MARKETING THE SMALL

BUSINESS

Prepared by:

DR. EMERLITA S. NAGUIAT

 MARKETING

PROFESSOR WILLIAM STANTON - explains that

marketing is a transaction intended to satisfy human needs.

- refers to consumers and customers for goods and

services produces by an enterprises.

- also refers to the place or location where exchange of

goods and services take place.
Example : textbook – student - market
hamburgers – hungry passers by – market
 MARKETING
▣Function concerned with
planning and implementing
the conception, pricing,
promotion, and distribution
of products or services that
will satisfy the firm’s
objectives.
▣

A market is people with

▣ * needs to satisfy

* money to spend
▣ * willingness to buy

▣
 Marketing Management

Process of conceptualizing,
analyzing, implementing and
controlling marketing activities
to achieve the organization’s
desired key result areas.
 j
Ma or Marketing Functions

▣1. Exchange
▣ Functions
▣ a. buying
▣ b. selling
2. Distribution
Functions
a. transporting
b. storing
 3. FACILITATING
FUNCTIONS
a. financing
b. standardizing
c. grading
d. risk-taking
e. marketing information
4 P’S WHICH MAKE UP
THE MARKETING MIX
1. Product/Service offerings
2. Promotion or Communication Activities to
inform and encourage prospective buyers to buy
the product
3. Place or channels of distribution so that the
products can be accessible to the buyers
4. Price that is acceptable to both buyers and
PRODUCT - refers to what company sells.
tangible or intangible service.

Tangible products - are goods without can

be sensed by touch, smell, hearing, taste and
sight.
Ex. Cars, shoes, sewing machines, fruit
juice, cd etc.

Intangible products – services.

Ex. Banking services, repair services,
 VARIABLES OF PRODUCT
COMPETITION

▣ Features of the product

◼ sizes
◼ form/taste/odor/texture
◼ colors
◼ materials to be used
◼ chemical composition (if applicable)
◼ packaging
▣ Developing a product line
Ex. Tocino addition to longanisa or calamansi
juice – this is product line.
▣ Change the features of product or product line
Ex. Ice cream - monthly change the flavor.
LEVELS OF A PRODUCT

▣1. CENTER
▣2. TANGIBLE
▣3.
SUPPLEMENT
 CENTER
It refers to the primary reasons and of
consumers for purchasing a product.
Example, a laptop can be used both at
home and in the office. For users at home,
the laptop can be used for Internet
browsing, gaming, and simple word
processing. For office users, on the other
hand, a laptop can help in designing
presentations, drafting business letters, and
conducting researches.
 TANGIBLE
▣This part/level pertains to the
physical qualities/features of a
product.
▣For instance, the tangible parts
of a laptop include the screen,
hardware, keyboard, mouse
pad, and speakers.
 SUPPLEMENTS

▣ Marketers offer supplements or

add-ons to entice consumers to
make a repeat purchase of the
product. Examples of
supplements or add-ons include
free operating systems, long
warranty, flexible payment
terms, and free games.
 Classifications of Products

▣Consumer Products
▣Industrial Goods
▣Organizations/
Places/Ideas/
Persons
 Organizations/Places/Ideas/
Persons.
▣ When people try to market their skill and abilities, they
themselves become products.
▣ Job-seekers offer their services to land a position in a
company.
▣ Politicians market their platforms and credentials
during election campaign to gain leverage and voters
support in their quest for public office.
▣ All types of organizations market their firms to attract
more customers, employees, and investors.
▣ Places like Palawan are marketed to attract visitors
and generate employment for the locals. In advertising
companies, ideas are pitched to potential clients.
Marketing Concept vs. Selling Concept

▣ Selling - is one of the oldest professions.

▣ It is only part of marketing
▣ Marketing - includes an integration of
various functions such as:
▣ marketing research
▣ new product development
▣ advertising
▣ customer service
▣ distribution
▣ selling
MARKETING CONCEPT
▣It is a management orientation
which holds that the key task of the
organization is to determine the
needs and wants of the target
markets and to adapt the
organization to delivering the
desired satisfactions more effectively
and efficiently than its competitors.
SELLING CONCEPT
▣ It is management orientation
which assumes that consumers
will either buy or not buy enough
of the organization’s product
unless the organization to
delivering the desired satisfactions
more effectively and efficiently
than its competitors.
The marketing concept has been put
into action by many successful
enterprises like :

▣Eastman Kodak
▣Ford Motor

Company
▣Apple Computer
To implement the marketing concept, an
enterprise must:
▣ Get information about its customers and
potential customers.
▣ Determine customers’ needs and how
well the products of the firm and its
competitors satisfy such needs.
▣ Direct the marketing resources and
activities of the firm to improve products
and services together with reasonable
prices for customers’ maximum
satisfaction.
 IMPORTANCE OF CONSUMER SERVICE

▣ STEW LEONARD - owner and operator

of one of the largest and most successful
supermarkets in new England.
▣ His Rule No. 1 is that customer is always
right.
▣ His Rule No. 2 is that if the customer is
wrong, see rule No. 1.
▣
▣ Customers - are the most valuable assets.
The following are some approaches in customer
service :

▣ Train all employees to be

courteous.
▣ Coddle the customer

▣ Remember that dissatisfied

customers tell others about their

experiences.
▣ Listen to others about your

business.
 Why Do Consumers Buy

▣The product satisfies their

basic needs.
▣The product gives them
convenience.
▣The product provides a future.
▣The product offers fame.
▣The product protects them.
 PROMOTION
▣ these are activities that tell or inform
potential buyers about the product.
▣ - encompasses all forms of
communication that a firm chooses to
use in promoting the product.
▣
▣ OBJECTIVE : To inform and influence
the attitude of prospective buyers
favorably towards the product.
MAJOR TYPES OF PROMOTION

▣personal selling
▣advertising
▣sales promotion
▣point of purchase or product
display
▣Publicity * word of mouth
PERSONAL SELLING
it involves face to face selling through oral conversation.
▣ - it may take the form of sales calls by a
company representative, assistance by a sales clerk or
invitation to a dinner made by the entrepreneur to a client.
▣

▣ OBJECTIVES :
◼ To create product awareness.
◼ Arouse interest of the people.
◼ Develop product preference.
◼ Negotiate prices and other terms and obtain sales order.
▣ EXAMPLE : Door to door selling done by Euro clean man
 ADVERTISING
it is any paid form of presentation and
promotion of ideas, goods or services by an
identified sponsor.
◼ it involves such varied media as :
▣ print (magazine and newspapers)
▣ radio and television * specialty
advertising
▣ outdoor displays (items such as
pencil)
▣ direct mail * public transportation
▣ EXAMPLE : radio/TV commercials and jingles
 SALES PROMOTION
this is the component of the marketing mix that continually creates
and applies reinforcing materials and techniques which in turn
increases the affectivity of salesmen , distributors and dealers to
sell the company’s product and makes consumers eager to buy
them.

▣ EXAMPLE : Wrappers of the

product as an entry to a raffle where participants can win cash
and other prizes.
▣ free samples
▣ buy on take one offers
▣ money refund offers
▣ discounts
▣ demonstrations
▣ taste test.
▣

▣ POINT OF PURCHASE OR PRODUCT

DISPLAY - this is an important method
of making people aware that a product is
available.

▣ - enabling buyers to see, feel and smell a

product is an effective means
▣ of conveying to prospective buyers its

merits or good qualities.

 PUBLICITY
▣this takes the form of news releases,
public appearances of company
officials and participation in
industry-wide publicity efforts.
▣ EXAMPLE :
Publicity material sent to the radio
or newspaper may or may not be
used.
▣
 WORD OF MOUTH

▣Method of promotion
wherein people are
encouraged to tell other
people products or
services they have
enjoyed.
▣ PRICING STRATEGIES
PRICE
▣

▣ It is the value of a product or service

expressed in money.
▣ EXAMPLE OF PRICING STRATEGY:
▣ businessmen post P4.98 instead of P5.00
▣ others place “buy one take one”
▣ still there are those who combined several
low-price items
▣ marked the package P 9.95, instead of P 2.50
per item.
▣ PRESTIGE PRICING - a very high is
set to project an aura of quality and
status.

▣ PENETRATION PRICING - in the

case of new products, a very low price
for the new product is offered.
▣

▣
▣ It is much better to offer non-price
competition in the form of;
▣ quality
▣ service
▣ delivery
▣ safety
▣ guarantees
▣ safety
▣ cleanliness easy credit options
 BREAK EVEN ANLYSIS

◼ compares total revenues (TR) with total cost (TC).

▣ TR - represents income while TC – represents expense of the
enterprise.
▣ When TR is greater than TC, there is profit.
▣ When TC is greater than TR, it means loss.
▣ When TR equals TC , it is break-even. That is, there is no profit,
there is no loss.
◼ it is tool used by economist in solving managerial problems.
▣
▣ Break –even point sales volume (BEPSV)= FC
▣ USP-UVC
▣
▣ FC = Fixed cost
▣ USP = Unit selling price
▣ UVC = Unit variable cost
▣
▣ Example ; how many units must be sold in
order to break-even?
▣ FC = P 100,000, USP + P10, UVC = P 5
▣ P 100,000
▣ P 10 – P 5 = 20,000 units
▣ Break- even point selling price (BEPSP) = FC+VC
▣ Q
▣ FC = Fixed cost
▣ VC = Variable cost
▣ Q = Quantity
▣ Example : What should be the unit price to break even?
▣

▣ FC = P 100,000,
▣ VC = P 20, 000
▣ Q= 30,000
▣

▣ P 100,000 + P20,0000 = P 4
▣ P30,000
▣
STAGES IN TARGET
MARKETING
▣ MARKET SEGMENTATION - process of
classifying the market (customer/ consumers)
◼ process of dividing the total market into
smaller groups.
▣
▣ OBJECTIVES: To identify what particular
types of goods or services are most likely to be
purchased by particular groups of customers.
The market can be classified according to :

▣ Income
◼ high
◼ middle
◼ low
▣ Age
◼ infants ( 1 day to below 2 years old)
◼ pre- schoolers ( 2- 6 yrs. Old)
◼ teenagers (13-19)
◼ young professional (20-39)
◼ 40-59 adult professionals
◼ Senior citizens ( 60 and above)
▣ Sex
◼ male
◼ female
▣ Educational attainment
◼ no education
◼ elementary
◼ high school
◼ college
◼ graduate school
▣ Socio- cultural background
◼ race or ethnic
◼ religion
▣

▣ Geographical Location
◼ rural
◼ urban location
◼ town province
◼ region
◼ specific location in the world
▣ By occupation
◼ farmers
◼ teachers
◼ bank executives
◼ musicians
◼ engineers etc.
▣ Others
 Target marketing
▣Target marketing is researching and
understanding your prospective
customers’ interests, hobbies, and
needs so that you can focus your
message and your marketing budget
on the specific segment of the
market that is most likely to
purchase your product or service.
 MARKET POSITIONING
Refers to the consumer’s
perception of a brand or product
in relation to competing brands or
products. Market positioning
refers to the process of establishing
the image or identity of a brand or
product so that consumers
perceive it in a certain way.
 TYPES OF MARKET
SEGMENTATION

▣1. Mass Marketing

▣2. Segment Marketing
▣3. Niche Marketing
▣4. Micro Marketing
 MICRO MARKET
▣Retail sector, closely tied to the
vending machine industry that
utilizes automated self-checkout
technology in order to operate in
locations that need an unattended
payment experience.
TYPES OF CONSUMER
MARKET SEGMENTS