AZERBAIJAN TOURISM AND MANAGEMENT

UNIVERSITY
Faculty of Tourism and Hospitality
Group: TITI2001
Instructor: Mina Bagirova
Subject: Fundamentals of entrepreneurship and
introduction to business

Role of marketing in small business

The work prepared by Faiq Alakbarov

Baku, January 2022

Table of Contents
1. Introduction
2. The importance of marketing in small business
3. Consideration of Uber as an example
4. Marketing Mix of Uber
5. Conclusion
6. List of Literature

Introduction
The small-firm sector plays a significant role in the world economy. Research investigating
the competitive advantage of small firms has consistently emphasized the importance of marketing,
strategic positioning, and entrepreneurship as key factors in business survival and growth. The
ability to identify and operate in a particular market niche enables the firm to exploit a range of
specializations and offers protection from larger competitors. Yet despite the widespread acceptance
of the importance of the marketing concept, the precise marketing activities and competencies that
contribute most strongly to business performance must be identified for small and medium-sized
enterprises.
SMEs(Small and Medium-sized Enterprises) have characteristics that differentiate them from
large organizations. These differences include advantages such as greater flexibility, innovation, and
lower overhead costs. In terms of disadvantages, SMEs are limited by their market power, and
capital and managerial resources. Sometimes medium and small enterprises do not have enough
budget in the right size to use marketing and marketing companies. However, the usage of
marketing in developing your enterprise remains Important and relevant. There’s plenty a small
business owner can do to attract and maintain a customer base. It is important to be sure that every
promotional campaign is primarily focused on generating a response that converts into sales while at
the same time building your brand.
Clearly, the marketing department exerts influence on SMEs, especially in SMEs that
succeed. Larger firms achieve better competitive positions than smaller firms when they have
greater marketing capabilities, so SMEs must maintain strong marketing departments to effectively
compete. Evidence has shown that although marketing activities in SMEs may be different,
marketing departments are still critical to firms’ success. Many firms carry out business via highly
informal, unstructured, reactive mechanisms, whereas others develop, over time, a proactive and
skilled approach where innovation and identification of opportunities give them a competitive
advantage. Small firms face marketing challenges that can and will ultimately determine their future.
SMEs still engage in many traditional marketing functions, especially marketing planning. A widely
used marketing activity for SMEs is networking. Networks are important during the establishment,
development, and growth of SMEs. Firms can pursue a cost leadership or differentiation strategy. As
SMEs grow, they develop greater specialization and differentiation strategies. marketing’s influence
is more influential for a differentiation strategy than for a cost leadership strategy. For a firm to
pursue a differentiation strategy, it must identify customer needs and develop products to fit those
needs. Identifying those needs is one of the core competencies of a marketing department and
presumably would lead to the greater influence of marketing within a firm.

The importance of marketing in small business

Every entrepreneur should understand why marketing is so vital for small firms. It is
important to consider the excessive influence that marketing has on developing your business.
Identifying your end-objective is crucial in marketing, and one must consider that the finalized
output should result in product sales revenue. If enough time is not dedicated to the marketing of
your company, then your business sale will plummet almost certainly, forcing you to bring your
business to a fateful end. One of the top reasons why marketing is important for small businesses is
because it lets the public know about a company’s existence. You’ll be able to put your small
business on the map through your marketing efforts.
Also, the owners of small businesses spend almost all of their time tinkering with your
products or perfecting your services. Owners know them inside and out and have a clear
understanding of how they work. However, customers do not aware of providing services or
products as much as the owner does. Marketing gives you a chance to educate people about your
products and/or services and to show them why they need to buy them from you. Inbound
marketing, in particular, is an effective marketing approach for small businesses. It allows
businesses to use a combination of content marketing, social media marketing, and more to educate
consumers about the products and services that they sell. It is critical to developing a loyal audience
for a small business's brand in order for it to be as successful as possible. This necessitates
establishing a degree of trust with potential clients. Marketing aids in the development of a sense of
trust between businesses and their clients. Companies may employ marketing methods to build
consumer trust and encourage them to return for more items and/or services in the future.
Another benefit from marketing is that marketing can teach so much about the customer base
of some businesses. You can take a look at who responds to your marketing efforts the most and use
it to change up who you’re targeting your products and/or services at. It is also reasonable to use
marketing to gain invaluable feedback on your products and/or services from your customers.
Specifically, social media marketing has become a great tool for small businesses searching for
feedback from customers. You should be able to generate revenue for your company in no time if
you promote your products and/or services properly. Consumer education and discussions on why
people need them will result in greater sales over time.
In order to build the right small business infrastructure, you must think strategically – that’s
having a business mindset. Marketing is everything you do to make your product or service more
visible, more desirable and more profitable. Your marketing plan will clearly define the big picture
and provide focus and direction based on the 4 P’s of Marketing – product, price, place and
promotion. Your business mindset cannot be satiated unless you have a marketing plan which can
support your business objectives.
When the small business first opens up or when it first introduces a new product and/or
service, it shouldn’t be too difficult to generate interest in the brand. There will be a newness to it
that will create some buzz. But once the small business isn’t new anymore or once the product
and/or service has been out for a few months, the newness will wear off. Enterprise can maintain its
company’s relevance by using marketing. Marketing will help to continue to maintain connections
with the company's customers, even when the company won’t have a new product and/or service to
show them.

Consideration of Uber as an example

More than 540 cities throughout the world are served by the company. Uber has gone a long
way from its inception as a cab aggregator in 2009. Travis Kalanick and Garrett Camp started the
firm, which was previously known as Uber Cab, and it is located in San Francisco, California. It
provides a platform for users to order cabs near them, while the app instantly alerts the nearest Uber-
registered cab driver. Uber’s story began in Paris in 2008. Two friends, Travis Kalanick and Garrett
Camp were attending LeWeb, an annual tech conference. In 2007, both men had sold startups they
co-founded for large sums. The concept for Uber was born one winter night during the conference
when the pair was unable to get a cab. Uber was founded on a single idea: "What if you could
request a ride from your phone?" Initially, the idea was for a timeshare limo service that could be
ordered via an app. After the conference, the entrepreneurs went their separate ways. However,
when Camp returned to San Francisco, he continued to be fixated on the idea and bought the domain
name UberCab.com.
The ease and simplicity of ordering a car fueled the app’s rising popularity. With the tap of a
button, a ride could be ordered, a GPS identified the location, and the cost was automatically
charged to the card on the user account. The San Francisco-based startup quickly became one of the
hottest companies and grew quickly. The first Uber ride was requested in 2010 and less than two
years later, in 2011, Uber had already launched internationally in Paris, where the idea for it first
took root. Further, in July 2015, Uber reached its peak and became the most valuable startup in the
world, valued at $51 billion after its funding rounds. In June 2016, Uber then raised a further $3.5
billion from Saudi Arabia's sovereign wealth fund.
Now let’s consider marketing strategies and planning which were used by Uber throughout
their development. The process of segmenting a market into groups with similar characteristics is
known as segmentation. Uber employs a combination of demographic and regional segmentation
information to help price its services appropriately.
Uber has to identify which locations to target for clients who are willing to utilize an "on-
demand transportation service" over public transit, therefore both geographic and demographic
segmentation are critical. Uber is not available in rural regions; instead, it is mostly used in
metropolitan areas to replace taxis.
Uber employs a differentiating targeting approach in order to determine what percentage of a
customer's wallet they bring in and how to improve wallet-size through upselling. The phrase "cost-
based differentiation" can be used to describe the form of differentiation employed by Uber. When
comparing Uber cabs to publicly available means of transportation, the end client has a significant
pricing advantage due to the company's structure.
 Uber uses a user benefit-based and pricing positioning strategy to attract consumers from all
walks of life. Because day-to-day travel is such a significant expense for clients, positioning on the
basis of the economy has a significant impact on their attitude.
Global Presence: Having expertise and experience of operating in more than 70 countries
globally is what makes it competitively ahead of its competitors. Its presence in the remotest areas
and easy & timely availability of the services are some of the major factors for its success.
Broad services portfolio: Its comprehensive range of services namely Uber Go, Uber X,
Uber XL and the most famous and economical one Uber Pool with a GPS enabled app-based
tracking system has helped the company in making it convenient to book a cab.
Strategic partnership: It has been tying up with many cars manufacturing companies to
jointly produce customized vehicles exclusively for Uber which is giving a competitive advantage to
the company over others. Recently it partnered with Daimler to build autonomous vehicles which
will operate on Uber’s transportation network.

Marketing Mix of Uber

Products in the marketing mix of Uber:
The company provides people with the option to ride on taxis booked using mobile apps or
desktop websites. Uber has made transportation services a lot more easily accessible and
comfortable. Wi-Fi enabled cabs and car-pooling are taking customer experience to a different level.
Some of the varied services provided by Uber people are using on daily basis across the globe are:
Uber-Moto: This service allows people to book bike rides and roam around the city at the
cheapest rate possible.
Uber Go: This perhaps is the most widely used Uber service. You can book your own car
and travel from one place to another while accessing Wi-Fi.
Uber Pool: This is the car-pooling facility that lets you travel with other travelers going in
the same direction as yours. This is cheaper and helps in reducing the number of cars on a road.
Uber X: This is where Uber ups the game and makes people love it more than other network-
based transportation companies. You can actually book expensive cars using Uber X and enjoy
access to the best of comfort and style.
Places in the marketing mix of Uber:
Uber was founded in the United States of America in 2009 but since 2012, they have started
their international services and are doing quite well. Uber in India has revolutionized the way people
travel to the workplace and back home. It is affordable, comfortable and safer than other means of
transport. Uber works in Three Tiers in every country, where they classify cities based
on development, infrastructure and population. Delhi, Kolkata, Bengaluru and Mumbai happen to be
Tier I in India while Nagpur and likes are in Tier II.
Prices in the marketing mix of Uber:
 Uber clearly uses Penetration pricing. Uber has put a stop to the exploitation of travelers by
local transportation companies. People are now accessing Uber and traveling in peace. The fact that
one car is being used by 10-11 people on a daily basis not only helps us reduce the number of cars
on the road but also affects the pollution level in a positive manner. Pricing continues to play an
integral role in the popularity of Uber worldwide; the company is providing the most comfortable
rides at the cheapest price possible.
Promotion in the marketing mix of Uber:
Uber follows a very distinct marketing paradigm for developing a base of loyal users. Free
rides, discounted rides and referral benefits are some of the top methods used by the enterprise for
alluring customers. The quality riding experience makes people crave for it more and more, which
later turns into a habit and the company profits. Uber has worked hard on marketing and has
provided thousands of free rides across the world to get people addicted to the new way of
commuting. Plus, the pricing benefit is one of the best advantages of Uber, due to which the brand
gets marketed itself.

Conclusion
Uber is one of the most well-known firms in the world, having formerly been the most
valuable company in the world and changing the current ride-sharing and transportation sector as we
know it. Despite the fact that the COVID-19 pandemic has thrown a wrench in Uber's plans to
become profitable, resulting in large losses in its ride-hailing business, the company's strategic
investments in its food delivery arm Uber Eats, as well as its recent victory in California Proposition
22, bode well for the company. Time will tell if Khosrow Shahi can raise Uber's valuation to the
$120 billion figure that was initially forecast.

List of literature:
1. https://www.emerald.com/insight/content/doi/10.1108/14626000911000929/full/html

2. https://www.kake.com/story/40992430/7-reasons-why-marketing-is-important-for-any-small-business

3. https://www.marketing91.com/marketing-mix-uber-uber-marketing-mix/

4. https://www.investopedia.com/articles/personal-finance/111015/story-uber.asp