SMALL BUSINESS MANAGEMENT – CHAPTER 6 – SMALL BUSINESS MARKETING – Flashcards

Small business marketing consists of numerous activities, including market analysis & determining the marketing mix. Three distinct marketing philosophies are the production-oriented, sales-oriented, & consumer-oriented philosophies. A small business should adopt a consumer orientation to marketing.

A market is a group of customers or potential costumers who have purchasing power and Unsatisfied needs. Markets usually have to be segmented based on differences or "segmentation variables." Variable categories include benefit, geographic, demographic, & psychographic.

The market analysis should include a customer profile. Four areas of marketing strategy that should be discussed in the marketing plan are decisions affecting the total product or service, pricing decisions, promotional decisions, & distribution decisions.

Product strategy describes how a product is used to achieve a firm's goals. There are six major product strategy alternatives; they are based on the nature of the firm's product offering & the number of target markets.

The name is a critical component of a product. It should be easy to pronounce and remember, descriptive, eligible for legal protection, full of promotional possibilities, and suitable for use on several products. Packaging is a significant tool for increasing total product value.

A label is an important informative tool, providing instructions on product use, care, & disposal. A warranty can be valuable for achieving customer satisfaction.

The revenue of a firm is a direct reflection of two components: sales volume and price. When setting a price, a firm should examine the relationship of price and quality demanded.

Analyzing costs & revenue under different price assumptions identifies the break-even point: the quantity sold so that total costs equal total revenue. Markup pricing is a generalized cost-plus system of pricing used by intermediaries with many products.

Penetration pricing & skimming pricing are short-term strategies used when new products are first introduced into the market. Follow-the-leader, variable, & flexible pricing are special strategies that reflect the nature of the competition's pricing & concessions to customers.

Provincial and federal laws must be considered in setting prices, as well as any impact that a price may have on other product-line items. A price-quality grid can be created to illustrate the relative competitive position of your product to your competitors.