Small Business Marketing Assignment: Chapters 6 and 7 Analysis

This assignment solution provides a detailed analysis of small business marketing, addressing key concepts from Chapters 6 and 7. It begins by defining the scope of small business marketing and its evolution, highlighting the importance of identifying target markets and adapting to digital marketing t...Read More

Small business marketing 0
Small business marketing
Student’s Name
4/17/2019

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Chapter 6: Small Business Marketing, Product and Pricing Strategies
1. Small business marketing includes the activities of identifying the target market,
analyzing the opportunities and the potential target market while communicating
and delivering satisfaction to the customers. The scope of small business
marketing is limited because of the limited budget, human resource, limited
adoption of technology and the luxury of creativity is limited. The scope of small
business marketing is broadened in recent years due to the more involvement in
digital marketing and increasing the opportunity to target a niche market. The
increasing awareness through digital platforms has helped small businesses to
expand their sales and target potential customers (Burns & Dewhurst, 2016).
2. Market segmentation refers to a process of forming a group of consumers who
have similar needs and wants. The variables of market segmentation include:
Demographic segmentation
In this segmentation is done on the basis of shared demographic or personality
quality which includes age, income, occupation, marital status, gender.
Geographic segmentation
In this segmentation targeting of customers is done on the basis of climate,
population density, and size (Venter, Wright & Dibb, 2015).
Psychographic segmentation
In this segmentation, the emphasis is laid upon attitude, behavior, and interest of
individuals. It is characterized by shared values, opinions and values of customers.
Benefit segmentation
Segmentation of the consumers is based on what particular benefit
of the product appeals to them.

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The segmentation is largely based upon the size of the business. In a small
business, the different variables of segmentation remain limited to small areas
while the larger business covers large geographic segmentation areas and other
segmentation are also wider as compared to small business (Venter, Wright, &
Dibb, 2015).
3. Penetrate pricing technique is the one in which new product is offered initially at a
low price to attract more customers while in skimming pricing strategy the firms
set higher prices at the initial stages to reap maximum profits.
The penetration pricing strategy is used to increase market share and increase
sales in a shorter period. It is done when the new product is already provided by a
large established brand. On the other hand, skimming pricing method is adapted to
skim the cream from the market. It charges higher prices at the initial stages
because the demand at the earlier stages in inelastic and earns huge margins to
cover the cost of the new product (Du & Chen, 2017).
4. Contribution = Selling price-Variable cost
= $5-$1
= $4
Break event point= Fixed cost/Contribution
= 10000/4
= 2500 units
5. Yes, the company can keep its price $10 because in this situation there would be
no loss and no profit. On the other hand, if the intention of the company is to earn
higher profits in the short run then the company will have to increase its selling
price.

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Chapter 7: Distribution and Promotion Strategies
1. The physical distribution is considered as a forward movement of products and
services from the manufacturing company to the end users. It involves a defined
network of transportation, storage and warehouse and ultimately the delivery of
goods to the final destination. It is concerned with the flow of goods to the
ultimate customers. Physical distribution is done directly by the company or
through stockists, a network of distributors or through the service of franchises. It
ensures that there are timely fulfilments of the demand in the market. On the other
hand, a distribution channel is a chain of individuals and organization involved in
delivering the product or service from producer to consumer. These channels are
also known as a marketing distribution channel (Gadde, 2015).
2. Small businesses must focus on adopting indirect distribution channels because it
allows the business to grow by establishing a relationship with the international
distributor and help in growing the business to the international markets. The
business can use the experience of an international retailer and can get information
about the product and market development. Indirect distribution channels reduce
the line of contact to the one and provide efficiency to the business. Indirect
distribution channels allow the small business to focus on core competencies
without hiring new personnel. Indirect distribution channels help the small
business in developing a network with a large number of retailers and cover wide
geographic areas to provide the goods to the end user (Shareef, Dwivedi, &
Kumar, 2016).
The involvement of market intermediaries is crucial to cover the large target
market and helps the small business to have better marketing of the products. It
helps the small business to grow by targeting diversified customers. It helps in a

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timely meeting of the demand of the customers. It breaks the bulk into smaller
quantities and sorts the homogeneous lines into heterogeneous lines and shifts the
risk to the distributor. It also provides essential information regarding price and
market size (Shareef, Dwivedi, & Kumar, 2016).
3. Setting budget funding for promotion will help in avoiding the war because the
small businesses know the budget and will not accelerate the marketing strategies
in comparison to competitors. It allows the business to have smarter spending and
proportional advertising promotion. The disadvantages of budget funding
promotion create financial rigidity and the business becomes more finance-
oriented rather than focusing on the quality (Andrews & Shimp, 2017).
4. The non- financial rewards help in motivating the staff and in turn increase the
productivity of the company. The list of non-financial awards includes:
Recognition
Recognition among the peer members helps in motivating the staff and focuses
more or achieving the goals. It inculcates the desire to perform more and get
recognition (Schlechter, Thompson & Bussin, 2015).
Prizes and Vouchers
The company must focus on providing non-financial performance based upon the
evaluation of the employee performance and must award them. The vouchers
include a free trip with the family to keep the employees motivated.
Flexible working hours
The company must provide the flexibility of working hours to not pressurize the
employees and timely achievement of the goals of the company (Schlechter,
Thompson & Bussin, 2015).

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5. Online advertising has become the trendiest approach for targeting large
consumers at a shorter span of time. The four basic approaches to advertising on
the internet include:
Search Engine Optimization
Search Engine Optimization is the practice of growing the quantity and quality of
traffic to the website through organic search engine results. It helps in creating
awareness without pay.
Social media
The use of social media for promoting sales has increased from $16 billion to $ 31
billion. It covers the paid promotion and sponsored videos and organic platforms.
It covers heavy promotion without much pay. Facebook and Twitter have become
the most popular one.
Pay per click
In this advertisers are only pay when the customer clicks over the add and it
contains more text and fewer pictures. It is analysed that 64.6% of people click on
the ads.
Email marketing
In this marketing, the advertisers launch discount offers and content on email to
complement their other marketing channels (Bruce, Murthi & Rao, 2017).
6. Speciality advertising is different from the trade show exhibits because in
speciality advertising the company provides gifts to the customers and promotes
message and logo of the brand. It is differentiated from trade show exhibits

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because it is an inexpensive promotion tool and targets the set customers while
trade show exhibitions are designed to promote the latest updates in the brand.
The customers in trade shows are comparatively large and diversified. Speciality
advertising focuses on providing value to the customers and develops long term
relationships while trade show highlights the features of the brand to target new
customers (Altstiel, Grow & Jennings, 2018).

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References
Burns, P., & Dewhurst, J. (2016). Small business and entrepreneurship. United Kingdom:
Macmillan International Higher Education.
Venter, P., Wright, A., & Dibb, S. (2015). Performing market segmentation: a performative
perspective. Journal of Marketing Management, 31(1-2), 62-83
Du, P., & Chen, Q. (2017). Skimming or penetration: optimal pricing of new fashion products
in the presence of strategic consumers. Annals of Operations Research, 257(1-2), 275-
295
Gadde, L. E. (2015). Changing Distribution Structures-On the role of intermediaries.
In Proceedings of the 1995 World Marketing Congress, pp. 284-293
Shareef, M. A., Dwivedi, Y. K., & Kumar, V. (2016). Mobile marketing channel. In Mobile
Marketing Channel, pp. 25-45
Andrews, J. C., & Shimp, T. A. (2017). Advertising, promotion, and other aspects of
integrated marketing communications. Nelson Education
Schlechter, A., Thompson, N. C., & Bussin, M. (2015). Attractiveness of non-financial
rewards for prospective knowledge workers: An experimental
investigation. Employee Relations, 37(3), 274-295
Bruce, N. I., Murthi, B. P. S., & Rao, R. C. (2017). A dynamic model for digital advertising:
The effects of creative format, message content, and targeting on
engagement. Journal of marketing research, 54(2), 202-218
Altstiel, T., Grow, J., & Jennings, M. (2018). Advertising creative: strategy, copy, and
design. London: Sage Publications