1. PowerPoint Presentations for Small Business Management: Launching and Growing New Ventures, Fifth Canadian Edition Adapted by Cheryl Dowell Algonquin College

2. CHAPTER 6 Small Business Marketing, Product, and Distribution Strategies 6-2

3. LOOKING AHEAD After studying this chapter, you should be able to: 1. Describe small business marketing. 2. Explain the term market and methods of forecasting sales. 3. Identify the components of a formal marketing plan. 4. Define customer relationship management (CRM) and explain its importance to a small firm. 5. Discuss the significance of providing extraordinary customer service. Copyright © 2013 by Nelson Education Limited 6-3 Continued…

4. LOOKING AHEAD After studying this chapter, you should be able to: 6. Illustrate how technology, such as the Internet, can improve customer relationships. 7. Identify the key characteristics of consumer behaviour. 8. Explain product strategy and related concepts. 9. Describe the components of a firm’s total product offering. 10. Explain the role of distribution in marketing. 11. Describe the major considerations in structuring a distribution system. Copyright © 2013 by Nelson Education Limited 6-4

5. SMALL BUSINESS MARKETING WHAT IS IT? Copyright © 2013 by Nelson Education Limited 6-5 MARKETING – Activities directing the flow of goods and services from producer to consumer or user SMALL BUSINESS MARKETING consists of those business activities that relate directly to: – Identifying a target market – Determining target market potential – Preparing, communicating, and delivering a bundle of satisfaction to the target market LO 1

6. ESSENTIAL MARKETING ACTIVITIES Copyright © 2013 by Nelson Education Limited 6-6 MARKET ANALYSIS – evaluation process that encompasses market segmentation, marketing research, and sales forecasting MARKETING MIX – combination of product, pricing, promotion, and distribution activities LO 1

7. SMALL BUSINESS MARKETING ACTIVITIES Copyright © 2013 by Nelson Education Limited 6-7 LO 1

8. MARKETING PHILOSOPHIES MAKE A DIFFERENCE Copyright © 2013 by Nelson Education Limited 6-8 CONSUMER ORIENTED – all marketing efforts begin and end with customer – focus is on consumer’s needs – philosophy is most consistent with long-term success of firm PRODUCTION ORIENTED – emphasizes development of the product and production efficiencies over other activities SALES ORIENTED – favours product sales over production efficiencies and customer preferences LO 1

9. INGREDIENTS OF A MARKET A market must have: Copyright © 2013 by Nelson Education Limited 6-9 Buying units or customers Purchasing power Unsatisfied needs LO 2

10. SEGMENTATION VARIABLES Copyright © 2013 by Nelson Education Limited 6-10 LO 2

11. LIMITATIONS TO FORECASTING Copyright © 2013 by Nelson Education Limited 6-11 LO 2

12. Copyright © 2013 by Nelson Education Limited 6-12 Breakdown (top down) Buildup process (bottom up) – Calculate market size – Calculate potential market share Production or retail capacity Competitive data – Develop sales forecast – Adjust to reflect competitive advantage LO 2 THE FORECASTING PROCESS

13. THE FORECASTING PROCESS BREAKDOWN PROCESS Copyright © 2013 by Nelson Education Limited 6-13 LO 2

14. THE FORMAL MARKETING PLAN Copyright © 2013 by Nelson Education Limited 6-14 MARKET ANALYSIS Customer profile – description of potential customers in a target market Sales forecasts – “most likely,” “pessimistic,” and “optimistic” Competition – Competitive matrix LO 3

15. MARKETING STRATEGY Copyright © 2013 by Nelson Education Limited 6-15 1.Marketing – Decisions affecting the total product 2.Promotional – Communicating information to the target market 3.Distribution – Decisions regarding product delivery to customers 4.Pricing – Setting an acceptable value on the product LO 3

16. BUILDING CUSTOMER RELATIONSHIPS Traditional CRM company-wide business strategy designed to optimize profitability and customer satisfaction focus on highly defined and precise customer groups Modern CRM customers rather than products changes in company processes, systems, and culture all channels and media involved in marketing effort, from Internet to field sales Copyright © 2013 by Nelson Education Limited 6-16 LO 4

17. ESSENTIAL MATERIALS OF A SUCCESSFUL CRM PROGRAM Copyright © 2013 by Nelson Education Limited 6-17 LO 4

18. CUSTOMER SATISFACTION COMPONENTS 1.Providing the most basic benefits 2.Offering general support services 3.Set up a system to counteract any bad experiences customers may experience 4. Delivering extraordinary services Copyright © 2013 by Nelson Education Limited 6-18 LO 5

19. CUSTOMER SERVICE CHECKLIST Exhibit 6-6 Copyright © 2013 by Nelson Education Limited 6-19 Customers’ experience Are we clear in the message we communicate to customers? How do we respond to customer concerns or complaints? Do we listen to our customers? Do we stand behind our products or services? Do repeat customers get treated as well or better than new ones? Are there other customer service activities unique to our business? LO 5

20. USING TECHNOLOGY TO SUPPORT CRM Copyright © 2013 by Nelson Education Limited 6-20 CRM software programs are designed to help companies gather all customer contact information into a single data management program – interpersonal contact – e-mails, letters, faxes – phone calls – Internet communication – FAQ, live chats LO 6

21. SIMPLIFIED MODEL OF CONSUMER BEHAVIOUR Copyright © 2013 by Nelson Education Limited 6-21 LO 7

22. POSTPURCHASE EVALUATION Cognitive dissonance PURCHASE DECISION How and where INFORMATION SEARCH & EVALUATION Evaluation criteria and Evoked set PROBLEM RECOGNITION Copyright © 2013 by Nelson Education Limited 6-22 STAGES IN CONSUMER DECISION MAKING LO 7

23. POSTPURCHASE ACTIVITIES OF CONSUMERS Copyright © 2013 by Nelson Education Limited 6-23 LO 7

24. PSYCHOLOGICAL FACTORS NEEDS MOTIVATIONS PERCEPTIONS ATTITUDES Copyright © 2013 by Nelson Education Limited 6-24 socialpsychological physiological spiritual LO 7

25. SOCIOLOGICAL FACTORS Copyright © 2013 by Nelson Education Limited 6-25 Culture Social class Reference groups Opinion leaders LO 7

26. DEVELOPING PRODUCT STRATEGY Copyright © 2013 by Nelson Education Limited 6-26 LO 8

27. PRODUCT STRATEGY OPTIONS One product/one market One product/multiple markets Modified product/one market Modified product/multiple markets Multiple products/one market Multiple products/multiple markets Product strategy alternatives Convincing nonusers to become customers Persuading current customers to use more Alerting customers to new uses for the product Growth tactics Copyright © 2013 by Nelson Education Limited 6-27 LO 8

28. BUSINESS ANALYSIS Product’s relationship to existing line Costs of Development and Introduction Available Personnel and Facilities Competition and Market acceptance Copyright © 2013 by Nelson Education Limited 6-28 LO 8

29. BUILDING THE TOTAL PRODUCT OFFERING Copyright © 2013 by Nelson Education Limited 6-29 PRODUCT BrandingTrademark Service mark LabellingPackagingWarranties LO 8

30. DISTRIBUTION STRATEGIES Copyright © 2013 by Nelson Education Limited 6-30 Distribution: – physical movement of products – establishment of intermediary relationships – to guide and support such product movement Physical distribution: – activities involved in the physical movement Channels of distribution: – intermediary relationships LO 10

31. DISTRIBUTION ALTERNATIVE CHANNELS Copyright © 2013 by Nelson Education Limited 6-31 LO 10

32. STRUCTURING A DISTRIBUTION SYSTEM 1.Cost 2.Coverage 3.Control 4.Transportation 5.Storage 6.Materials handling 7.Delivery terms Copyright © 2013 by Nelson Education Limited 6-32 LO 10