Sales and Marketing Challenges for Small Firms

 Introduction to Sales and Marketing - marketing is the commercial and practical activities involved in the marketing research, pricing, production, promotion, branding, advertising, distribution and selling of products and services, to meet customer needs and wants.  For small business owners delivering business services, the development of a well thought through marketing strategy is essential in differentiating themselves from their competitors.  The application of marketing principles and practices should apply regardless of the type of industry or business in which a small firm operates.  All firms are involved in some form of selling and so need be able to identify buyer's needs using marketing principles.  Failure to do so may mean prospective consumers cannot see any value in a firms flawed offering.  Similarly, business customers will not perceive any quantifiable business benefits in the product or service on offer.

 Developing a Marketing Strategy - when entrepreneurs set up a new business, launch a product or target a new market, it is important to analyse the market environment in which they wish to compete in. In particular, firms need to assess the level of uncertainty and dynamism in the target market, as well as the levels of non controllable political, economic, social and technological factors.  Proper environmental analysis will help formulate an appropriate marketing plan.  For instance, highly regulated financial services markets that require costly skills and high investments in new technologies, may create to high a barrier for entry for small start-up firm.  More locally, firms need to be identifying the key opportunities and threats in their chosen target market.  For instance, there may be fierce rivalry in the chosen market, where the potential threat of new entrants may be high and the relative bargaining position of supplies low.  In this type of market, any failure by a firm to differentiate their offerings from a competitor's substitute offering may prove disastrous.  Competitive rivalry can also be assessed in terms of the general life cycle of any given market.  For instance, emerging technologies such as mobile computing may present high profit opportunities for innovators and high-growth start-ups, whereas traditional industrial and manufacturing markets could be viewed as 'cash cows' with lower, stable returns.

 Developing a Marketing Implementation Plan - developing a marketing plan can be hardest task of all, especially with the limited resources and budgets of small businesses.   Businesses generally have to differentiate by providing added value and/ or compete with lower prices. This means choosing how to fill a gap in the market with a product or service that stands out from the crowd, by offering customer something extra. A number of key questions need answering when developing the marketing plan:-

• How can a small firm differentiate themselves in a crowded market place and what unique selling points can they offer to their target market?

• How much are competitors already charging and what is an acceptable price point?

• Can a products price be justified in the minds of target buyers, as either cost effective or have extra value?

• Which physical sales and distribution channels are best suited to delivering the product and best suited to maximise sales?

• What should the marketing budget be on advertising and promotional activities and on people's time? 

• Which promotional methods are nest suited to the offering?

• Should a firm recruit someone to focus on business development activities? Many small firms have a very small team dedicated towards selling. They do not have much experience in direct marketing, branding or promotion. For example, without prior marketing experience, it may be difficult to know whether radio adverts will generate more prospective quote requests, as opposed to advertisements placed in local newspapers and magazines. 

 Testing with Business Marketing Research - most firms do some form of business market research before they enter into a new market.  Market research is a logical process of collecting and recording and analysing statistics and information regarding a marketplace, competitors and customers, in order to understand if there is a viable business opportunity to exploit. Business market research forms the basis of any marketing plan, which ultimately will need to be put in front of potential investors. Firms must ensure the size of their target market is big enough, customers have enough money and products and services represent a viable offering to prospective customers.   Only when the research is complete can planning commence.

 The Importance of Accurate Sales Forecasting - accurate sales forecasting is also an essential part of the overall sales and marketing process. Sales forecasting can use logical business parameters to predict a pipeline of potential sales orders and compare these against actual sales and historical forecasts. By identifying the variances over a period of time it becomes easier to understand why forecast errors have occurred and what lessons can be learnt to correct them in future. Within larger corporate enterprises, sales forecasting processes can become quite political and be used to deflect criticism, as well as make rosy promises regarding future success. However, rarely do people make accurate forecasts. For small-business people, minimising the proportion of sales forecasting errors is all-important.  Sales and cashflow forecasting dictates investment decisions, recruitment of sales staff, promotional activities, production capacities and decisions on stock levels.

 Promotion Using Online Marketing Techniques - effective marketing communications inevitably involves contact with prospective customers using a variety of methods. These may include face-to-face discussions, letters, telephone cold calling, e-mail, newsletters, printed media, and advertisements in trade publications and so on.  Small business owners need to be mindful of distance selling restrictions, (designed to prevent unscrupulous marketers from distributing unnecessary and unwanted sales literature and messaging).  Many small firms are exploiting the power of the Internet and investing time and money into improving their company website.  Small firms everywhere are using their own company website to attract new customers, keep current customers informed by online newsletters and provide forums, blogs and discussion groups to stimulate feedback from customers.  Firms trying to market products directly over the Internet are increasingly adopting pay per click advertising.  Paid advertising can provide a cost-effective and a highly targeted means of marketing. If the prospective customer chooses not to click on a paid advertisement displayed in a search engines 'sponsored listings', the advertiser pays nothing.  This is one of the most compelling reasons why pay per click is becoming the mainstream advertising channel spend of small businesses.