1. SMALL BUSINESS MANAGEMENT
Chapter 8
Marketing Management

2. How do we make a Buck?

3. The Role of Marketing Management in the Small Business
Defining the target customer, characteristics and wants and needs
Understanding the environmentals that affect operations
Developing the product and/or service
Developing the channels of distribution
Setting price levels of the product and/service
Promoting the product and/or service to those influential in its purchase

4. Target Customer Consumer Market Organization market Export market
How do find out info about the target customer> ________

6. The Consumer Market Demographics Lifestyle characteristics
________
Lifestyle characteristics
Activities, interests opinions
Purchase characteristics
What when _________ much of product
Purchase motivations
Why ?
Who Is Your Target Buyer?
Do you know precisely who your customers are? You may know many of them by name, but do you really know what type of people or businesses they are? For example, if you sell to consumers, do you have demographic information (e.g., what are their average income ranges, education, typical occupations, geographic location, family makeup, etc.) that identifies your target buyer?What about lifestyle information (e.g., hobbies, interests, recreational/entertainment activities, political beliefs, cultural practices, etc.) on your target buyer?This type of information can help you in two very important ways. It can help you make changes to your product or service itself, to better match with what your customers are likely to want. It can also tell you how to reach your customers through advertising, promotions,
.How can you refine your understanding of your own customer base? We suggest that you look at the issue from two angles:
niche marketing— identifying the heavy users of your product so you can direct your marketing efforts more precisely to those users
segmenting the market— dividing the existing market up into sections or segments that may become new niches for your business

7. The Organization Market
Companies and government agencies that purchase from small businesses
Influences on industrial demand
the _________ ,
government legislation and regulations,
potential competition
agencies that exert _________ on purchasers
The Bidding-Tendering Process
Canadian federal government contracts for about $14 billion in goods and services each year

8. The Export Market Government Assistance for Exporting
Unique _________ of the Foreign Market
Mechanisms of Exporting
Documentation, credit offered, distribution, Security

9. Influences External to the Market
The Economy
Competition
Legal _________
Social and _________ Environment
Technology
External

10. Influences External to the Market (Fig 8-6)
Management of External Influences
The Influences
Economy, competition, legal, socio/cultural, technology
The Possible Characteristics
System to Monitor
Possible Internal Adjustments

11. Developing the Product or Service
Develop Product and/or Service Policies
Decide how the product will be manufactured
Understand the _________ life cycle

13. Developing the Product or Service (cont)
Determine Factors that Accelerate Adoption
relative _________
complexity
divisibility
communicability of results

14. How the Consumer Classifies the Product and/or Service
convenience products
_________
shopping products
appliances, stereos, cameras
specialty products
Mercedes
Unsought
Funeral plots
The following are classifications for consumer products:
Convenience: Packaging is important to sell the product. Consumers will accept a substitute. Marketers focus on intense distribution, time utility. Convenience products can be categorized into staple (milk), impulse (not intended prior to shopping trip).
Shopping: Consumers expend considerable effort planning and making purchase decisions. IE appliances, stereos, cameras. Consumers are not particularly brand loyal. Need producer intermediary cooperation, high margins, less outlets than convenience goods. Use of sales personnel, communication of competitive advantage, branding, advertising, customer service etc. Attribute based (Non Price Competition), product with the best set of attributes is bought. If product attributes are judged to be similar, then priced based.
Specialty: Buyer knows what they want and will not accept a substitute, IE Mercedes. Do not compare alternatives. Brand, store and person loyal. Will pay a premium if necessary. Need reminder advertising.
Unsought: Sudden problem to resolve, products to which consumers are unaware, products that people do not necessary think of purchasing. Umbrellas, Funeral Plots, Encyclopedia!!

15. How the Organizations Classifies the Product and/or Service
Production Goods
Raw Materials:
Component parts: becomes part of the physical product
Process materials: not readily identifiable part of the production of other products
Support Goods
Major Equipment:
Accessory Equipment: Type writers and tools
Consumable Supplies: IE Paper, pencils or oils
Business to Business services: Financial, legal marketing research etc.

16. Developing the Distribution System (Fig 8-9)
Channel Options
Manufacturer to Consumer (Short-Direct)
Manufacturer to Wholesaler to retailer to consumer (Long-Indirect)
Channel _________
"we've eliminated the middle man and we're passing on the savings to you"-a typical broadcast from Supermarket XYZ

17. Setting the Price for the Good and/or Service
Cost- _________ Pricing
Demand- _________ Pricing
elasticity
Competition- _________ Pricing
Movement & Shift of demand curve

18. Types of Promotion Promotion Advertising Sales Promotion
types, advantages, disadvantages, suitability, costs
Sales Promotion
Public Relations
Personal Selling
Tv, radio, newspaper direct mail, outdoor, tradeshows, internet, magazines

19. Steps in a Promotional Campaign
1. Set Promotional Objectives (NUMBERS)
2. Determine the Promotional Target
3. Understand the Target’s Needs and Perceptions of the Product/Service
4. Develop the Relevant Theme
5. Determine the Method or Media to Use

20. Steps in a Promotional Campaign (cont)
6. Develop a Specific Promotional Message
7. Set the Promotional Budget
8. Implement the Program
9. Evaluate the Effectiveness of the Promotion

21. Concept Checks
1. What is marketing ?
2. What are the three target markets in which a small business can segment ?
3. What three areas should be investigated before developing an export market ?
4. What are the most common external influences that can affect a small business ?

22. 6. Explain the significance of the Product Life Cycle.
Concept Checks
5. What steps should an owner-manager follow in working with external influences ?
6. Explain the significance of the Product Life Cycle.
7. When would a small business have another company manufacture its product ?
8. What factors can assist speeding up the adoption rate of new products ?

23. 9. What are the consumer goods classifications ?
Concept Checks
9. What are the consumer goods classifications ?
10. What are the three main decisions in developing the distribution system ?
11. What characteristics help determine the length of the distribution channel ?
12. What characteristics require a more intensive channel ?

24. 13. What are the three methods of price setting ?
Concept Checks
13. What are the three methods of price setting ?
14. Define price elasticity.
15. What are the four methods of promoting a product or service ?
16. Identify the steps in developing a promotional campaign.

25. Appendices A. Agencies Providing Export Assistance
B. Advertising as Practised by Small Business
C. Directories of Trade Shows and Exhibitions
D. Checklist for a Marketing Plan