Six marketing principles for SMEs to live by

Published in the Philippine Daily Inquirer, October 11, 2002

GONE ARE THE DAYS when marketing was relegated as back-end support to selling activities. Marketing today is no longer treated as a cost center nor something to be dispensed with but is a demand creator.

Today, many businesses recognize marketing for its real role in creating marketing demand. Whether one’s business is small, medium or large, the same important principles of marketing apply.

Principle One. Identify your target market. Because small to medium sized businesses do not have the budgets of multinational companies, it is important for them to narrow down the scope of their markets to that of which they can serve best. Immediately targeting national distribution with very little budgets may jeopardize the success of the product. Concentrating the company’s resources however small, on areas that it can best
serve maximizes its use rather than spreading it thinly.

Principle Two. Define your differentiating positioning and stay with it. Create a differentiation in the minds of consumers but be certain to substantiate it. Because of a slowdown in the economy, consumers are careful with their money and are certain to look for alternatives. This can be an opportunity as an SME introduces a differentiating product or service. While consumers are willing to try new brands, they must be
encouraged to stay on with the brand through a consistent, delightful experience.

Principle Three. Interest in marketing research and use the findings wisely. The close involvement of owners of SMEs with their businesses makes them sometimes forget the consumers point of view. For example, it is not uncommon for owners to assume that consumers think the same way as they do about their product or service. Only to be surprised after validating through consumer market research that it is often not the case. Entrepreneurs must realize that consumer market research becomes an important tool for understanding one’s target market, finding out whether their market indeed knows about the product, what exactly do they know about it, is the consumer’s knowledge of the product or service positive or negative, etc.

When used wisely, marketing research is an efficient tool for discovering new benefits about your product or service that can be the basis even for positioning an extension.

Principle Four. Invest in marketing communications. SME owners often make investments in the facilities or backroom operations and absolutely neglect to set aside an adequate budget for marketing communications. This can only be explained by the fact that investments in plant facilities are tangible and are considered as assets reflected in balance sheets while the benefits reaped from marketing communications are intangible.

Moreover, still prevalent is the old business way of thinking that a company with a good product can find its way into the consciousness of the general public and therefore can always drive the sales sans advertising. Unfortunately, because of product proliferation nowadays and without efficient marketing communications, consumers are not likely to be familiar with a product or service without marketing support. Further, the use of effective marketing communications is like having several sales people spreading the word about the goodness of the product. Without the proper use of communications, there is very limited awareness among the target market thereby restricting potential huge demand for a product or service.

Principle Five. Integrate your marketing activities. It is not enough to simply advertise nor to publicize or do special events and other marketing activities. There must be a framework and reason for all the marketing efforts, one of which is grounded on the product or service positioning. Despite minimal budgets, market presence can be achieved effectively if all the marketing activities are integrated along the same line of positioning and differentiation.

Principle Six. Get the right, experienced marketing people to do the job for you. One of the greatest limitations faced by SMEs is the substantial cost of immediately setting up a marketing department and the hiring of skilled personnel knowledgeable in marketing from market analysis to product development to media implementation. Today, this is no longer such a huge barrier as SMEs on an interim basis, until they are ready to support a marketing department, can contract the services of a fee-based strategic marketing consultant. One caveat, though is to ascertain the skills of the strategic marketing consultant is not limited only to paper recommendation but must extend to implementation as well. It is important therefore, to carefully scrutinize the consultant’s expertise and curriculum vitae.