Marketing for SMEsMarketing for SMEsHow to guide SMEs How to guide SMEs marketing efforts?marketing efforts?

Marketing WeaknessesMarketing Weaknesses

Marketing is often seen as a weaknessMarketing is often seen as a weakness Requiring external support & consultingRequiring external support & consulting

Many SMEs do not haveMany SMEs do not have Clear marketing functionClear marketing function Formal marketing planFormal marketing plan Selling/salesmanship managerSelling/salesmanship manager Sales analysis methodologySales analysis methodology Salesmanship trainingSalesmanship training

But ………But ………

Marketing StrengthsMarketing Strengths

Most SME entrepreneurs have personal Most SME entrepreneurs have personal knowledge of their position in the marketknowledge of their position in the market

Informal relationship with customers & Informal relationship with customers & staff to identify own problem areasstaff to identify own problem areas

Informal marketing methodsInformal marketing methods Trade newspapers/magazines/web sitesTrade newspapers/magazines/web sites Trade fairs & exhibitionsTrade fairs & exhibitions Business associationsBusiness associations Personal networksPersonal networks

Marketing Strengths Marketing Strengths contcont

Personal recommendationsPersonal recommendations Word of mouth salesWord of mouth sales Repeat ordersRepeat orders Customer loyaltyCustomer loyalty

Unwritten marketing planUnwritten marketing plan Conceived in entrepreneurs headConceived in entrepreneurs head No/little commitment to paperNo/little commitment to paper

Developing marketing profileDeveloping marketing profile

Successful marketing requires:Successful marketing requires:

Perception of customers’ needsPerception of customers’ needs Which can be met by a particular service or productWhich can be met by a particular service or product

Awareness of competitors’ strengths & Awareness of competitors’ strengths & weaknessesweaknesses

Awareness of changing business climateAwareness of changing business climate Understanding of selling & salesmanship skillsUnderstanding of selling & salesmanship skills Coherent marketing mix (price, product, Coherent marketing mix (price, product,

promotion, place)promotion, place) Focused on customer needsFocused on customer needs Market potentialMarket potential

Identifying Market PositionIdentifying Market Position

Customers’ NeedsCustomers’ Needs Clarification of needs for SME to meet with a Clarification of needs for SME to meet with a

Unique Selling Proposition (USP)Unique Selling Proposition (USP)

Establish SMEs performance in marketEstablish SMEs performance in market Understanding of changing needsUnderstanding of changing needs

Understand competition & business Understand competition & business environmentenvironment

Nature & focus of selling & sales functionsNature & focus of selling & sales functions Coherence of marketing mix (4 Ps)Coherence of marketing mix (4 Ps)

Market Profile AssessmentMarket Profile Assessment

Customers’ Needs

PerformanceAudit

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

Profile AssessmentProfile Assessment

Successful entrepreneurs will be able to Successful entrepreneurs will be able to talk through profiletalk through profile

Should not need comprehensive data Should not need comprehensive data collectioncollection

Should not need to commit to paperShould not need to commit to paper Should be in entrepreneurs headShould be in entrepreneurs head

Personal ability & desire will determine Personal ability & desire will determine successful marketingsuccessful marketing

Profile Assessment Profile Assessment contcont

Help to articulate thoughts onHelp to articulate thoughts on Degree of awareness about market functionsDegree of awareness about market functions Assess position in market placeAssess position in market place Degree to which SME delivers what customers Degree to which SME delivers what customers

really need (or want?)really need (or want?) Give a clear overview of where SME is in terms Give a clear overview of where SME is in terms

of its marketing effortsof its marketing efforts Identify where support is needed to develop Identify where support is needed to develop

better marketing techniquesbetter marketing techniques

General ConsiderationsGeneral Considerations

Firms survival depends on how well it Firms survival depends on how well it understandsunderstands

Changing market conditions dictated by:Changing market conditions dictated by: Customers needsCustomers needs Competitor activityCompetitor activity

Effective marketing requiresEffective marketing requires Market researchMarket research Strategy formulationStrategy formulation Task based implementationTask based implementation

Marketing StrategyMarketing Strategy

Product orientationProduct orientation Emphasis on product itselfEmphasis on product itself

Production orientationProduction orientation Cost or ease of productionCost or ease of production

Market orientationMarket orientation What problems do customers have?What problems do customers have? Who has these problemsWho has these problems How can you address those problemsHow can you address those problems

Marketing Strategy Marketing Strategy contcont

Market – orientation (Market – orientation (contcont)) Identify new marketsIdentify new markets Finds new products for existing customersFinds new products for existing customers Finds new customers for existing productsFinds new customers for existing products Identifies competitionIdentifies competition Public image consistency – internal v external opinionPublic image consistency – internal v external opinion

Pricing policyPricing policy Cost plus – accountants approachCost plus – accountants approach

Percentage add on per itemPercentage add on per item Profit per batchProfit per batch

What market will bear – entrepreneurs approachWhat market will bear – entrepreneurs approach Credit sales – salesman’s approachCredit sales – salesman’s approach

Sales ManagementSales Management

Training & motivation of salesmenTraining & motivation of salesmen Ensure share time between Ensure share time between

existing clients & potentially new clientsexisting clients & potentially new clients Large & small clientsLarge & small clients

Effective use of advertising Generate curiosity & interest Helps get appointments & breaks ice at

sales meetings

Advertising & PromotionAdvertising & Promotion

Be careful not to set advertising budgets Be careful not to set advertising budgets as percentage of salesas percentage of sales

Plan a promotion campaignPlan a promotion campaign Set objectivesSet objectives & budget accordingly& budget accordingly

Balance with resources availableBalance with resources available Be clear about expected sales from Be clear about expected sales from

campaigncampaign

Physical DistributionPhysical Distribution

Know shipment origin & destinationsKnow shipment origin & destinations Intermediate storage needsIntermediate storage needs Trans-shipment requirementsTrans-shipment requirements

Analysis of long production runsAnalysis of long production runs Versus storage costsVersus storage costs Service requirementsService requirements

Use logistics software to planUse logistics software to plan Assess use of own transport versus out-Assess use of own transport versus out-

sourcingsourcing

Distribution ChannelsDistribution Channels

Assess use of wholesalers versus dealing Assess use of wholesalers versus dealing with retailerswith retailers

Spend time understanding pros/cons of Spend time understanding pros/cons of retail v wholesaleretail v wholesale

Consider using wholesalers with Consider using wholesalers with entrepreneurial flairentrepreneurial flair

Introduce incentive schemesIntroduce incentive schemes

Advantages/disadvantages of large sales Advantages/disadvantages of large sales forceforce

Packaging & Product DevelopmentPackaging & Product Development

Give resources to undertake appropriate Give resources to undertake appropriate market & consumer researchmarket & consumer research

Understand new consumer trends & Understand new consumer trends & changing needschanging needs

Plan aheadPlan ahead

Involve professional marketing personnelInvolve professional marketing personnel At beginning of processAt beginning of process ““New product task force”New product task force”

Discussion PointsDiscussion Points

How important is marketing to an SME?How important is marketing to an SME? How useful are the 4 P’s?How useful are the 4 P’s? Where would you go for marketing advice?Where would you go for marketing advice? How much of your budget should you spend How much of your budget should you spend

in marketing efforts?in marketing efforts? How best would you spend that budget?How best would you spend that budget? How often do you speak to your customers How often do you speak to your customers

about your products or services?about your products or services? How often do you change your product How often do you change your product

range?range? How do you find new customers or look for How do you find new customers or look for

new products?new products?