Download MARKETING STRATEGIES IN SMALL BUSINEESES Barriers to

ENTREPRENEURSHIP AND INNOVATION
BY: ANTHONY MOONGA
MOBILE: 0977- 808172
MODULE
NINE
MODULE NINE:
MARKETING
STRATEGIES IN
SMALL BUSINEESES
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What is Marketing?
In Entrepreneurship, Marketing may be defined
as finding out what your customers need and
want and then figuring out a way to profitably
meeting those customer needs and wants
Marketing can further be defined as:
The Management process responsible for
identifying,
anticipating
and
satisfying
customer requirements profitably
To satisfy your customers and make a profit
requires the following key considerations:-
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Products: providing the selection of
products/services needed by customers
Prices: setting prices the majority of your
customers are willing to pay
Place: locating your business where you can
reach the majority of your target customers
Promotion: devising means and ways of
effectively and efficiently informing and
attracting your target customers
Procurement: buying or producing the
products/services at prices that can make a
profit
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Key Marketing Functions
Within any business organization, the marketing unit fulfils
some very important functions, which are activities that must
be performed to move products from producers to
consumers. Such activities may be identified as follows:
Product development: Marketing advises the production unit
on what to produce; the quality, style, design, brand name
and packaging – all based on customer expectations and
market research
Pricing: Marketing plays a large role in setting prices, whether
at, above or below the competitor’s prices and in determining
a system of discounts for the distributors/middle people who
handle the products
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Key Marketing Functions
Buying: This involves selecting from an assortment
of goods, determining quantity and quality,
selecting sources of supply and negotiating the
terms of purchase. (This is sometimes called
purchasing or procurement).
Advertising: This is the impersonal presentation of
goods through the mass media, namely radio,
television, newspapers, etc. Advertising agencies
may assist the Marketing Unit in performing this
function
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Key Marketing Functions
Personal selling: This is selling done through person-toperson contact. A large number of sales people are engaged
in outside sales work or in retail sales in shops and market
places. The sales force must be properly selected, trained
and motivated to perform.
Sales promotion and merchandising: This involves the
development of such tools as point-of-purchase displays,
window displays, free samples of the product, exhibitions at
trade fairs and shows, news releases, price reduction during
special ‘sales’ and so forth
Physical distribution: Marketing arranges for the physical
handling of goods, storage, transportation and proper
inventory management
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Key Marketing Functions
Market research: Marketing must gather and analyse information
about demand, consumer wants, competition, government policies,
new products and general changes in our social structure. This
function underscores the fact that marketing begins even before the
product is produced
Credit management and financing: Credit is often used in serious
business transactions where firms buy and sell on credit. In
addition, various types of financing provide permanent as well as
temporary capital for the marketing process.
Post-sale transaction Marketing must arrange to handle customer
complaints after the sale and provide for after-sales service,
especially for machines, equipment and consumer durable goods.
This shows that marketing does not end with the ringing of the cash
register
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Marketing Mix
A company that follows the marketing
concept will use the marketing mix. The
marketing mix a combination of factors
which can be amended or adapted to
suit the requirements of individuals or
groups of customers. It is the “toolbox” of the marketers.
Marketing Mix
The Seven Ps
The term “Marketing Mix” covers the seven
controllable variables popularly referred to as the
Seven Ps;
Product
Price
Place
Promotion
People
Processes
Physical evidence
Marketing Mix
It will be appropriate
additions(the last three)
to
explain
the
new
People
This aspect covers training and motivation of people
involved in the marketing effort. It is important that
the correct image is portrayed to a customer at all
times and the staff are the people that deliver that
image.
Marketing Mix
Processes
This element refers to the systems used in the
organisation which contributes to the marketing
effort. All systems in the organisation should be
integrated in such a way so as to become customer
friendly so that it can add to the overall marketing
effort
Marketing Mix
Physical evidence
Refers to what the customer “sees” surrounding a
purchase. Over all the term covers the physical
appearance and ambience that collectively imprint on
the customers. It could be the showroom, the
trimming that are in the hotel, quality of information
leaflets, external aspects of the building, type of
music played in the background etc.
Marketing Mix
The concept of the 7 Ps were developed from the
Marketer’s viewpoint of what is required. Kotler now
considers marketing’s role from the perspective of
what customers and consumers need. He therefore
introduced the C Concept
Marketing Mix
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Seven Ps
Seven Cs
1
Product
Consumer Value
2
Price
Cost
3
Place
Convenience
4
Promotion
Communication
5
People
Consideration
6
Processes
Coordination & Concern
7
Physical Evidence
Confirmation
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IMPORTANCE OF MARKETING IN AN ENTERPRISE
Customers are the most important people for your business.
If it were not for your customers, you would not be in
business. If you do not provide what your customers want, at
prices they are willing to pay and do not treat them with
respect, they will buy somewhere else (they will buy from
your competitors). Without customers, there will be no sales
and your business will have to close down eventually.
Satisfied customers will come back and buy more from your
business. They will begin to be your business ambassadors,
going round spreading the good news about your business’
good products/services; your good prices, your good
customer care and reception, etc. They will tell their friends
and other people about your products and business. More
satisfied customers means larger sales and bigger profits.
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WHAT IS A MARKET?
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The word market has two different meanings:-
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Market, for example, a vegetable market,
means a PLACE where people meet to sell and
buy vegetables and related merchandise
In Marketing, market also means customers,
people or other businesses, that want your
products/services and are willing to pay for
them
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example
In most areas, there is a large market
for school uniforms. The school going
children use school uniforms but they
are not the market. The parents buy
the uniforms for their children.
Therefore, the market for school
uniforms are the parents or guardians
of school going children who are
willing to pay for the uniforms.
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For example
In Matero township of Lusaka, there
are probably more than one hundred
thousand people but the market for all
bar owners are the number of people
who drink beer, which may be a very
small fraction of the total population.
What is selling?
 Selling
is the part of Marketing
that involves directly or indirectly
contacting, convincing and finally
striking contracts with customers
to purchase your product or
service.
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How to increase customer sales
Sell the solution the product provides
to the customer, not just the product
 Sell the benefits of the product to the
customer not just the features it has
 Build relationships with the customers
not just a sales transaction
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What an entrepreneur ought to know about a customer
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A customer is the most important person in any
business
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A customer is not dependent on an entrepreneur, but
the entrepreneur on the customer
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A customer is not an interruption of the entrepreneur’s
work. A customer is the purpose of an entrepreneur’s
work
A customer does an entrepreneur a favour by calling.
An entrepreneur does not do a customer a favour by
serving
A customer is part of an entrepreneur’s business not an
outsider
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What an entrepreneur ought to know about a
customer
A customer is a human being like an entrepreneur,
with the same feelings and emotions but it is the
entrepreneur who must exercise the highest form
of tact, diplomacy and courtesy because he needs
to sell
A customer is not someone to argue or match wits
with
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A customer takes his wants and needs to an
entrepreneur, and it is an entrepreneur’s job to
fulfil those wants and needs
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What an entrepreneur ought to know about a
customer
A customer is always deserving of the most
courteous and attentive treatment an entrepreneur
can give
A customer is the person who makes it possible for
an entrepreneur and his workers to earn their
salaries. He keeps the entrepreneur and his
workers in employment
Principles of Excellent Customer Care
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Always assure the customers that you are there for
them
Promptly greet customers by name if you know
them
Listen to the customer and clarify needs and wants
through questions
Always ask customers for suggestions to improve
your business
Principles of Excellent Customer Care
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Have a positive attitude – be encouraging and helpful, smile
and do not be negative or defensive
Treat customers the same way irrespective of their status
Stress to all employees the need for excellent customer
service
When there are many customers, employ the first come, first
served strategy
Remember: The Customer is always right
How to Retain Good Customers and keep sales high
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Properly execute the sale – get it right the first time
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Offer improved value
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Be flexible to solve the customer’s problem
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Service the customer before, during and after the sale
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Quickly follow up and attempt to resolve complaints.
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Provide room for customers to always suggest to you possible
improvements
Tips for Improving Appeal to Customers
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Smiling and neat sales persons
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Clean and tidy store both inside and outside
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Selling the right product/services always
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Bright and well-lit store
Tips for Improving Appeal to Customers
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Shelves stocked neatly and easy to reach
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Signs on specials and new items
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Inviting entry way, not crowded by rowdy youths
playing games
Well displayed price tags
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Market Research in an enterprise
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To understand your market and customers better,
ask yourself the following questions:-
Which different kinds of customers am I trying to
sell to?
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What products or services do they usually want?
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Why do they want them?
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What prices are they willing to pay?
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Market Research in an enterprise
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Where are these customers and where do they
usually buy from and when?
How often and how much do they buy?
Who are my competitors, that is, other businesses
selling products and services similar to mine?
How good are my competitors?
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Finding answers to these kinds of questions is
called Market Research. Market Research is very
important for your business. It means getting
information about your market.
The more
information you have about your market and your
competitors, the better the decision you can make
about: What products or services to sell (Product)
What prices to charge (Price)
How to get your products/services to your
customers (Place)
How to inform and attract customers (Promotion)
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Some practical ways of doing simple Market
Research
Learn to talk to your customers. This must be in
such a way that you extract a lot of genuine
information from them about how they feel about
your business
Listen to what your customers say to each other
about your business and goods and services. You
must be alert to get your customers’ comments
You must sometimes learn to find out why some
customers keep by-passing you, to buy from your
competitors
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Some practical ways of doing simple Market Research
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Study your competitors’ businesses
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Learn to ask suppliers, other businesses and business
associates which goods sell well in their business; what
they think about your products or services
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Check your order books, your sales records and your
stock records to know which goods or services sell well
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Learn to get a lot of information by reading newspapers,
catalogues, trade journals and magazines to get
information and ideas on new products or services
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Some practical ways of doing simple Market Research
Learn to belong to Associations like Business
Associations, Chambers of Commerce and Farmers’
Unions. These are normally information centres, with
very useful information which can help you improve
your marketing
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Learn to attend trade fairs, shows, exhibitions, etc
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Learn to attend seminars, workshops and other related
training programs
Develop a habit of visiting some libraries that stock
information on trade and commerce
EXPORT MARKETING
International Marketing is based on marketing in
general but the major difference is that your product
or service will have to cross political and national
borders. This in effect has implications for the
marketing of your product. An exporter will need to
know inter-alia, potential demand for the
product/service in the foreign country, competition
from domestic and imported products, national
regulations (home country and export market),
distribution channels, political climate, financing,
currency exchange risk and legal aspects.
Specific issues relating to an export market will
include:
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Existing export barriers of the own country or
import barriers of the target country
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Export financing
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Population to ascertain size of the market
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Income distribution and disposable income
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Economic situation including foreign currency
position
Specific issues relating to an export market will
include:
Philosophy and religion
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Consumer characteristics such as literacy levels,
eating habits, language, culture and so forth
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Communication including transport networks
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Environment situation and security measures
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Credit rating
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Trade policy
Barriers to Export Trade
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One of the challenges that export trade
poses are the various tariff and non-tariff
barriers that an exporter is likely to meet in
the course of doing business. Despite the
trade regulatory framework instituted by
the World Trade Organization (WTO) and
other multilateral agreements, regional and
bilateral agreements, international trade is
not completely free.
Barriers to Export Trade
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The following are some of the impediments to free flow
of goods and services in export trade:
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Quality Control
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Some countries have placed stringent measures with
regard to imports of food stuffs, for example
groundnuts will only be allowed into their markets if
levels of afflo-toxin content conform to stipulated
standards, or the packaging has to meet defined
standards according to size, strength used, materials
etc. Strict regulations are often applied also to safety
aspects (eg, electrical appliances) and environmental
aspects of products to be exported.
Barriers to Export Trade
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Documentation
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An exporter is normally required to
complete a number of documents some of
which may be rejected on presentation to
customs authorities due to technical
reasons. In some cases, this has interfered
with the free movement of goods resulting
in delays and missing delivery dates.
Barriers to Export Trade
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Rules of Origin
This has at times been a bone of contention
especially when the product is originating from
developing countries. The 35% local content of
products originating from COMESA/SADC countries
for example cannot be achieved by some countries,
which depend on the importation of raw materials
for the production of their export products.
Barriers to Export Trade
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Custom Valuation
Customs authorities have at times either
knowingly or otherwise valued differently the
same product/commodity to suit their needs.
As a result, there have been delays in the
clearance of goods.
Red Tape
These are administrative delays usually
associated with the issuance of certain
documents such as import permits and sheer
inefficiency.
Barriers to Export Trade
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One of the challenges that export trade poses are
the various tariff and non-tariff barriers that an
exporter is likely to meet in the course of doing
business.
In order to systematically assess the market
potential for your product, you should carry out a
detailed export market research in the target
market. Export market research is the process of
gathering and evaluating information in the foreign
target market with the objective of identifying
market opportunities and constraints.
Some of the specific issues an export market research
should cover include:
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Demand, growth and price trends for the product (if the
product already exists)
Consumer purchasing habits and cultural practices
The extent of the competition and who are the main
competitors in a specific market or region
Market characteristics: what do they produce, how do
they distribute, how do they communicate and what are
their strategies
The size of the market itself: how many inhabitants are
there, how is the economy doing and what about the
investment climate
A company may research a market by using either
primary or secondary data sources.
Primary market research is when data are collected
directly in the foreign market place through
interviews, surveys and other direct contact with
representatives and potential buyers or customers.
The
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Secondary market research is when a company
collects data from various secondary sources such
as trade statistics for a country, trade magazines,
the internet, International Trade Centre (ITC) ,
published business articles, etc. This method is
also known as Desk Research.
Obtaining
information from secondary sources is less
expensive and helps the company to weed out
unpromising markets and therefore enables the
company to focus its marketing efforts on few
selected promising products and markets. The
main disadvantage of secondary data sources is
that the information may not be reliable because it
may either be outdated, not specific to your
business needs or distorted by incomplete datagathering techniques.
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However, having decided to undertake an export
market research two factors will have to be taken
into consideration:-
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Whether to use desk or field research or both
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Where to source the information
Thank
you