac). More extensive texts on marketing are available from libraries todevelop research ability, but limitations in training should not prevent a start being made.
1)
Scarborough, N. M. and Zimmerer, T. W.,
op. cit.,
p. 536.
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