Home-grown Small Business Marking Basics Workshop

Developed/ Composed by Dr. Kazi Abdur RoufAssociate Professor

Noble International University, USANoble Institution for Environmental Peace, (NIEP, Canada

June 2013

Topics• Enterprise and components (6M’s) of a business• Define Market• Describe Market Process• Approaches to Marketing• Marketing Plan• Components of Marketing Plan • Describes 4 Ps of Marketing• Market Potential• Market Research• Describe How to Get Products to Customers/Advertizing • Factors to Consider when Setting Prices• Identify Good Selling Manners• Describe a Good Retail Lay-out• Consumer Behaviour: Understand Consumer• Promotional mix and Sales Pomotion

Business/Enterprise

A business can be defined as putting into practice an idea in such a manner that its products or service is then provided to benefit both the consumer and the owner.

Enterprise uses•Manpower (labour)

•Money (capital)

•Materials (stock)

•Machines (equipment and tools

•Methods (processes of production and management; and

•Market.

These are commonly called “6Ms” of a business.

Market and Marketing

• A market is a group of customers or potential customers who have purchasing power to buy products

• A market means who are going to buy your product or service

• Marketing is a process by which individuals obtain what they need and want through producing the goods and exchanging products and money with others

Small business marketing consists

Small business marketing consists of those business activities to

(1) Identify target markets

(2) Determine target market potential and

(3) Preparing, communicating and delivering satisfaction to the target markets at a profit

Market segmentation, marketing research and sales forecasting integral parts of what is commonly called market analysis.

Components of a Market • Potential customers to the business

• Purchasing power of the customers

• Satisfy the needs and interest of the customers

• Cultural and geographical difference of the market

• Sales forecasting (need to discuss separate session)

Market ResearchMarket Research: Gathering, processing, reporting and interpreting marketing market information.

It is a feasibility study of a business potential.

Market research is the process of finding out information aboutThe products the customers want

Who are likely customers?

Why should they buy the product?

What will influence them to buy the product?

Market Research When do the customers need the product?

Where are the customers located?

How much do you expect the customers to buy from you?

How much are they willing to pay for the product?

Who are the major competitors in terms of price, quality, and creativity?

Steps in Market Research

Identify information need

Search for secondary data

Collect primary data

Observational methods

Questing methods

Process and interpret the data

How do you do a Market Research?

You can ask the consumers by word of mouths

You can observe what people buy from your competitors

You can ask suppliers what they are mainly selling in order to determine what people are buying

You can develop a questionnaire with relevant questions about what you need to know.

You can interview the consumers directly.

How do you do a Market Research?

The information desired depends on the marketing problems you want to solve. •You can ask direct questions, indirect questions

•Open ended questions

•Open ended questions allow the consumers to answer as they wish •Ask close ended questions:

• Yes or, no • Agree or disagree, • Like or dislike.

Marketing factors

• Marketing factors are product, price, place and promote. • These 4ps are called marketing mix. • Promote means the customers know about your products.

Product Price Place Promotion

QualityDesignTypesStyleBrand namePackagingSizeServicesGuaranteesRejects

Selling price DiscountsCredit termsPayment period

Channels of distributionLocation of businessTransport

AdvertisingPersonal sellingPublicitySpecial offersPoint of saleTrade fairs etc.

Product Survey

When asking consumers, your questions must be clear and to the point.

Several ways you can ask questions to people to know customers need.

•Direct questions

•Indirect questions

•Open ended questions

•Closed ended questions

Marketing MixMarketing Mix: Marketing factors are product, price, place, promote and distribution activities combine is marketing mix.

Promote means the customers know about your products

Emphasis on to adopt a consumer orientation but products producers’ emphasis on production orientation

However, consumer orientation priority to customers CR not only emphasis on production and products efficiency, but also concern for customer satisfaction

CR contributes to long-term survival by emphasizing customer satisfaction. 

ProductProduct: Determine what is its quality, quantity, features, style, colour, brand name, etc.?

Before buying or producing a product you should first find out

•Needs of the customers

•Type of product they want to satisfy their needs

•What is its quality, features, styles, colour brand name, etc.

Price What are your total costs of producing the product?The prices of the competitors

What prices can your customers afford?

What are the prices of substitute products?

How much profit do you need to make from the sales?

Volume of sales

What are you going to do if your competitors are charging a price which is lower than your costs?

What are the prices of substitute products?

How much profit do you need to make from the sales?

Volume of sales

Place and PromotionPlace: Business location is very important for customers coming to your business.

Promotion: telling customers; who you are, what you do, where you are, what you have to sell and why customers should buy from you.

Place

Business location is very important for customers coming to your business. How near your business location to customers.

•Is it convenient for customers to come to your business in terms roads, subways, electricity and other facilities

• Are there any restrictions relating to your business products and services?

•From where people are used to buy

•How you are going to make the product available to the customers

•What are channels of distribution you would like use to promote your business?

•Channels: The long channels, medium channels and sort channels.

Remember marketing involves costs. Now a days usually people do not read flyers.

PromotionPromotion: telling customers; who you are, what you do, where you are, what you have to sell and why customers should buy from you.

Greet customers if possible call by names

Listen patiently to what customers say

Make customers understand benefits of the products

Let customers decide what to buy at their own speed. Don’t pressure to buy from you

Handle product with respect

Respect customers decision

Accept returns without quarrel.

Promotion continue-2

Promotion means building a good image of your business within the community.Promotion means making people aware of your products and influencing them to buy.

Promotion adds to the cost of your product or service

Good promotion tells everything about your product or service

Good promotion methods are posters, home visits, radio, handbills, good signs, and an interesting look at your place of business

Small business place that looks interesting may attract customers

Promotion continue-3 Successful business has many loyal, long-term customers

Promotion can help create a new need to potential customers

Promotion campaigns should aim to attract only new customers

Promotion involves two decisions: what is your message? How will you deliver the message?

Your promotion message should tell customers the benefits they can expect from the product

Promotion-4Promotion involves two decisions: What is your message? Successful business has many loyal, long-term customers

Promotion can help create a new need to potential customers

Promotion campaign should aim to attract new and exisiting customers

How will you deliver the message?

Your promotion message should tell customers the benefits they can expect from the product

AdvertisingThe basic aim of advertising is to sell or to increase the sales. Identify what kind, what channels you use for advertising your business.

•Use your community radio, community newspapers for advertising your business

•Distribute your business flyers to community centers, religious centers and niche shops

•Attend community fairs, display fairs and street festivals

•Use shopping bags, calendars

•Telephone directory and

•T-Shirt jersey.

•Associated with clubs, charity organizations, or donating to organizations

•Attractive shop, well light, clean products .

Remember

• Accept returns without quarrel. Respect customers’ decisions. Listen carefully to the customers complains Customers solutions suggested are acceptable. Never argue with customers. Never force customers to buy your products. Never lose your temper and angry/blast at customers. Don’t interrupt customers

when they are talking Never ignore customers Never allow customers to buy on credit

Marketing Plan• Components of marketing Plan• Market analysis• Identify customer profile, potential customers • Actual sales forecast-most likely, pessimistic and optimistic• The competition

Marketing strategy

Marketing decisions-basic products and services

Promotional decisions-communicate necessary info to target markets

Decisions regarding distribution of products

Identify your business 4Ps. 4Ps are you’re the marketing plan

All together is marketing mix.

Marketing Plan continue-2Identify your business 4Ps. 4Ps are your the marketing plan

Components of marketing plan are:

1. Marketing strategy: Who to sell to and how you contact them

 2. Service and guarantee policies

3. Advertising and Promotion: Participate in exhibitions, trade fairs, community fairs, street festivals, use posters, or local newspapers

4. DistributionHow are you going to distribute your products?Will you sell direct to the customers, or the wholesalers?5. Pricing policies 6. Sales policies

 

Components of Marketing Plan-1

Marketing strategy: Define who you are going to sell to. How you contact them.

Pricing policy: Find out what is effective and attractive price of each product

 Right pricing is important in order to penetrate the market. Compare your products prices with those of the competitors

•Justify high price if it is

•If lower price, justify how you make profit

•If use special price, why-High season/ low season, attract customers or closing business or sell old stuffs Sales tactics: How sell the product? Use personal selling or mail orders selling, etc.?

  

Components of Marketing Plan: continue-2

Sales tactics How are you going to sell the product?

Are you going to use personal selling or mail orders selling, etc.?

Service and guarantee policies

Advertising and Promotion: Are you going to participate in exhibitions, trade fairs, community fairs, street festivals, use posters, or local newspapers?

Components of Marketing Plan-3

DistributionHow are you going to distribute your products?

Will you sell direct to the customers, or the wholesalers?

•How to make a retail layout attractive

•Appearance of the outside business should be decent

•Unpleasant image from the outside could negative images to customers.

Stages of Marketing Plan It is a description of a specific target market or customers (sex, age group income

groups, geographical areas).

Who do you plan to sell to?

What percentage of the market share do you intend capturing in the short-term and long-term and why?

How much do you think you are going to sell? Stage-1: Estimate your monthly sales

Stage-2: Determine your profit 40%

Stage-3: Determine cost of goods to be sold

Stage-4: Determine average stock turnover rate

Stages of Marketing Plan continue-2

• Stage5: To determine the average stock needed per month, you divide the cost of goods sold (stage 3) by (stage 2) the stock turnover (stage-4)

• Stage-6: Find out the amount of stock in the business (stock on hand)

• Stage-7: Determine by what amount is the existing stock too much or little. You do this by subtracting figure (stage 6) from figure (stage 5)

• Stage-8: To find out amount of goods to be bought you add (stage7) to the cost of goods to be sold (stage3)

• In stage 7, you had found out that the stock on hand (figure), you were going to subtract figure (stage-7) from figure (stage-3).

Stages of Marketing Plan continue-3• You need to describe what your competitors’ can do better than you and what their

weaknesses are

• What is it that you can do better than they?

• What is your own business weaknesses compared to your competitors?

• How are you going to overcome the strengths of your competitors?

• How you are going to make the consumers know about the existence of your business products or services you provide

• How are you going to set up your prices?

• Will your prices be lower or higher than your competitors?

• Why? How are you going to sell the products or services to the consumers? 

Promotional Plan• Entrepreneurs’ approach to create customers awareness of the products/services

• Different options: personal selling and advertising

• Campaign for the products

• Distribution plan

• Pricing plan

Consumer Behaviour

• Understanding the customers

• Sociological factors- culture, social class, reference groups, opinion leaders

• Psychological factors- needs, perceptions, motivations, attitudes

Factors to consider in Visual Merchandising Displaying the goods in a clean and well organized shop is always more attractive

for customers A big place with few products is not attractive for customers No overcrowded products display Proper lightning over the products Posters can be used for messages, such as price Think about color of the wall put in the room Effective and attractive ways of showing prices tags Don’t sell old stuffs, out of fashion stuffs A big mass of products gives a cheap impression Security is important Remember: good and effective visual merchandising is the cheapest marketing in

retailing business.

Attractive business place

How to make a retail layout attractive

Appearance of the outside business should be decent. Unpleasant image from the outside could negative images to customers.

Factors to consider in Visual Merchandising

Displaying the goods in a clean and well organized shop is always more attractive for customers

Proper lightning over the products

 Find someone who is successful in business and make your product like her/his to will be successful

Negotiations Skills• State what you are going to talk and what your goal is

• Listen carefully

• Understand and state the problem clearly

• Setting out proposals for logical solutions

• Summarize and conclude

• Handle resistance in positive approach

• Agee where possible

• Disagree agreeably

• Keep your temper

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Steps in Selling

Three steps are in selling: 1.Finding out customers’ needs

2.Presenting your product and

3.Making the sale.

Product Strategy Alternatives for Small BusinessProduct strategy alternatives for small businessOne product/one market: soft water designing

One product/multiple markets: product rep.

Modified product/one market: explore new market

Modified product/multiple markets: new improved products and phased out the products-detergent product. Naturopath products-Bell products,

Multiple products/one market: Many products add to market as customers liked: Bell products

Product Strategy Alternatives for Small Business continue-2

Multiple products/multiple markets: Wood burning stoves vs. gas-burning stoves

Alternatives strategy: Local dealers selling Italian sewing machine might add microwave ovens sell

Convince nonusers in the market to become customers

Persuade current customers to use more of the product

Alert current customers to new uses for the product

Building the Total Product Offering• Branding-identifying the products both verbally and symbolically: Xerox is a

brand

• Rules in naming products

• Select the name that is easy to pronounce and remember

• Choose a descriptive name- major benefit of the products extremely helpful

• Use a name that can have legal protection

• Don’t copy anyone else’s brand

Building the Total Product Offering continue-2

• Select names with promotional possibilities

• No long names

• Select a name of the new products that has no similar band

• Packaging

• Labelling

• Warranties: promise to maintain certain standards- cost, service capability, competitive practices, customers’ perceptions and legal implications.

Types of Advertizing

• Product advertizing and institutional advertizing

• Advertizing regularly

• Where to advertize-depends on types of businesses

Promotional mixPromotional mix involves a blend of such personal and non-personal techniques.

Promotional mix methods are •Advertizing •Personal selling and •Sales promotion-is determined by many factors.

•First factor is geography

•Second identifying target customers

•Third: product’s characteristic: personal selling is an effective method for promoting high tech products

•Fourth: Determine promotional expenditures

Promotional Mix• Fifth: Personal selling need to know importance of product knowledge

• Sixth: Sales presentation

• Seventh: Prospecting: continuously looking for new customers Techniques are personal referrals from friends, customers and other businesses

• Eighth Impersonal referrals: media, publications, public records and directories. Trade magazines

• Ninth: Market initiation contacts: telephone calls, mail survey

• Tenth: Customer-initiated contacts

Promotional Tools

Personal promotion-is an inclusive promotional technique other than personal selling, advertizing and public relations

Sales promotional Tools•Specialties, Publicity, Trade Show Exhibits

•Sampling, Coupons, Premiums, Contests

•Point of purchase displays, Free merchandize

•Understanding other culture.

Practicing the Sales Presentation• Practice makes perfect

• Comparing the products

• Relating a case history

• Demonstrating the product

• Giving guarantee

• Asking questions

• Showing what delaying a purchase might cost

• Admitting and counterbalancing: Customer’s objection is valid. Acknowledge limitation

Practicing the Sales Presentation

• Hearing the customer out: empathetic listening to resistance of the objection to products

• Making the objection boomerang (return): If customer says, I am too busy...”. Sales person might says, “That’s why you should see me...”

• Using the ‘Yes’ but technique: Technically say Yes, but

• Building customer Goodwill

Next Workshop Session

Business Plan Venue NIEP Office

403-720 Spadina Ave.

Next Workshop DateJuly 13, 2013

Thank youAny Questions

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