Management of Small Business

8/3/2019 Management of Small Business

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Management of Small Business


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Key Functions in Managing Small Business

Marketing Management

Financial Management

Strategic Management

Production Management

Human Resource Management


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Marketing is defined as a process which identifies,anticipates and satisfies customer needs efficientlyand profitably in keeping with the objectives ofenterprise.

Marketing Process:

Identification of opportunity

Market survey

Choosing the target market Designing the market strategies

Implementation of marketing strategies & practices


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Common marketing problems faced by small Business:

Lack of Brand image

Lack of sales force

Product Quality

Credit sales

Low prices

Local and limited market


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Customer relationship management (CRM)

CRM focuses on meeting the individual needs of

customer. The skill requires building a customerdatabase and doing data mining to detect thetrends, segments and needs. CRM finds answer to3 basic questions:

1. Who buys?2. When do they buy?

3. Why do they buy?


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Market Research

Step One : Defining the Purpose or Objectives Ask people what they think of the product or service and

collect some background demographics & attitudes of

these individuals. How much potential customers would be willing to pay

for the product or service.

Where potential customers would prefer to purchase the

product or service.

Where the customer would expect to hear about or learn

about such a product or service.


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Market Research

Step Two: Gathering Data from SecondarySources

Data that already exists i.e information from

Trade magazines Libraries

Government Agencies

Universities

Internet

The entrepreneur should exhaust all possible secondary data

sources, observation, and networking before beginning any more

costly primary data research.


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Market Research

Step Three: Gathering Information from Primary

Sources

Information that is new is Primary data and involves

data collection procedures like Observation

Networking

Interviewing

Focus Groups Experimentation

Data collection is done with the help of Data Instruments like Questionnaire.


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FOCUS Groups:They are more informal method of gatheringin-depth information. A focus group is a sample of 10-12 potentialcustomers who are invited to participate in a discussion relating

to the Entrepreneurs research objectives.

Step Four: Analyzing & Interpreting the results

The results should be evaluated and interpreted inresponse to the research objectives. The data can thenbe cross tabulated to give better insights andinterpretations regarding the segmentation of the

market.


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Marketing Research Analyze

Complexity of Buying Behaviour

CULTURALBELIEFS &

VALUES, LIFE

STYLES

SOCIOLOGICAL

SOCIAL CLASS,

STRUCTURE

FAMILY/GROUP

INFLUENCE,LIFE

CYCLE, OPINION

LEADERSHIP

ECONOMICPRICE, DELIVERY,

PAYMENT TERMS,

SALES SERVICE

INDIVIDUAL PSYCHOLOGICAL

FACTORSCOGNITION, LEARNING PROCESSES,

INTERPERSONAL RESPONSE, ATTITUDESMOTIVATION, PERSONALITY THEORIES

BUYING PROPOSITION PRODUCT OR SERVICE


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External Determinants of Consumer Behavior:

CULTURE AND ITS INFLUENCE ON CONSUMER

BEHAVIOUR CULTURE

SOCIAL

Class SUB-

CULTURE


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Positive attitudestoward brands

help with brandextensions


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EDUCATION

SOCIAL CLASSA RANGE OF SOCIAL POSITIONS ON WHICH EACH

MEMBER CAN BE PLACED

PHYSICIAN

FARMERSTRUCK-DRIVER

LAWER


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Understanding Consumer Characteristics

CHARACTERISTICS Innovators

2-3%

Early

Adopters

12-15%

Early

Majority

33%

Late

Majority

34%

Laggards

12-15%

PERSONAL

Social,

Income, Occupation,

Education,

Housing,

Family Influence,

Time orientation

PSYCHOLOGICALNature of needs,Perceptions,

Self-concept,Aspiration Groups,

Reference Groups


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Reference Groups


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Changing Priorities

Stage Priorities Major Purchases

Fledging : Teens & early 20s Self, Socializing, Education Appearance Products,Clothing, Automobiles,Recreation, Hobbies, Travel

Courting :20s Self & Other, Pair bonding,

Career

Furniture & Furnishing,

Entertainment, Savings

Nest Building:20s &early 30s Babies & Career Home, Garden, Baby Careproducts, insurance

Full Nest 30-50s Children, Career, Midlife crisis Children Food, clothing,education, transportation, life

counseling

Empty Nest 50-70 Self & others, relaxation Furniture, Entertainment,Travel, Hobbies, LuxuryAutomobiles, Investments

Sole survivor 70-90 Self, health, loneliness Health care , Diet, Security,

Comfort, TV, Books, Longdistance telephone services


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Analyse Target Market

OCCUPANTS WHO

SERVICES WHAT

OCCASION WHEN

ORGANISATION WHO IS INVOLVED

OBJECTIVES WHY

OPERATIO HOW

M k ti St t t b B d


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Buying Decision

USER

INITIATOR

INFLUENCER

DECIDER

BUYER

Marketing Strategy to be Based

on

WHO MAKES THE BUYING DECISIONS

DECIDER

INFLUNCER INFLUENCER

BUYER

USER


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Characteristics of a Marketing Plan

Should be flexible i.e. should provide scope forinclusion ofwhat if scenarios

Should provide a strategy for accomplishing

company goals and missions

Should be based on facts and valid assumptions

Should provide for continuity so that future

plans can be built on it for long-term goals

Should be simple and short

Should specify performance criteria that will be

monitored and controlled


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Marketing Plan- The Algorithm

Defining the Business SituationDescribe

the past and present business achievements of

the new venture.

Defining the Target market Market Segmentation- Dividing a market into

definable and measurable groups for the purpose of

targeting

market strategy.


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Market Segmentation- The process of segmenting &

targeting the market should process in the following

way

Decide what general market or industry you

wish to pursue

Divide the market into smaller groups based

on

Characteristics of the customer

Geographic

Demographic

Psychographic


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Buying situation

Desired benefits (e.g. Product features)

Usage (e.g. frequency of usage)

Buying conditions (e.g. time available & product purpose)

Awareness of buying intention (e.g. familiarity of product

& willingness to buy)

Select segment or segments to Target Develop a marketing plan integrating product,

price, distribution & promotion (togethercalled THE MARKETING MIX)


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Marketing Mix

Marketing mix, simply stated, is the process of

designing and integrating various elements of

marketing in such a way as to ensure the

achievement of enterprise objectives.

The elements of marketing mix have beenclassified under four heads - product, price,

place and promotion. That is why marketing mix

is said to be a combination of 4 Ps.


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Decisions relating to the product include product designing, packagingand labelling and varieties of the product.

Decision on Price is very important because sales depend to a largeextent on product pricing. Whether uniform price will be charged ordifferent prices will be charged for the same product in differentmarkets are examples of decision pertaining to the price of theproduct.

The third important element is place, which refers to decisionregarding the market where products will be offered for sale.

Promotion involves decisions bearing on the ways and means ofincreasing sales. Different tools or methods may be adopted for thispurpose.


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Marketing Plan

Considering the Strengths and Weaknesses The SWOT analysis which was discussed earlier.

Establishing Goals & Objectives Asking

oneself Where do we want to go? in terms of

Market share, profits, sales, market penetration,

new products launching etc. All such goals n

objectives should be quantifiable and could be

measured for control purposes.


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Marketing Plan

Defining Marketing Strategy Outline all the

activities needed to meet the ventures business plan

goals & objectives.

The 5-Ps

In the marketing plan, you should endeavor to follow

best practice to maximize your competitive advantagein each of the following key areas:

Product packaging, the brand name, warranty,

image, service, delivery time, features, style etc.


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Price Pricing of a product or service has to be done very carefullyconsidering numerous things like quality, prospective demand, margins,competitors prices, discounts, market segmentation etc..

Promotion The promotion plan itself a mini-marketing plan. Advertising isan effective as well as an expensive way & has to be taken care of. Theprocedure to be followed includes :

Set specific campaign objectives (building sales, market share) Decide your strategy (budget, media choice, geographical profile)

Target the Audience (market segment, demographic profile)

Decide the advertising content (specific product/service benefits tohighlight)

Decide the execution and style


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Place (Distribution Plan)- The distribution plan mustmatch the other elements of the Marketing MIX tomaintain the differentiation and focus of theCompany.

If your product is of highest quality, with price &promotion to match, it must be available in the majorquality stores.

The choice of distribution channel, therefore canmake an important contribution to both yourcompany differentiation & to reaching your targetgroup of customers.


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People The final ingredient in the marketing plan

jigsaw must be quality salespeople who can

consistently maintain your marketing differentiation.

A well remunerated & motivated staff will act as

enthusiastic sales promoters and act as eyes and ears

of the company in the competitive market place.


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Marketing Plan

Coordination of the planning process

Designating responsibility for implementation

Budgeting the Marketing Strategy

Implementation of the Market Plan

Monitoring Progress of Market Actions


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Difference between goods and servicemarketing

Goods marketing Service Marketing

Tangible Intangible

Standardized Heterogeneous

Production separatefrom consumption

Simultaneous productionand consumption

Non perishable Perishable


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Differentiation Strategies

1. Differentiating the product

1. Differentiating on the basis of services offered

2. Differentiating by personnel

3. Differentiating by image

4. Differentiating by Markets


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Market entry strategy

Exporting

Two types of Exports

Indirect Export

Direct Export

Documents required for Export in


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Documents required for Export in

India(Example Apparel)

Shipping Bill/Bill of Export

Customs Declaration Form

Dispatch Note

Commercial Invoice

Consular Invoice

Customs Invoice Certafied Invoice

Packing List

Certificate of Inception

Manufacturers Certificate

Certificate of Chemicals Analysis Certificate of Shipment

Health/Sanatary Certification

Certificate of Conditioning


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DOCUMENTS REQUIRED FOR IMPORT IN U.S

Commercial invoice

Bill of lading

Packaging list

Original CITES permit

Certificate of Origin


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Thank you

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