Marketing for SMEs

1. Marketing for SMEs How to guide SMEs marketing efforts?

2. Marketing Weaknesses • Marketing is often seen as a weakness • Requiring external support & consulting • Many SMEs do not have • Clear marketing function • Formal marketing plan • Selling/salesmanship manager • Sales analysis methodology • Salesmanship training • But ………

3. Marketing Strengths • Most SME entrepreneurs have personal knowledge of their position in the market • Informal relationship with customers & staff to identify own problem areas • Informal marketing methods • Trade newspapers/magazines/web sites • Trade fairs & exhibitions • Business associations • Personal networks

4. Marketing Strengths cont • Personal recommendations • Word of mouth sales • Repeat orders • Customer loyalty • Unwritten marketing plan • Conceived in entrepreneurs head • No/little commitment to paper

5. Developing marketing profile Successful marketing requires: • Perception of customers’ needs • Which can be met by a particular service or product • Awareness of competitors’ strengths & weaknesses • Awareness of changing business climate • Understanding of selling & salesmanship skills • Coherent marketing mix (price, product, promotion, place) • Focused on customer needs • Market potential

6. Identifying Market Position • Customers’ Needs • Clarification of needs for SME to meet with a Unique Selling Proposition (USP) • Establish SMEs performance in market • Understanding of changing needs • Understand competition & business environment • Nature & focus of selling & sales functions • Coherence of marketing mix (4 Ps)

7. Market Profile Assessment Customers’ Needs Performance Audit Competitors Business Environment Selling Effort Market Mix Key needs Segmentation SME’s USP Sales & profits By product group By location By customer By distribution channel Competitors’ SWOT Market trends Who sells? How well know product range/ SME USP? Sales conversion rate Effectiveness of feedback Pricing policy Promotion & advertising Place – location of SME/customers Product – still valid in market place Marketing Plan & Strategy

8. Profile Assessment • Successful entrepreneurs will be able to talk through profile • Should not need comprehensive data collection • Should not need to commit to paper • Should be in entrepreneurs head • Personal ability & desire will determine successful marketing

9. Profile Assessment cont Help to articulate thoughts on • Degree of awareness about market functions • Assess position in market place • Degree to which SME delivers what customers really need (or want?) • Give a clear overview of where SME is in terms of its marketing efforts • Identify where support is needed to develop better marketing techniques

10. General Considerations • Firms survival depends on how well it understands • Changing market conditions dictated by: • Customers needs • Competitor activity • Effective marketing requires • Market research • Strategy formulation • Task based implementation

11. Marketing Strategy • Product orientation • Emphasis on product itself • Production orientation • Cost or ease of production • Market orientation • What problems do customers have? • Who has these problems • How can you address those problems

12. Marketing Strategy cont • Market – orientation (cont) • Identify new markets • Finds new products for existing customers • Finds new customers for existing products • Identifies competition • Public image consistency – internal v external opinion • Pricing policy • Cost plus – accountants approach • Percentage add on per item • Profit per batch • What market will bear – entrepreneurs approach • Credit sales – salesman’s approach

13. Sales Management • Training & motivation of salesmen • Ensure share time between • existing clients & potentially new clients • Large & small clients • Effective use of advertising • Generate curiosity & interest • Helps get appointments & breaks ice at sales meetings

14. Advertising & Promotion • Be careful not to set advertising budgets as percentage of sales • Plan a promotion campaign • Set objectives • & budget accordingly • Balance with resources available • Be clear about expected sales from campaign

15. Physical Distribution • Know shipment origin & destinations • Intermediate storage needs • Trans-shipment requirements • Analysis of long production runs • Versus storage costs • Service requirements • Use logistics software to plan • Assess use of own transport versus out-sourcing

16. Distribution Channels • Assess use of wholesalers versus dealing with retailers • Spend time understanding pros/cons of retail v wholesale • Consider using wholesalers with entrepreneurial flair • Introduce incentive schemes • Advantages/disadvantages of large sales force

17. Packaging & Product Development • Give resources to undertake appropriate market & consumer research • Understand new consumer trends & changing needs • Plan ahead • Involve professional marketing personnel • At beginning of process • “New product task force”

18. Discussion Points • How important is marketing to an SME? • How useful are the 4 P’s? • Where would you go for marketing advice? • How much of your budget should you spend in marketing efforts? • How best would you spend that budget? • How often do you speak to your customers about your products or services? • How often do you change your product range? • How do you find new customers or look for new products?