Small Business Marketing – An Economic Perspective
Let’s start discussing your small business marketing plan by taking a look at the definition of marketing itself. Marketing covers more than just advertising, which is a concept many small business owners may not understand. The most important function of marketing, arguably, is to create a unique selling proposition to the buyer, thereby making them less able to consider other options. Marketing is just as much about what you sell, as how you go about selling it.
The concept of a unique selling proposition sends us back to economic theory where we look at demand curve elasticity, particularly price elasticity and cross elasticity of demand. Many businesses will face the question of how to price their services. With an effective marketing campaign the demand curve for an item is shifted outwards and made steeper. What this means for you is that there is more general demand, and the demand doesn’t fall as much when you put your prices higher.
Going back to the question of the unique selling proposition let’s look at the individual effect on a single consumer. A big pain point for this one customer is the thought that if the goods or services are defective or inferior, he will need to purchase them again, costing him time and money. As this customer investigates your business, through looking at your media (advertisements, website, brochures etc.) they will develop a perception of your company. Any words spoken between them and the sales staff are also critical as to how your business is marketed towards this customer. The customer is specifically looking for quality of workmanship in this instance. The unique selling proposition for this customer will need to be geared around this. If the customer is able to develop the perception that your goods are the best quality, then the final price he will be prepared to pay is considerably higher than what he would pay to any competitor.
Trying to convince a customer that your product is the best in every way is likely not the best way to approach marketing. Customers are generally too savvy for this, also the different needs of customers makes it impossible for you to satisfy every customer. A customer who is completely price-focused may not be your ideal customer and you can refer them to a competitor who is offering an extremely low price. It’s good to consider a standard engineering question when it comes to offering a solution – cheap, fast or reliable; pick any two.
With this compromise in mind, have a think about what your business is going to be sacrificing in its products or services so that you can focus on creating your Unique Selling Proposition based upon the other two. By gearing your marketing towards the right market space for your business, you guarantee the best success chances for your small business by serving a niche market extremely well rather than attempting to serve the market space.
If you’re in the service industry then pay a visit to HirePulse - an Australian services directory where you can get Free Business Listings to help you market your business online. Browse through to Start Your Consulting Career With A Bang for some more business advice.