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Marketing plan and the strategies for small business enterprises

2926 words (12 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Small business enterprises (SBE) are normally started and owned by solely and is the way of entrepreneurs own marketing concept and is different other than business in global market. It is the widely spread and known business in western region of world, specifically in Europe and is contributing to world’s economy very efficiently. Though there is always lack of marketing specialists and the resources as well as skills, marketing approach are always based on sole decision makers as of entrepreneur’s perceptions. It also cannot be separated from the marketing approach which includes relationship approach and is found that marketing is important as other functional areas of the small business organizations. The business is affected by marketing which includes, the location, pricing, sales techniques, advertising, promotional activities even the goal of the company. Marketing is all about the making its customers aware of the products or services, good value, good service and following up the customers are even more important which can be done better than the competitors.

Introduction

In general small businesses are run by the owner who owned the business privately. According to the Industry Canada, the business that has less than 500 employees is known as small medium enterprise. In addition, small business is defined as the business having less than 100 employees and if the business is based on service then the number of employees is even less than 50 and. According to SBEs industry published guidelines, for wholesaling the range of employees falls under 100 to 500 and for manufacturing, ranging from 500 to 1500.

Thought the small businesses hold lesser number of employees and other resources, it holds the powerful position for the economic development. It is quite difficult to define the accurate definition for small business because of different varieties of firms, but finally according to the agreement, is defined differently in different parts of the world and according to the national needs. (Theng and Boon 1996). It plays the vital role as the contributors to the economic, development and the employment growth in the economy of Individual County as well as in the world economy. Mulhern (1995) concluded that, there is 99% of companies are small and medium sized in all over Europe whereas also generated 66% of employment.

The idea of comparing the size of a business, to the size and power of a boat, provides an excellent analogy. A cruise ship may withstand storms and high waves much better than a small yacht, but it is not very manoeuvrable. A speedboat can go places a ship could never attempt. It is faster, agile, and can turn quickly to avoid danger. These comparisons are no surprise. Most people seem to realize these differences, but contemplating them well enough to seize their potential is what separates the weak from the strong. The small athlete, who could easily be crushed by bigger competitors, can still win by dodging them and outrunning them.

For small business owners to adapt the same thinking as big business can easily bring disaster. You have the advantage if you think differently. Business models are changing fast, and a small agile company can adapt more quickly. There are big companies teetering on the edge of bankruptcy. Some of them are so steeped in outdated business practices that they cannot adapt quickly enough to avoid hitting the iceberg.

Every product or the services is worthless unless there are any customers to buy them and are the key factors for making any business towards the success or the failure. Here exists the essence or the importance of marketing for generating the customers for the business whether it is done online or offline. Marketing is none other than creating the demands for the products or the services provided by the business from the potential customers and even more additional demands from the existing customers. (www.theinternetbusinesscoach.co.uk) In general, most of the small businesses spend less on marketing but key for whole process is to focus on the right customers whether by adding value to the products or services which is directly perceived by the customers mind creating the brand loyalty which will be discussed in next section of this report.

Customer as a Key Factor

The mantra “The customer is the king”, is popular since the 1940’s. The customers are being key factors for the success of the business since early age of business development. In every or almost all business enterprises, the ultimate goal of those organizations is to fulfil the demands or their wants and needs through products or the services to the customers.

CRM as the solution for Small Business

Customer relationship management widely known as CRM, as mentioned by (Chang, Liao and Hsiao, 2005) it is really an observable fact when came out after the occurrence of Internet and the web technology in order to facilitate for the implementation of CRM. It mainly focuses on the interaction between the customers and the service providers through the Internet and the web based applications. Customer Relationship Management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer. (J. N. Sheth & A. Parvatiyar, 2001).

The most important aspect of CRM is the selection of the customers. As many of the researchers has shown in their studies that, all the customers are not always profitable for any individual company. Some customers might be profitable for any individual company but not for all. So company therefore adopt the selective programme and marketing efforts by segmenting and selecting the most fruitful or profitable customers as the individual marketing programme.

So as the size of small business and the available resources, it is very important to focus on particular customers from the particular section of the market, widely known as the segment of the market. The owner of the small business spends less on marketing and the strategy so, determining the profitable customers become very essential for the small business.

Needs of Marketing for SBE

The marketing needs of small business are very different but simple. He further added, local markets are mainly targeted for business advertisement of small business. The most common methods for advertisement flyers, yellow pages are used in local market. As it is the back bone of European business and many of other countries. In today’s world economy, small business is contributing the most. The lack of perfect business plan and market strategies is squeezing the possibilities for the success so the adopting the marketing plan and strategies will definitely help the small business to grow satisfying the ultimate customer’s need and wants.

It allows looking forward to plan the changing environment and the trend of the existing market even changes of the competitors. It is for helping to identifying the strengths and weaknesses of own company, its products or the services as well as the reviewing the available resources and the skills and to explore them to get fit in the market and to fulfil the company’s strategic goal.

SWOT Analysis of SBE

It is the well known tool for analysing the strategic position of the business and the environment. The purpose of this tool is basically to find the strategy which is ultimately creates the specific business model. There are four factors in SWOT analysis which are as follows:

Strengths: it is the qualities of any business organization which enables the business to survive and to gain the competitive advantage. It can be either tangible or intangible. As the small business are small in size but also have the strength of low investment risk and low investment on the advertisement.

Weakness: these are the factors which is the standard of business organizations. Low product range, poor decision making, insufficient research facilities. In terms of small business, it does not need the massive numbers of resources but whereas the product is concerned, the small business focuses on very few ranges of products as well as limited services.

Opportunities: It is the opportunities which are present in the environment where the business organization operates. As the small businesses are the back bone of the country economy, arise in market, increasing demand are the opportunities of the small business.

Threats: this is the condition where the environment is not in favour of the business. In general there are some threats for small business because of the existence of large business occupying the market of small business.

Market Planning for SBE’s Product or Services

There are two types of strategic market planning. They are as follows:

Long-term market planning

Short-term market planning

Long-term market planning: the long-term market planning is set as the name suggest for the long term goal of the company as a scheduled day-to-day business and marketing activities. This is ongoing process and the marketing activities whereas is the essential part for new business.

Short-term market planning: it is the process of developing and setting the specific goals. This is adopted by the existing businesses in response to the unexpected in the business and if is new in the marketplace. On the other hand, it is basically adopted when there is decrement in market share, launching new product, increasing in customer’s complaint, and change in government regulations and if new market is identified for the product or the service.

Depending upon the market or the business whether it is existing business or the new business the marketing plan can be chosen out of two which both focuses on the company’s strength and the weakness of the competitors and to improve the market position while increasing the sales and the profitability of the company.

Marketing strategies for SBE

The customer’s needs and wants can be fulfilled when the situation are analysed which are the key factors for the business success. The factors involved in marketing strategies are as follows:

Market segmentation

Market targeting

Market positioning

Value proposition

Generally segmenting the market means grouping the people of same behaviour or the buying pattern of the customers. Whereas segmentation is concerned with the small businesses, it is very important to find out the right customers from the right place. Though the market is very small, finding the profitable customers and their needs is essential for the small businesses. Segmenting the market can be of different types: according to geographic, demographic, psychographic and behavioural.

According to geographic segmentation, it is based on the region, size or the density of the population. It is benefit for the small business to segment the market according to the geographic location because of the popularity of the products or the services where the business can occupy its own market. On the other hand, demographic segmentation, it is based on age, gender, income occupation, religion, family size, education and so on. This can be another benefit for small businesses because of limited resources it is easier for small business to launch the new products or for the promotion of new products or the services.

Next is psychographic segmentation which deals with the life style of the customers, their social class, values, and opinions, their interests, attitudes. Small business focuses on the customers of similar class rather than the high class, so that the products or the services will fit with all the general class. Final strategy of market segmentation is behavioural segmentation and is based on the pattern of purchase behaviour and also based on usage rate. This segmentation is somehow affecting the small business.

Where the small business is concerned, the combination of geographic segmentation and demographic segmentation are best suited for the small business as targeting on very specific customers is fruitful and less expensive for small business organizations.

After deciding the segmentation strategy, the next step is to target the right market. According to Ferrel et al, 2008, there are five strategies for targeting the market. The first is single segment targeting. This strategy is normally selected by the small business because of concentrating on specific segment of the market. On the other hand, selective specialization select the multiple segment of the market and is widely, known as differentiated strategy. Product specialization is another which specially deals with the particular specific group of customers. Mass market targeting is the one which is specially adopted by the large businesses and target the mass markets. Finally market specialization which expertise in one market and provides the solutions to the customer’s problems.

Importance of positioning for SBE

Positioning is not only to position any product or services in any location or in the place rather it is about to attract the attentions of the products while matching the customer’s needs and wants. It is about the position in customers mind against the competing products. Kotler (1986). For positioning the product or the services, Robert et al (2006) purposed some approaches where attributes of the product, and deals with brand loyalty of the products by delivering the better value than the competitors.

Brand name and the value for the product by positioning in customers mind is known as price or quality approach. Product user and the product class is another one which deals with the specific group of products whereas use of application approach deals with positioning according to the uses by the customers. Competitor is the last one and deals with as the name suggests positioning directly to the market by distinguishing to each other.

For small business, use of application approach will be best suited because of the same behaviour of customer buying pattern. For example McDonald is most popular for fast food but in competition to street fish n chips shop in UK. Though the fist n chips shop can also provides all the services to the customers as McDonald can but the trend of customers is highly follow the others.

Pricing Strategies of SBE

It is most important to focus on pricing strategy as it is the major factors affecting the marketing mix. It is the important factors for the product features, choosing the channel distribution for the products or the services and determines the whole resources of the business. There are different types of pricing strategy for the product or the services. They are: premium pricing, skim pricing, penetration pricing and economy pricing. Among of all the pricing strategy, it is suggested to adopt economy pricing strategy as the small business organization would cover all the customers in middle level neither high class nor the low class. The product or the services should be easily accessible to all level of customers satisfying the needs and the wants. The Pound shop or 99p shop in UK can be the best examples as they provide all the products for just a £1.

Distribution system for SBE’s Products or Services

It is the methods of providing the products or the services to the ultimate customers what they want or need. There are basically two types of channel that can be followed for the distribution of products or the services. The first one in Indirect Distribution and another is Direct Distribution. Among of two distribution channel, Direct distribution will be the best suited for the small business organizations. By adopting the direct distribution, the mediators in between the business and the customers can be eliminated and can save the further expenses.

Small businesses are not relying on traditional marketing methods, where marketing was used to like work-of-mouth or just printed advertisement. The time has been changed now so instead of traditional marketing internet marketing are in existence today. Internet has become as an integral part for the shopping by the customers. It is very difficult to find the customers for small business just depending upon the traditional marketing. Through the internet the business can attract many of new customers and is even cost effective and even the customers can save their valuable time and money. It is also noticed that the research activity output in E-Marketing had decreased significantly between 2003 and 2008 . The availability of information about the products and 24 hours service can give the advantage to the small business as well

Conclusion

To conclude, it is found that marketing is an important aspect for any kind of businesses whether it is small or big. The size of the business does not matter while adopting the marketing but the strategies of marketing plan may differ from one business to another. SWOT analysis or the use of Four P’s can be helpful for determining the specific marketing plan or for the marketing process. Whether it is segmenting market or the promotion strategies, for the small business there is the importance exists for satisfying the customer’s needs by providing the right product for right value. On the other hand, maintaining the relationship with customer is equally important to retain the customer within the business organization. It is not all over by only selling the product to the customers. Actually it’s the start of good relationship and the business opportunities from the profitable customers.

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