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The objective of all business enterprises is to satisfy the needs and wants of the society.

Marketing is, therefore, a basic function of all business firms. Marketing may be narrowly defined as a process by which goods and services are exchanged and values determined in terms of money prices.

Importance of Marketing in Small Business


It enables the entrepreneurs to improve the quality of their goods and services. Marketing helps in improving the standard of living of the people by offering a wide variety of goods and services with freedom of choice, and by treating the customer as the most important person. Marketing generates employment both in production and in distribution areas. Marketing makes or breaks a small enterprise. An enterprise grows,

stagnates, or perishes with the success or failure, as the case may be, of
marketing. Nirma is an appropriate example of the success of small scale enterprise.

The Principal Marketing Functions


Specific Function Marketing Information and Research Activities Involved Economic, business, trade, industry, consumer, user, product, sales and advertising research and analysis. Information handling and data processing, Marketing operation research and Competitive intelligence. Determining and developing the companys product mix. Matching the products specifications, packaging, pricing, performance and servicing to customer needs through product and services improvements and new product development. Field Selling, Selection of distribution Channels, Warehousing, Transport, Sales Analysis, Sales reporting, Sales forecasting, Sales budget and quotas, merchandising and Sales communications. Advertising to the customer or user in all media (press, television, cinema, radio, outdoor posters, etc.)

Product Planning

Sales and distribution

Advertising and Promotions

Steps involved in conducting the market research are:


1.Formulating Objective 2.Research Design (a)Exploratory Research Design (b)Descriptive Research Design (c)A Casual Research 3.Data Collection and Tabulation

STP Approach
Segmentation: Any business venture has limited resources and hence it cannot satisfy the needs and wants of all the customers. It is for this reason that segments are drawn. Segmentation is the process of dividing the market or customers into similar characteristics or behaviour. There are number if variables in which markets can be segmented:

Demographic Segmentation Psychographic Segmentation Geographic Segmentation Behavioural Segmentation

Market Targeting is the process of evaluating various segments and identifying the
number and type of segments that the business venture would target. The process of market
targeting includes the following steps:

1. Market Evaluation: It is a process of evaluating or assessing all the segments. This


assessment is done on the following criteria:

Assessment of the size of each segment Assessment of segment growth Companies strengths and weakness to suffice the needs of the segment

Potential opportunities and threats from the competitors, substitutes, buyers,

suppliers, government

2. Target Market Selection: After the target market evaluation is complete the company has to decide which segments and how many segments it would target. It would depend on several factors like economies of scale, profitability, growth, size, lesser risk of loss, entrepreneurial competency. There are five patterns available for selecting the target market:

Single Segment Concentration Selective Specialization Product Specialization Market Specialization

Market Positioning: After segmentation of the population, selecting the attractive target markets is the next in positioning the product or service. Market positioning can be defined as the act of projecting the companys product or service in such a way that it appears attractive to them. It is an image making exercise which helps the company to portray to the targeted segment in such a way that it appears attractive to the customers. The following variables should b assured for positioning the product or service: 1) What image the company wants to project 2) The pricing strategy 3) The packaging of the product 4) How competitors project themselves 5) The type of product 6) Product Lifecycle

Elements of Marketing Mix

Implementing, Monitoring and Review


The strategies formed are finally implemented and regular monitoring and

evaluation is required, so that the strategies yielding positive results are further
strengthened and strategies not giving good results are diluted. It is also important to periodically review the marketing strategies considering the dynamic nature of

external environment and hence the vulnerability of the internal environment.

Some of the factors which contribute to the marketing problems of the small scale industry in recent days are:
Increasing competition from within the small scale sector as well as from large
industries with established brand names and marketing setup Consumer awareness, even in rural and semi urban areas, for quality goods

The need to set up distribution networks for reaching out widely dispersed markets
Inability of the SSI units to exploit the export markets

Marketing Problems Faced S. No.


1 2 3 4 5
6 7 8 9

Marketing Problems
Low Quality Price Fixation Improper Positioning Improper Segmentation High Cost of Marketing Personnel Sales Promotion Distribution Channels Non Availability of Packing Material Competitors

Percentage
71.05% 60.03% 42.11% 50% 55.26%
60.53% 73.68% 65.79% 89.47%

(SOURCE: Asian Journal of Marketing & Management Research Vol.1 Issue 1, September 2012)