MARKETING THE SMALL

BUSINESS
► Marketing is that function with planning
and implementing the conception,
pricing, promotion, and distribution of
products or services that will satisfy the
firm’s objectives.
Small Business and the marketing
Concept
The marketing concept provides a
guide to small business. It indicates that
a match must be made between its
 intended customer and the firm’s
product or service offerings. To achieve
the desired match, the following
questions must be answered.
► Who are my customer?
► What products or service are needed or service required. ► At
what price are the products or services required? ► At what
place are identified products or services required? ► At what
time are the identified products or services required?
► Atwhat mode of delivery are the identified products or
services required?
To provide answers to the questions cited above, the firm must
undertake the following:

Aspects to be undertaken by the

firm to provide answers those
questions cited above.
1. Devise a Marketing Strategy
2. Engage in marketing
research 3. Develop a
marketing Mix. 4. Identify the
size of the target market.
Devising a Marketing
Strategy
► Marketing strategy is the general guide the
SBO will use to achieve the firm’s marketing
goaservices into the hands of customers in a
timelyl. It is a plan for getting products and,
cost-effective, and appropriate manner.
Market Strategy Planning

► Is a small business activity which seeks to find

attractive opportunities and develop profitable
marketing strategies.
► The strength and weaknesses of the firm are
recognized in strategy planning.
► This is followed by an analysis of the external
environment which is useful in identifying
 attractive market opportunities.
► The output of market strategy
planning is the firm’s marketing
strategy and it contains the
following:
1. The target market;
2. The applicable marketing mix; and
3. The size of the market area.

Target Marketing

► Refers to the activity of selecting well defined

groups of potential customers and tailoring a
marketing mix to their needs and
 preferences
► Steps of Target Marketing:
1. Identification of the target market;
2. Identification
of the characteristics of the target
market; and
3. Measurement of the size of the target market
area.
The Market Strategy Planning
Identify strengths and
Process
weaknesses of the
firm

Analyze external environment

 Identify attractive market

opportunities Identify target market

Determine applicable marketing mix

Determine size of market area

Identification of the Target

Market
► A target market is defined as the particular market
segment the firm wishes to serve. This segment is
 singled out from an array of market segments the
firm has chosen to serve.
► Before Deciding on the Target Market
► Before the market segment to be served is identified,
the SBO must first decide on the number of segments
he wishes to serve.
Continuation

► The firm could choose any of the following

1. A mass market company – which sells goods
and services to a broad spectrum of buyers;
2. A market-segment company – which aims to sell
to a single market segment; or
3. A multi-segment company – which aims to sell at
 two or more distinct market segments.

Choosing the Target

Market
► When deciding on which market segment to reach, it is
necessary for the SBO to consider the following:
1. The goods or service category of the firm; 2.
The firm’s goals;
3. What competitors are doing;
4. The size of the various segments ;
5. The relatively efficiency of each segment to the firm;

Choosing the Target

Market (cont)
 6. The sources required; and
7. Other factors
►A prospective SBO considering education as his
business choice may be considered as an example
of one who is identifying his target market. The
education market may be
segmented into the following:
► preschool,elementary, high school, college, and
vocational.

Identifying the
Characteristics of the Target
Market
► To effectively serve the target market, its characteristics must be
known to the SBO.
► Relevant characteristics will refer to any of the following: age, sex,
 family size, family life cycle, income, occupation, religion, race,
nationality.
► An education institution, for instance, must have some information
about the income of the prospective student’s family. This is
important in devising an appropriate marketing mix.

Measuring the Size of the

Target Market Area

► Inthe attempt to make a match between the firm and the

target market, the SBO must be provided with information
about the following:
1. The number of potential customer, and
2. The population growth trend of the target market area.
► Knowing the number of potential target customers will provide
the means for ascertaining the most economical approach to
reach them.
 Identifying a Target Market
School moderately desirable
characteristics

The Identified with less

target College desirable
characteristics
market
Pre Vocational Identified with less
desirable
school Identified with highly
characteristics
desirable
characteristics Identified with the
Elementary least desirable
characteristics

High Identified with

The Marketing Mix

 ► The
purpose of target marketing is to develop a
marketing mix that is appropriate for the
company

► Marketing mix – refers to the set

of marketing tools that the firm
uses to pursue its marketing
objectives in the target market.
The Marketing Mix (cont)
► The marketing tools are the controllable variables that when properly
blended constitute the marketing mix.
► The controllable variables are the following:
1. Product offering (including the breadth of the product line, quality
levels, and customer services;
2. Price

3. Promotion (advertising, sales promotion and sales force decision); 4.

place (or distribution)

The Marketing Mix (cont)

 ► Themarketing mix is intended to assist or influence the
customer in his purchasing decision.
► Each of the variables, separately or jointly, attract the
buyer
► The job of the small business operator is to provide a
blending of the variables that will lead the customer to
make a purchasing decision favorable to the
company.

The Marketing Mix (cont.)

► Product offering – the products sold by the firm could be

offered so that customers will prefer them over competition.
► The products may involve a
 ► physical goods,
►a service, or
►a combination of both.

► The price – is charged for the products offered sale.

► In
setting the price, the primary consideration is profits, but it must be
determined in relation to cost of production and marketing.
► The price of the competition must be considered .

The Marketing Mix (cont)

► Promotion – refers to communicating information

between the company and potential buyers to
influence buying attitudes and behavior.
► The following are the forms of promotion:
1. Personal
selling – this involves direct
communication between sellers and potential
customers.
The Marketing Mix (cont)

2. Advertising– this consist of any form of paid,

non-personal presentation of ideas, goods, or
services.
3. Salespromotion – this is a promotion activity that
stimulates interest, trial, or purchase by final
customers.
• Examples of sales promotions are the use of
• coupons,

• point-of-purchase display materials,

• samples sign,
• catalogs,

• novelties,

• circulars.

The Marketing Mix (cont)

 ► The place – refers to making products available in the
right quantities and locations when customers want
them.
►The firm is confronted by the need to
move products from the place where
they are produced to the place where
they are purchased by the final
customer.
►Most often, this element is facilitated
by middlemen such as wholesalers
and retailers.
The Importance of Market
Research
Knowing the needs of the target market customers will be very helpful in
designing the right marketing mix. To describe the customer, market
research is the tool to use.
► Types of Market Research
1. Primary
research – the firm could obtain primary data about
potential customers and competitors through any of the following
methods:
a) Observation;

b) Survey; and
c) Experimentation

The Importance of Market

Research
➢Observation method – involves
collecting data by observing the
actions of a person or a group of
 persons.
➢Survey method – consist of gathering
data by interviewing people. This
may be undertaken through any of
the following techniques: personal
interview, telephone survey, by mail,
or by the Internet.
The Importance of Market
Research
➢ Among the four data gathering
techniques, the personal interview is
the most expensive and time
consuming.
 ➢ Face-to-face communication is
required, arrangements must be made
for respondents to appear on some
appointed dates.
➢ Costly as it is, the personal interview is
superior to the other techniques when
in- depth opinions are required.
The Importance of Market
Research
➢Information can be collected quickly
and at the least cost through
telephone survey.
❖the telephone survey will require
only the following:
 1. A sound questionnaire;
2. A representative sample group;
and
3. Courteous telephone interviewers.
The Importance of Market
Research
2. Secondaryresearch – the information provided by
secondary sources are those previously gathered by
other persons or institutions to satisfy their own specific
requirements

➢ The possible sources of

secondary data are the
following: (1) The Company’s
 Record; (2) Libraries; and (3)
Government Agencies.
The Importance of Market
Research
➢The company’s internal records are
important sources. Sales report, for
instance, may provide some clues on
customer behavior.
➢Good libraries provide information
that may be useful to the small
business operator. The vast
collections of original studies kept by
some libraries include those that refer
 to small business.
The Importance of Market
Research
➢The useful sources of secondary data
that found in many libraries are the
following:
1. The Philippine Yearbook;
2. The Top 1,000 Corporations; and
3. Profile of Philippine Industries.
The major libraries which may be useful
to the small business owner are the
following:
The Importance of Market
Research
1. National Library at Ermita, Manila;
2. University of the Philippines – Institute of
Small Scale Industries Library;
3. Development Academy of the
Philippines Libraries at Pasig City;
4. Asian Institute of Management Library
at Makati City; and
5. Polytechnic University of the Philippines
Library at Sta. Mesa, Manila.
The Importance of Market
Research
➢There are government agencies that
generate information intended to assist
various users:
1. Entrepreneurs of educational
institutions;
2. The commission on Higher Education;
and
3. Department of Education
• Providebasic data on the number of
schools operating in specific areas, the
courses offered, the number of
students, and others.
► ACTIVITIES TO FOLLOW
► Quiz

► Case Analysis.