The wonderful world of small business

Small business marketing is a huge topic, people write books about it that still don’t tell you everything, so what we’re hopefully going to do here is let you know the really important bits about small business marketing and how you can use them in your business. What you think marketing is now, might well change as you read on, but hopefully we can show you how you can use it in your particular business.

So what is marketing?

Selling, promotion, research, finance, planning? Well, it’s all of those things and also a few more. Marketing is all about how you run your business –  it isn’t just about how you sell your product or service, a very common misconception. To understand small business marketing and how it can affect your business, you really need to understand a couple of the key ‘theories’ of marketing – it’s all textbook stuff, so please bear with me!

‘Produce and sell’ 

Marketing has changed a lot over the past fifty years or so.  The original way of doing business was based around production or ‘what can we make?’ or ‘what service can we offer?’ questions. What a business did was linked to what it could do rather than what their customer actually wanted.  The process goes something like this – someone in the company sees that the production line making widget ‘x’ isn’t making as many widgets as it could.  This person speaks to the research department about adding a new widget, lets call it widget ‘y’, to the production line.  The research department adds a new button to widget ‘x’ and has designed widget ‘y’.  The new widget goes into production and the production line is full once more.  Now the sales and promotion team has to go to work – they have to sell as many of the new widgets as possible to make sure the company doesn’t lose money by making them.  And here lies the main problem with ’produce and sell’ marketing - nobody actually knows whether anyone wants to buy widget ‘y’ - it was only made because it could be.  What if people thought that widget ‘x’ was good enough and don’t want to pay the extra money for widget ‘y’?  One of the most obvious signs of this type of marketing is in high volume advertising – products or services developed in this way will normally get far more television and other media exposure to make sure that people understand the benefits of the new product over the old.

The principle still applies whether what’s being sold is a product or a service and applies to businesses large and small and it’s not necessarily the wrong way to do things, it just has to be applied to the right type of product – things that sell at very high volumes such as soft drinks or mobile phones or perhaps things that we buy out of necessity – household cleaning products or food, for instance.  The big risk, of course, is finding that no-one wants your new product, no matter how much money you throw at sales and promotion!

‘Ask your customers’

It might seem like a ridiculous statement, but if your marketing strategy is based around the ‘produce and sell’ theory then you don’t really ask your customers what they want, you just make or do things because you can.  Using the modern ‘marketing’ approach involves understanding what your customers want from a product or service:  what it should do; how much they would pay for it, how often they would pay for it, etc, etc.  This approach uses information from a marketing department to tell the research and development department what the customers want.  The R&D department then work with the production and finance departments (who’ve also been told by marketing how much people are willing to pay and how often they’re likely to buy) to develop a product that meets all of the customer needs – price, functionality, availability, etc. 

This method has major advantages over ‘produce and sell’ for almost all products and services – you should know, before you even start production, how many people will buy and for how much.  There has been a bit of cost involved in getting this information, but the theory goes that if you base your organisation around the ‘marketing’ principle you shouldn’t really need to sell your product – it should sell itself because it’s filling a gap that customers wanted filling, rather than just joining the back of a long line of similar products.

How does this apply to my small business marketing?

You might have read this far and be thinking ‘how is this going to help me in my business?’.  Well, you’ve just got to think ‘smaller’ – you probably haven’t got marketing, research and development, finance and production departments – chances are, you and maybe a couple of other people are all of those departments, but it’s the process that’s important, not how many people are involved.  Chances are, as a small company, you need to use the ‘marketing’ approach and find out what your potential customers want before you take the plunge into a new product or even a new business – setting off believing people will buy any product you make or any service you offer can be a very costly mistake, just watch Dragons Den on the BBC to see this in action - you need people to give you honest feedback about what you’re proposing and please make sure that you don’t just ask friends and family, who are going to tell you anything you say sounds great!!

Getting your small business marketing right should drive every aspect of your business and enable you to plan further ahead, giving better stability in your business – if you need help, get in touch to find out how we can work with you and change the way you do business.

Tags: business start-ups, small business marketing

This entry was posted on Tuesday, June 15th, 2010 at 1:59 pm and is filed under New business start-ups, Small business management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.