Marketing for Small Businesses

MoneyWatch for June 2008
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Marketing, in essence, is the process of identifying the needs of customers and then developing a plan to fulfill those needs.  These types of activities are essential for any entrepreneur who is looking to increase profits and expand their business.  In a struggling economy, it is even more important to develop a lucrative marketing approach.  The profits that are accrued as a result of a successful marketing campaign will help offset other losses due to a stagnant economy.  Here are some basic principles from the U.S. Small Business Administration on how to develop a successful marketing program.

Determine the Needs of Customers through Market Research
* An inexpensive research program (e.g. a questionnaire given to customers) can reveal dissatisfaction or possible new products or services
* Identify trends that affect sales and profitability (population shifts, legal developments, and the local economic situation should be monitored to identify problems and opportunities)
* Research the market strategies of competitors

Analyze Your Competitive Advantage and Develop a Market Strategy
* Identify customer groups in which you can better serve than a competitor
* Tailor product offerings, prices, distribution, promotions, and services toward you target groups

Select Specific Markets to Serve by Target Marketing
* Concentrating efforts on one or a few market segments – target marketing – gets the most return from small investments
* Two methods used to segment a market: Geographical segmentation – customers in a particular geographical area; Customer segmentation – people most likely to buy your product or service

Determine How to Satisfy Customer Needs by Identifying a Market Mix
Every marketing program contains four key components.
* Products and Services – strategies might include concentrating on a narrow product line and developing a highly specialized product or service
* Promotion – advertising and direct customer interaction - good salesmanship is essential for small businesses because of the limited ability to spend on advertising
* Price – the right price is crucial for maximizing total revenue
* Distribution - working through established distributors or manufacturers’ agents is generally easiest for small manufacturers; small retailers should consider cost and traffic flow in site selection

Evaluate Your Marketing Performance
* Every program should have performance standards to compare with actual results - research industry norms and past performances will help develop appropriate standards
* Entrepreneurs should audit their company’s performance at least quarterly

Click on these links for more tips and resources.

U.S. Small Business Administration: Various Articles on Marketing and Advertising
Entrepreneur.com: Articles on Small Business Marketing
About.com: Marketing Basics for the Small Business
SmallBusinessBranding.com: Why You Should Up Marketing in a Down Market
SmallBusinessNow.com: Marketing Tips and Resources
BusinessTown.com: Marketing Tricks for the Frugal Budget
AllBusiness.com: Articles on Marketing Techniques

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Research assistance for MoneyWatch is from Cleveland State University Nance College of Business Administration. Information on the Nance MBD program is available here.