Marketing for SMEs How to guide SMEs marketing efforts?

Marketing Weaknesses Marketing is often seen as a weakness Marketing is often seen as a weakness Requiring external support & consulting Requiring external support & consulting Many SMEs do not have Many SMEs do not have Clear marketing function Clear marketing function Formal marketing plan Formal marketing plan Selling/salesmanship manager Selling/salesmanship manager Sales analysis methodology Sales analysis methodology Salesmanship training Salesmanship training But ……… But ………

Marketing Strengths Most SME entrepreneurs have personal knowledge of their position in the market Most SME entrepreneurs have personal knowledge of their position in the market Informal relationship with customers & staff to identify own problem areas Informal relationship with customers & staff to identify own problem areas Informal marketing methods Informal marketing methods Trade newspapers/magazines/web sites Trade newspapers/magazines/web sites Trade fairs & exhibitions Trade fairs & exhibitions Business associations Business associations Personal networks Personal networks

Marketing Strengths cont Personal recommendations Personal recommendations Word of mouth sales Word of mouth sales Repeat orders Repeat orders Customer loyalty Customer loyalty Unwritten marketing plan Unwritten marketing plan Conceived in entrepreneurs head Conceived in entrepreneurs head No/little commitment to paper No/little commitment to paper

Developing marketing profile Successful marketing requires: Perception of customers needs Perception of customers needs Which can be met by a particular service or product Which can be met by a particular service or product Awareness of competitors strengths & weaknesses Awareness of competitors strengths & weaknesses Awareness of changing business climate Awareness of changing business climate Understanding of selling & salesmanship skills Understanding of selling & salesmanship skills Coherent marketing mix (price, product, promotion, place) Coherent marketing mix (price, product, promotion, place) Focused on customer needs Focused on customer needs Market potential Market potential

Identifying Market Position Customers Needs Customers Needs Clarification of needs for SME to meet with a Unique Selling Proposition (USP) Clarification of needs for SME to meet with a Unique Selling Proposition (USP) Establish SMEs performance in market Establish SMEs performance in market Understanding of changing needs Understanding of changing needs Understand competition & business environment Understand competition & business environment Nature & focus of selling & sales functions Nature & focus of selling & sales functions Coherence of marketing mix (4 Ps) Coherence of marketing mix (4 Ps)

Market Profile Assessment Customers Needs Performance Audit Competitors Business Environment Selling Effort Market Mix Key needs Segmentation SMEs USP Sales & profits By product group By location By customer By distribution channel Competitors SWOT Market trends Who sells? How well know product range/ SME USP? Sales conversion rate Effectiveness of feedback Pricing policy Promotion & advertising Place – location of SME/customers Product – still valid in market place Marketing Plan & Strategy

Profile Assessment Successful entrepreneurs will be able to talk through profile Successful entrepreneurs will be able to talk through profile Should not need comprehensive data collection Should not need comprehensive data collection Should not need to commit to paper Should not need to commit to paper Should be in entrepreneurs head Should be in entrepreneurs head Personal ability & desire will determine successful marketing Personal ability & desire will determine successful marketing

Profile Assessment cont Help to articulate thoughts on Degree of awareness about market functions Degree of awareness about market functions Assess position in market place Assess position in market place Degree to which SME delivers what customers really need (or want?) Degree to which SME delivers what customers really need (or want?) Give a clear overview of where SME is in terms of its marketing efforts Give a clear overview of where SME is in terms of its marketing efforts Identify where support is needed to develop better marketing techniques Identify where support is needed to develop better marketing techniques

General Considerations Firms survival depends on how well it understands Firms survival depends on how well it understands Changing market conditions dictated by: Changing market conditions dictated by: Customers needs Customers needs Competitor activity Competitor activity Effective marketing requires Effective marketing requires Market research Market research Strategy formulation Strategy formulation Task based implementation Task based implementation

Marketing Strategy Product orientation Product orientation Emphasis on product itself Emphasis on product itself Production orientation Production orientation Cost or ease of production Cost or ease of production Market orientation Market orientation What problems do customers have? What problems do customers have? Who has these problems Who has these problems How can you address those problems How can you address those problems

Marketing Strategy cont Market – orientation ( cont ) Market – orientation ( cont ) Identify new markets Identify new markets Finds new products for existing customers Finds new products for existing customers Finds new customers for existing products Finds new customers for existing products Identifies competition Identifies competition Public image consistency – internal v external opinion Public image consistency – internal v external opinion Pricing policy Pricing policy Cost plus – accountants approach Cost plus – accountants approach Percentage add on per item Percentage add on per item Profit per batch Profit per batch What market will bear – entrepreneurs approach What market will bear – entrepreneurs approach Credit sales – salesmans approach Credit sales – salesmans approach

Sales Management Training & motivation of salesmen Training & motivation of salesmen Ensure share time between Ensure share time between existing clients & potentially new clients existing clients & potentially new clients Large & small clients Large & small clients Effective use of advertising Generate curiosity & interest Helps get appointments & breaks ice at sales meetings

Advertising & Promotion Be careful not to set advertising budgets as percentage of sales Be careful not to set advertising budgets as percentage of sales Plan a promotion campaign Plan a promotion campaign Set objectives Set objectives & budget accordingly & budget accordingly Balance with resources available Balance with resources available Be clear about expected sales from campaign Be clear about expected sales from campaign

Physical Distribution Know shipment origin & destinations Know shipment origin & destinations Intermediate storage needs Intermediate storage needs Trans-shipment requirements Trans-shipment requirements Analysis of long production runs Analysis of long production runs Versus storage costs Versus storage costs Service requirements Service requirements Use logistics software to plan Use logistics software to plan Assess use of own transport versus out- sourcing Assess use of own transport versus out- sourcing

Distribution Channels Assess use of wholesalers versus dealing with retailers Assess use of wholesalers versus dealing with retailers Spend time understanding pros/cons of retail v wholesale Spend time understanding pros/cons of retail v wholesale Consider using wholesalers with entrepreneurial flair Consider using wholesalers with entrepreneurial flair Introduce incentive schemes Introduce incentive schemes Advantages/disadvantages of large sales force Advantages/disadvantages of large sales force

Packaging & Product Development Give resources to undertake appropriate market & consumer research Give resources to undertake appropriate market & consumer research Understand new consumer trends & changing needs Understand new consumer trends & changing needs Plan ahead Plan ahead Involve professional marketing personnel Involve professional marketing personnel At beginning of process At beginning of process New product task force New product task force

Discussion Points How important is marketing to an SME? How important is marketing to an SME? How useful are the 4 Ps? How useful are the 4 Ps? Where would you go for marketing advice? Where would you go for marketing advice? How much of your budget should you spend in marketing efforts? How much of your budget should you spend in marketing efforts? How best would you spend that budget? How best would you spend that budget? How often do you speak to your customers about your products or services? How often do you speak to your customers about your products or services? How often do you change your product range? How often do you change your product range? How do you find new customers or look for new products? How do you find new customers or look for new products?