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Why SMEs need to Market

We can all answer confidently if someone asks us what a plumber, bricklayer or electrician does. If asked what a marketer does, there’s likely to be a wide choice of answers. So what is marketing and why is it so important to companies of all sizes.

What is Marketing

According to Oxford Dictionaries it is

The action or business of promoting and selling products or services, including market research and advertising.

If you dig further, you will undoubtedly come across the four P’s of Marketing;

  • Product – Relating to selection, design, development and specification of a product or services to be provided
  • Price – Positioning at the correct price in the market to be competitive and profitable
  • Place – Choosing the right channel or channels to reach the market. E.g. online shop, dealers and/or sales teams
  • Promotion – Including advertising, how you tell the market about it

Central to having a successful marketing strategy is to have a customer centric approach. In other words, designing products or services that meet the needs and wants of a customer. It goes further though than delivering products customers want. Companies that excel in marketing are also good at creating demand and promotion. Apple and BMW, make good products but have also nurtured their reputation so their is demand and loyalty in the market for them.

Technical excellence alone doesn’t guarantee success. Some of you may remember that Sony’s Betamax system lost out to the technically inferior VHS system, because they didn’t licence the technology to competitors, a failing in “Place.” The Boeing 747 outsold the technically superior Concorde because it was the wrong Product at the wrong Price.

Friends Reunited, arguably one of the first social media platforms lost out due to lack of Promotion and technical limitations, Product.

The Marketing Centric Approach

Companies can be roughly categorised as Marketing, Technically or Manufacturing led. Let’s start with the last first.

  • Manufacturing led companies are restricted by their capability. It’s likely they have huge investments in a plant. For example if it is designed to make cement, it’s not going to be possible to use it to make paint if the demand for cement falls off. In these cases marketing is involved in forecasting future demand, seeking new applications for the product they can make and actions to protect or grow market share. Tradesmen face a similar dilemma, if your skill is plastering, it’s not so easy to change to bricklaying.
  • Technically led companies are often found in specialist areas like Defence and Health. Customers come to them for their expertise. Through globalisation, companies in this sector are facing more competition so consequently are adopting a marketing based strategy.
  • Marketing led companies are as discussed earlier, concentrating on customer needs as there starting point. As the market changes, they adapt to suit it, closing or selling off some parts of the business whilst investing in others. Whitbread gradually morphed from being a major brewer and pub owner through being a restaurant chain to Costa Coffee and Premier Inn Hotels, it’s main businesses today.

Marketing Centric companies place marketing with it’s broadest definition at the heart of their businesses. Marketing determines or strongly influences what products will be offered. This in turn determines what facilities and plant will be required and what skills needs to be acquired. How the product will reach the market and how it will be promoted is all part of the planning. In such companies, they can also be the reason why new products that look good technically are axed, for non competitive or or other reasons. Sometimes of course they get it wrong!

Marketing is not just for large companies

In many small companies, marketing equates to advertising, which is just part of one of the 4 P’s, Promotion. Other aspects of Promotion and other 3 P’s are too often neglected. Why does this matter, well advertising is expensive. Even the best marketers will admit much of what they spend is ineffective, without a strategy to back it, the waste will be higher still.

So let’s look at some reasons why marketing is so important, and it comes back to the 4 P’s.

Product

Is the product or service you are offering what your market needs. However good or cheap you are, if there is no market or it is dying, your business will suffer. It could be that, although locally demand is falling, by adopting a different strategy you could reach a wider market and prosper.

Price

I was once involved in a project, prices for the same service were obtained from various parts of the country. Surprisingly, prices in London were half that of some northern cities. Many factors influence pricing, when comparing it’s important to compare like for like, just look at budget airlines. The cost of providing a product is crucial in being competitive. Unconstrained, designers will build you a Rolls Royce if you let them but if the market will only pay at the level of a Golf, you have a problem.

Place

The internet has allowed businesses to reach outside their local areas, even internationally. You don’t have to be Amazon, a small business in a niche market can build world wide sales. Deciding whether to sell through established channels (dealers or distributors) or with you own sales force, are fundamental questions.

Promotion

Promotion in whatever form is an ongoing expense. It takes time to deliver so taking action only when sales drop off is unlikely to succeed. We are now spoilt for choice with an ever increasing choice of digital marketing tools as well as the traditional ones. All too often campaigns fail because of lack of strategy and poor implementation. Failure can be expensive.

Before spending anything, you must decide what you want to achieve, who your potential market is and what you will be offering. There should be a method in place for measuring results. There are no “fits all” tools, some are good for one thing, some for others. For example, if you offer emergency plumbing services, being prominent on Google and Bing should be a priority. If on the other hand, you want to promote boiler servicing in the quiet Summer period before it gets busy, then a pro-active email with a discount offer will work better.

Always be nervous, if the agency offers you a solution before they discuss your requirements.

Improving your Marketing

The challenge for many SME’s is that they cannot afford a full time marketer. And, even if they can, finding one that can cover adequately every aspect of the discipline will be a challenge. In many businesses responsibility for marketing is shared with another often primary function. As a result, it doesn’t get the attention it needs, or and potentially worse, what marketing that is done is uneconomic. Take for example, advertising on Google and Facebook. These companies are incredibly profitable, why, because much of the advertising placed with them is poorly planned. An expert in this area will pay for themselves through savings in PPC (pay per click) fees. The same is true for other forms of promotion, by working with experts, your promotional spend will be more effective. Email Marketing is a case in point, to work, it needs to have access to the right audience and needs to quickly grab attention. The correct strategy is needed, Newsletters build awareness and loyalty overtime whereas E-shots are short term adverts, ideal for offers. Email marketing specialists like Web-Clubs can guide you through every aspect and have access to databases of both consumers and businesses.

Local networking groups, industry groups and recommendations are the best way to meet local companies that can help you implement a successful marketing strategy.