Marketing Techniques for SME’s
Introduction
Small and medium-sized enterprises (SMEs) form the backbone of the Europe’s economy since they represent about 99 percent of all the businesses in European countries (Rahman & Ramos, 2012). Such business forms have spread intensively to other parts of the world including the developed and the developing countries. The establishment of SMEs in different economies of the world has been closely associated with the economic growth, high levels of innovation, job creation, and improved social integration among people of different parts of the world. Considering the spread of SMEs in the world and their impact on different economies, there is great need to develop good techniques for SMEs marketing. This paper seeks to provide a comprehensive report on the best practice methods and techniques used for marketing SMEs around the world.
Identification of the Target Customers
SMEs’ need to have a clear marketing strategy to ensure that all their operations are effective. A clear marketing strategy is a basis for developing a strong company culture, improving the customer engagement, and creating awareness of the products and services offered in the market. The first decision in developing an effective marketing technique involves the identification and definition of the target customers of the business (Bettiol, Di Maria, & Finotto, 2012). All the marketing techniques developed for SMEs should focus on the target consumers of the products and services offered to ensure the marketing tactics are designed to suit the consumers being served. Focusing on a specific target market enables the SME marketers to narrow down their target market to develop marketing strategies that are specifically meant for a particular market.
Most of the SMEs do not necessarily have wide market coverage but rather they operate in small market dimensions as they develop and expand to new markets. Their resources may also be limited to a small range of consumers. Therefore, these businesses engage in developing marketing techniques that maximize on the small market available for their products and services. It makes the strategies developed to be very effective because they focus on a specific market which the entrepreneur may be acquainted with (Kuchner, 2012). Proper mastery of the target market for the SMEs will ensure that the business entity responds quickly to the changes in the taste and preferences of the customers; thus, boosting the overall customer experience. It guarantees that the SMEs have the potential of growing and expanding to new markets upon developing effective marketing practices and techniques.
Description of the Nature of Business
Development of effective marketing techniques for SMEs requires proper description of the nature of the business which the entrepreneur is involved in. The description of the company should be simple and clear while focusing on the core business to ensure that the series of activities undertaken by the business are clearly outlined. It will guarantee that the customers can clearly identify the core competencies of the company. Many customers tend to be attracted to companies that have a clear outline of what they do because they associate such plans with the ability of the company to offer quality goods and services all the time (Bettiol, Di Maria, & Finotto, 2012). The organizational structure of the SMEs should also be well designed to ensure that they provide a clear outline of how the business is run to win the customers confidence on the products and services.
Clear business description helps to magnify the marketing and sales efforts of the sales team of a company. Proper business description will help the company to compare itself with the other businesses in the same industry and establish its position within the market. It enables the owners of the business to identify the competitive advantage of their business and then maximize on it with the aim of becoming the business leader in that market (Mukherjee, 2012). With a well-outlined business description, designing of marketing strategies becomes easy because the company focuses on its core businesses to provide goods and services to the target market.
Identification of Unique Benefits
Another best practice for SME’s marketing is the proper identification of the unique benefits that are associated with the development of products and services offered to the customers. It is done by conducting a product analysis process to establish the specific features that make the products and services offered to the market outstanding and unique. Such unique features are then maximized to ensure that the customers receive quality products at all times. Marketing technique based on the product quality are effective because many consumers are more concerned with the quality of products and services offered. It is very easier to convince more customers to buy products based on its quality since they are assured of getting good value for their money (Nwankwo & Gbadamosi, 2011). The approach requires the marketers to focus on few main features of the product to portray their uniqueness clearly.
The marketing techniques developed by SMEs should pay more attention on their compatibility with digital marketing since it is the most efficient marketing platform. The SMEs should ensure that the unique characteristics of the products and services offered are well articulated in all their social media platforms to guarantee better conveyance of the message to all the consumers. Due to the rapidly changing nature of the social media platforms, SMEs using social media as their main marketing channels should ascertain that they keep updating their marketing strategies to ensure that they are in line with the developments in the social media platforms (Tajeddini & Ghauri, 2015). Many users of the social media platforms are interested in searching the new products and services offered in the market; hence, the SMEs need to continuously update their new products and services in the social media platforms or design new adverts for the same products.
Knowing the Main Competitors
The development of an effective marketing technique will require the SMEs to identify their main competitors in the market. Analysis of the level of competition in the market enables a company to devise new marketing strategies to counter the raising competition. It involves identification of the company’s competitive advantage and maximizing on it for it to remain competitive in the market (Pentina & Koh, 2012). The small entrepreneurs starting the SMEs should specifically define their competitors and establish a clear distinction between their products and services from those of the competitors for the buyers to distinguish them perfectly.
Apart from knowing the competitors, SMEs should ensure that they learn a lot from the most successful competitors in the market. It is likely the most successful competitors in the industry would have embraced better marketing strategies than the focused company; hence, there is a lot for the entrepreneur to learn from the successful competitors within the industry. The SMEs that have embraced digital marketing stand a better chance of learning from their competitors because what they need is to follow their competitors on the social media and conduct a detailed analysis of the competitor’s website to establish what makes them outstanding in the market (Khachidze, 2012). Once the company has identified the competitive advantages of its competitors, it can respond by trying to provide what its competitors do not provide.
Conducting Ethical Business
Ethical business practices guarantee that a company operates under the already established code of conduct within the industry. For the SMEs that have embraced digital marketing, they should be very sensitive to social media marketing because it can easily ruin the reputation of the business. The social media platforms should be managed by a professional marketer to ensure that whatever is posted on the social media is credible and authentic enough to reach the esteemed clients. The social media marketing requires continuous monitoring to provide responses to the clients every time they complain, seek clarification or compliment the products, and services offered by the company (Hanafizadeh & Behboudi, 2012). Quick response will boost the performance of the company since it attracts more clients as they are quite certain that their queries will be addressed with immediate effect.
Other ethical issues in business include honesty, transparency, and provision of quality goods and services at fair prices. Such virtues distinguish between successful and unsuccessful SMEs, especially when they are involved in provision of valuable, health sensitive or critical products, and services to customers. The marketing strategies developed in such circumstances should focus on assuring the public who are the target consumers about the commitment of the SMEs to deliver products and services based on these ethical virtues of business (Pentina & Koh, 2012). Adherence to ethical business standards in marketing also guarantee the clients that the information provided in the company advertisements are true and that the samples presented during sales promotion resemble the actual products provided in the market. The marketing strategies should be consistent with the business culture of different countries that the SMEs are established to ensure that they benefit from the acceptance by the local customers and gain support from the respective governments.
Becoming an Expert
Marketing of the SMEs does not necessarily involve the increase of goods and services sold but rather the publicity of the company and its external outreach within and outside the industry. The publicity of the company is part of the marketing techniques because it comes along with increased sales resulting from the high number of clients attracted to the company’s products and services. Through the adoption of digital marketing, SMEs can become experts in the marketing of their specific areas of expertise by integrating all their unique contents in their websites for access by clients they serve at their own convenient time. The digital marketing strategies embraced by the SMEs guarantee increased outreach in the market (Cheng, Lourenço & Resnick, 2016). Digital marketing is also cost effective, especially for the SMEs that have limited resources available for marketing; hence, enabling such companies to reach their target clients at a low marketing cost.
Marketing is one of the most interesting aspects of running a business because it involves sharing with the clients how the business is great. The conveyance of the information about the greatness of the business should be systematic to ensure that the clients can trace the development process of the SME such that the development is not very spontaneous. The SMEs can maximize on the marketing aspect through embracing digital marketing whereby the necessary research is conducted to establish the core competencies of the company and relevant planning done to ensure that every aspect of the findings of the research is incorporated in the development of the marketing strategies (Alon, Jaffe & Vianelli, 2013). The SMEs can utilize the affordable marketing expertise available and use the free online marketing tools to maximize on the marketing aspects of the SMEs. Upon full implementation of the digital marketing strategies in the SMEs, they are guaranteed about getting significant returns on investment since the implementation of the strategies.
Free Digital Marketing Techniques
The free digital marketing techniques adopted by many SMEs in the modern world have replaced most of the traditional marketing strategies, such as sales promotion, personal selling, and use of free samples. Many industry surveys have recorded very little contribution of traditional marketing strategies on the overall return on investment in marketing of SMEs. Due to the advancement in technology, traditional marketing has become outdated since many customers rely on online information to make decisions on what to buy or consume rather than relying on the traditional marketing techniques which are not reliable (Cambra-Fierro & Centeno, 2012). Therefore, the free digital marketing techniques have proved to be the best marketing strategies for the modern SMEs in the new marketing age embraced in all parts of the world.
The main problems faced by all the SMEs across the world include increasing sales from the existing clients, closing sales, converting leads to sales, and raising consumer awareness about their brand. Digital marketing has offered an effective and cheap solution to the marketing problems faced by SMEs around the world because it incorporates all forms of marketing that are operated in online and mobile platforms. The main free digital marketing techniques for SMEs include blogging, Twitter, LinkedIn, Facebook, YouTube, niche social media sites, email marketing, and discussion forums (Kotler, 2012). All these platforms are quite essential for the development of the marketing strategies of SMEs as they establish strong brands, enables fast conveyance of messages, and large outreach compared to the traditional marketing strategies.
Entrepreneurship Theories
The marketing techniques developed by the SMEs should be consistent with the already developed theories of entrepreneurship. SMEs are businesses that are specifically established by entrepreneurs who target to fill a market niche by providing products and services that satisfy the needs of the customers. The risk-bearing theory of entrepreneurship was developed by Frank Knight, which led to the introduction of the new dimension of risk taking as the central concept of entrepreneurship. The developer of this theory adopted various concepts of the early economists, such as Richard Cantillon and J B Say but he brought in the dimension of risk taking (Alon, Jaffe & Vianelli, 2013). This theory of entrepreneurship has described the uncertainty aspect of every factor of production which makes the future results quite uncertain. It encourages entrepreneurs who are the owners of the SMEs to take investment risks to gain more profits from the investments.
The uncertainty associated with the operations of SMEs requires the entrepreneurs to develop effective marketing techniques that ensure the company registers high volumes of sales to curb the risks involved in the operations of small and medium-sized businesses. The marketing practices adopted by the SMEs will determine whether the company will be able to overcome the risks involved in its operations. The risk-bearing theory of entrepreneurship is associated with the development of more aggressive marketing strategies, which guarantee that the returns associated with investments in risky businesses (Kuratko, 2016). The SMEs embrace rigorous marketing techniques to ensure that they expand their market coverage by acquiring more customers; thus, diversifying the risks involved in the business operations of such companies. Diversification of risks reduces the extent to which they influence the final results of the business operations.
Another common theory of entrepreneurship is the Alfred Marshall’s theory of entrepreneurship that focuses on the principles of economies held on land, labor, capital and the organization as the main factors of production (Tíryakí, 2015). The theory considers entrepreneurship as the core driving factor of production that brings together other factors of production. This entrepreneurial theory describes three characteristics of a successful entrepreneur. For entrepreneurs to establish a flourishing SME, they need to have a thorough understanding of the industry in which they operate; thus, enabling them to design marketing strategies that specifically fit the requirements of the industry. Successful entrepreneurs should also have good leadership skills to help them direct the implementation of the developed marketing strategies for the SMEs (Tíryakí, 2015). The third characteristic of successful entrepreneur according to this theory is that they should have an insight on the future demand and supply and should be willing to invest in risky activities to reap high results.
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