Exploring business 3.0 karen collins pdf

1

This text was adapted by The Saylor Foundation under a Creative

Commons Attribution-NonCommercial-ShareAlike 3.0 License without

attribution as requested by the work’s original creator or licensee.

http://creativecommons.org/licenses/by-nc-sa/3.0/
http://creativecommons.org/licenses/by-nc-sa/3.0/
2

Chapter 7

Marketing Strategy

Elegant Touch

Source: Used with permission from Anita Bruscino.

Anita Bruscino, the sole proprietor of Elegant Touch, began her career as a mechanical engineer.

She worked in her family’s manufacturing business until she and her father left because of too

many factions in the company. This provided her with the opportunity to start her own business,

something she had always known in her heart that she wanted to do.

Anita was inspired to open a gift shop by a family friend who had owned her own gift shop. She

gave Anita advice on starting her own business, and Elegant Touch opened in 1994. Anita has

since expanded the business and is celebrating the shop’s eighteenth anniversary, with the last

six years in its larger location. The shop is warm, lovely, and comfortable, featuring unique gifts

for all occasions and specializing in American handcrafted gift items and gift baskets. Shoppers

will also find maternity gifts, items for the sweet tooth, specialty foods, special seasonal

sections [1]—and a friendly smile from Anita. One thing that you will not find at Elegant Touch is

what you find in other gift shops in her market area. When selecting products for her shop,

Anita asks vendors whether other stores in the area carry the gift line she is considering. She will

not carry duplicates. She likes to see new things and follows the trade magazines to help her do

that. When asked how she chooses the products to carry, she described the process as

instinctive—“from the gut.”

3

Anita describes her customer demographics as mostly women, between thirty and seventy years

old, married, and established with a home. Because many of her customers are repeat

customers, the reason for fresh products is clear. A stale product line is not something that she

can afford. Her pricing strategy is consistent with common practice in the industry, but many of

her customers have commented that she delivers very high value for the prices she charges. She

is not interested in selling online because she does not want to expand any further. She is at a

nice comfort level and does not want to deal with the additional inventory implications or the

need to hire additional employees. As a result, the Elegant Touch website is for basic

information only. In promoting Elegant Touch, Anita says that word of mouth works the best.

She advertises in the local paper occasionally, supports local events, and is preparing for her

first e-mail blast. She is exploring a Facebook presence but is not yet convinced that it will be of

much value to her business.

Like all small businesses, Elegant Touch has been impacted by the ups and downs in the

economy, with some times being tougher than others. Because Anita has only two part-time

employees, however, she has not been faced with the employee layoffs that have hit other small

companies. When asked what keeps her going in the rough times, she answered, “You have to

love it.” Just walk into her gift shop, and you will see clearly that she does. [2]

[1] Leslie Hutchison, “Elegant Touch Fine Gifts,” CheshirePatch,

accessed March 24, 2012, cheshire.patch.com/listings/elegant-touch-

fine-gifts.

[2] Except for the content from CheshirePatch.com, all information

herein is based on an interview with Anita Bruscino, owner of Elegant

Touch, March 2, 2012.

7.1 The Importance of a Marketing Strategy

LEARNING OBJECTIVES

4

1. Understand how marketing for small businesses differs from

marketing for big businesses.

2. Understand the most significant risk factor facing small

businesses.

3. Explain marketing strategy and why it is so important for small

businesses.

Small-business marketing and big business marketing are not the same. The basic marketing

principles that guide both are the same, but there are important differences with respect to

scope, budget, risk factors, and areas of opportunity. [1] (See Chapter 6 "Marketing Basics" for a

discussion of marketing principles.) Small businesses cannot compete with the marketing

budgets of big companies. As a result, small businesses do not have the luxury of large staffs and

the staying power that comes with high profits. There is little room for error. Failed strategies

can lead to ruin.

The scope of small business marketing does not extend across the same level of multiple

products and services that characterize most big businesses. Combined with having few if any

products in the pipeline, this significantly reduces the insulation that small businesses have

against ups and downs in the marketplace or strategic failures. “Small business marketing

strategies have to be more targeted, cost-effective and more elaborately planned [s]o as to

minimize the losses in case the strategy fails.” [2]

Competition is the most significant risk factor facing small businesses. Trying to eliminate an

established brand takes a lot of work, but it is an overnight job to wipe out a small business.

Competition is a huge threat for small businesses. [3] This means that small businesses should be

very knowledgeable about their competition to deal effectively with them.

Opportunity areas for small businesses are also very different from those of big businesses. The

small business can take advantage of niche markets and local needs and wants. They are much

better able to emphasize personal, one-to-one interactions and can market real time in ways that

cannot be matched by big businesses. Smaller can actually end up being more powerful. [4]

Given the special marketing vulnerabilities of small businesses, the importance of

understanding the components of a marketing strategyshould be clear. A marketing strategy

5

involves selecting one or more target markets, deciding how to differentiate and position the

product or the service, and creating and maintaining a marketing mix that will hopefully prove

successful with the selected target market(s)—all within the context ofmarketing objectives.

Marketing objectives are what a company wants to accomplish with its marketing strategy:

“Strategy is not a wish list, set of goals, mission statement, or litany of objectives…A marketing

strategy is a clear explanation of how you’re going to get there, not where or what there is. An

effective marketing strategy is a concise explanation of your stated plan of execution to reach

your objectives…Marketing without strategy is the noise before failure.” [5]

KEY TAKEAWAYS

 Small-business marketing and big business marketing are not

the same.

 The most significant risk factor facing small businesses is

competition.

 It is important for a small business to have a marketing

strategy so that it is better positioned to choose among

options.

 An effective marketing strategy is a concise explanation of a

business’s stated plan of execution to reach its objectives.

 Marketing without strategy is the noise before the failure.

EXERCISE

1. You just started a new job with a twenty-five-employee small

business. By accident, you found out that the company does

not have a clear marketing strategy. So far, the company has

been lucky with its product sales, but you have a feeling that

things will not continue at the same pace for much longer

because a competitor has entered the marketplace. Assuming

that you had the opportunity, how would you go about

6

convincing the owner that the smart thing to do right now is to

create a marketing strategy? Make the case to the owner.

[1] Lynne Saarte, “Small Business Marketing Is Different from Big Business Marketing,” Articlecity,

accessed December 1, 2011,www.articlecity.com/articles/marketing/article_4959.shtml; Lyndon David,

“Small Business Marketing Strategy: How Different Is It from Larger Businesses?,”Slideshare, accessed

December 1, 2011, www.slideshare.net/lyndondavid/small-business-marketing-strategy-how-different -

is-it-from-larger-businesses.

[2] Lyndon David, “Small Business Marketing Strategy: How Different Is It from Larger

Businesses?,” Slideshare, accessed December 1, 2011,www.slideshare.net/lyndondavid/small-business-

marketing-strategy-how-different-is-it-from-larger -businesses.

[3] Lyndon David, “Small Business Marketing Strategy: How Different Is It from Larger

Businesses?,” Slideshare, accessed December 1, 2011,www.slideshare.net/lyndondavid/small-business-

marketing-strategy-how-different-is-it-from-larger -businesses.

[4] Ann Handley, “Act Your Shoe Size, Not Your Age: 3 Ways to Market Smaller in 2011,” MarketingProfs,

January 3, 2011, accessed December 1, 2011,www.mpdailyfix.com/3-ways-to-market-smaller-in-2011.

[5] John Jantsch, “Marketing without Strategy Is the Noise before Failure,” Duct Tape Marketing,

November 29, 2010, accessed December 1,

2011,www.ducttapemarketing.com/blog/2010/11/29/marketing-without-strategy-is-the -noise-before-

failure.

7.2 The Marketing Strategy Process

LEARNING OBJECTIVES

1. Describe the marketing strategy process.

2. Explain why segmentation, target market, differentiation,

positioning, and website decisions are so important for the

small business.

7

3. Describe the marketing strategy decision areas for each

element of the marketing mix.

The focus of this text is on the management of the small business that is up and running as

opposed to a start-up operation. As a result, the considerations of marketing strategy are

twofold: (1) to modify or tweak marketing efforts already in place and (2) to add products or

services as the business evolves. In some instances, it may be appropriate and desirable for a

small business to backfit its marketing activities into a complete marketing strategy framework.

The marketing strategy process consists of several components (Figure 7.1 "Marketing Strategy

Process"). Each component should be considered and designed carefully: company vision,

company mission, marketing objectives, and the marketing strategy itself.

Figure 7.1 Marketing Strategy Process

8

Source: Susan I. Reid, “How to Write a Great Business Vision Statement,”Alkamae, February

23, 2009, accessed December 2, 2011,http://alkamae.com/content.php?id=285; “Marketing

9

Plan: Marketing Objectives and Strategies,” Small Business Notes, accessed December 2,

2011,http://www.smallbusinessnotes.com/starting-a-business/marketing-plan-marketing-

objectives-and-strategies.html.

Vision and Mission

It is awfully important to know what is and what is not your business. [1]

Gertrude Stein

The vision statement tries to articulate the long-term purpose and idealized notion of what a

business hopes to become. (Where do we see the business going?) It should coincide with the

founder’s goals for the business, stating what the founder ultimately envisions the business to

be. [2] Themission statement looks to articulate the more fundamental nature of a business (i.e.,

why the business exists). It should be developed from the customer’s perspective, be consistent

with the vision, and answer three questions: What do we do? How do we do it? And for whom do

we do it?

Both the vision statement and the mission statement must be developed carefully because they

“provide direction for a new or small firm, without which it is difficult to develop a cohesive

plan. In turn, this allows the firm to pursue activities that lead the organization forward and

avoid devoting resources to activities that do not.” [3] Although input may be sought from others,

the ultimate responsibility for the company vision and mission statements rests with the small

business owner. The following are examples of both statements:

 Vision statement. “Within the next five years, Metromanage.com will become a leading

provider of management software to North American small businesses by providing customizable,

user-friendly software scaled to small business needs.” [4]

 Mission statement. “Studio67 is a great place to eat, combining an intriguing atmosphere with

excellent, interesting food that is also very good for the people who eat there. We want fair profit

for the owners and a rewarding place to work for the employees.” [5]

Marketing Objectives

Marketing objectives are what a company wants to accomplish with its marketing. They lay

the groundwork for formulating the marketing strategy. Although formulated in a variety of

ways, their achievement should lead to sales. The creation of marketing objectives is one of the

10

most critical steps a business will take. The company needs to know, as precisely as possible,

what it wants to achieve before allocating any resources to the marketing effort.

Marketing objectives should be SMART: specific, measurable, achievable, realistic, and time-

based (i.e., have a stated time frame for achievement). It has been recommended that small

businesses limit the number of objectives to a maximum of three or four. If you have fewer than

two objectives, you aren’t growing your business like you should be in order to keep up with the

market. Having more than four objectives will divide your attention, and this may result in a

lackluster showing on each objective and no big successes. [6] If a small business has multiple

marketing objectives, they will have to be evaluated to ensure that they do not conflict with each

other. The company should also determine if it has the resources necessary to accomplish all its

objectives. [7]

For small businesses that already have, or are looking to have, a web presence and sell their

products or services online, e-marketing objectives must be included with all other marketing

objectives. E-marketing is defined as “the result of information technology applied to traditional

marketing.” [8] The issues of concern and focus will be the same as for traditional marketing

objectives. The difference is in the venue (i.e., online versus onground). Examples of e-

marketing objectives are as follows: to establish a direct source of revenue from orders or

advertising space; improve sales by building an image for the company’s product, brand, and/or

company; lower operating costs; [9] provide a strong positive customer experience; and

contribute to brand loyalty. The ultimate objective, however, will be “the comprehensive

integration of e-marketing and traditional marketing to create seamless strategies and

tactics.” [10]

The Marketing Strategy

With its focus being on achieving the marketing objectives, marketing strategy involves

segmenting the market and selecting a target or targets, making differentiation and positioning

decisions, and designing the marketing mix. The design of the product (one of the four Ps) will

include design of the company website. Differentiation refers to a company’s efforts to set its

product or service apart from the competition, and positioning is placing the brand (whether

store, product, or service) in the consumer’s mind in relation to other competing products based

11

on product traits and benefits that are relevant to the consumer. [11] These steps are discussed

inSection 7.3 "Segmentation and the Target Market" through Section 7.8 "Marketing Strategy

and Promotion". It has been said that “in some cases strategy just happens because a market

and a product find each other and grow organically. However, small businesses that understand

the power of an overarching marketing strategy, filtered and infused in every tactical process,

will usually enjoy greater success.” [12]

KEY TAKEAWAYS

 The marketing strategy process consists of company vision,

company mission, marketing objectives, and the marketing

strategy itself.

 The company vision: Where do we see the business going?

 The company mission: Why does our business exist?

 Marketing objectives: What do we want to accomplish with

our marketing strategy?

 Marketing strategy: How will we accomplish our marketing

objectives?

 Marketing objectives should be SMART: specific, measurable,

achievable, realistic, and time-based (i.e., have a specific time

frame for accomplishment).

 Small businesses should limit the number of objectives to three

or four to increase the chances that they will be achieved.

 E-marketing objectives must be included with traditional

marketing objectives.

 E-marketing and traditional marketing should be integrated to

create seamless marketing strategies and tactics.

 Marketing strategy involves segmenting the market, selecting a

target or targets, making differentiation and positioning

12

decisions, and designing the marketing mix. The design of the

product will include design of the company website.

EXERCISES

1. Develop the marketing objectives for Frank’s All-American

BarBeQue restaurant in Darien, Connecticut.

2. Explain the differences between an onground marketing

strategy and an online marketing strategy.

[1] Jay Ebben, “Developing Effective Vision and Mission Statements,” Inc., February 1, 2005, accessed

December 1, 2011,www.inc.com/resources/startup/articles/20050201/missionstatement.html.

[2] Jay Ebben, “Developing Effective Vision and Mission Statements,” Inc., February 1, 2005, accessed

December 1, 2011,www.inc.com/resources/startup/articles/20050201/missionstatement.html.

[3] Jay Ebben, “Developing Effective Vision and Mission Statements,” Inc., February 1, 2005, accessed

December 1, 2011,www.inc.com/resources/startup/articles/20050201/missionstatement.html.

[4] Susan Ward, “Sample Vision Statements,” About.com, accessed December 1,

2011, sbinfocanada.about.com/od/businessplanning/a/samplevisions.htm.

[5] “Organic Restaurant Business Plan: Studio67,” Bplans, accessed December 1,

2011,www.bplans.com/organic_restaurant_business_plan/executive_summary_fc.cfm.

[6] “How to Choose Marketing Plan Objectives,” accessed January 24,

2012,www.hellomarketing.biz/planning-strategy/marketing-plan-objectives.php.

[7] Adapted from “Marketing Plan: Marketing Objectives and Strategies,” Small Business Notes, accessed

December 1, 2011,www.smallbusinessnotes.com/starting -a-business/marketing-plan-marketing-

objectives-and-strategies.html.

[8] Judy Strauss and Raymond Frost, E-Marketing (Upper Saddle River, NJ: Pearson Prentice Hall, 2009),

6.

[9] Bobette Kyle, “Marketing Objectives for Your Website,”WebSiteMarketingPlan.com, December 10,

2010, accessed December 1,

2011,www.websitemarketingplan.com/marketing_management/marketingobjectivesarticle.htm.

13

[10] Judy Strauss and Raymond Frost, E-Marketing (Upper Saddle River, NJ: Pearson Prentice Hall, 2009),

5.

[11] Dana-Nicoleta Lascu and Kenneth E. Clow, Essentials of Marketing (Mason, OH: Atomic Dog

Publishing, 2007), 179.

[12] John Jantsch, “The Cycle of Strategy,” Duct Tape Marketing, March 29, 2010, accessed December 1,

2011, www.ducttapemarketing.com/blog/2010/03/29/the-cycle-of -strategy.

7.3 Segmentation and the Target Market

LEARNING OBJECTIVES

1. Explain segmentation and the target market.

2. Explain why segmentation, the target market, differentiation,

positioning, and website decisions are so important for a small

business.

3. Describe the marketing strategy decision areas for each

element of the marketing mix.

Whether market segments and target markets are selected on the basis of intuition, marketing

research, or a combination of the two, they are the basis for creating an effective marketing mix

for any small business. Segmentation and target market decisions must be made for both

onground and online customers.

Segmentation

14

Market segmentation, dividing a market into relatively homogeneous subgroups that behave

much the same way in the marketplace, is the necessary precursor to selecting a target market or

target markets. The extensive bases on which a company is able to segment a market are

presented in Table 6.1 "Market Segmentation". The challenge is knowing which group(s) to

select. Many small business owners have a good intuitive sense of the segments that make sense

for the business, and they choose to go with that intuition in devising their marketing strategy.

However, that intuition may not be precise or current enough to be of the most help in planning

a marketing strategy. Marketing research can be of help here, even to the smallest of businesses.

Marketing research can help the small business identify and refine the segments that offer the

greatest opportunities. Part of that process will be to identify segments that meet the

requirements of measurability,substantiality, stability, accessibility, actionability,

anddifferential response. [1] Meeting these requirements will increase the chances for successful

segmentation.

 Measurability. Is it easy to identify and estimate the size of a segment? A small business that

moves forward without a clear definition of its market segments is working blind. Intuition can

only go so far. Are there people who are interested in freshly baked cookies for dogs (it would

seem so), and how many of these people are there? (Check outHappy Hearts Dog Cookies.)

 Substantiality. Is the segment large and profitable enough to justify an investment? A small

business may not require a huge number of customers to be profitable, but there should be

enough people interested in the product or the service being offered to make operating the

business worthwhile. Fancy designer clothes for dogs, for example, is a business that can

survive—but not everywhere (seewww.ralphlauren.com/search/index.jsp?kw=pup&f=Home).

 Stability. Stability has to do with consumer preferences. Are they stable over time? Although

segments will change over time, a small business needs to be aware of preferences that are

continuously changing. Small businesses can be more nimble at adapting their businesses to

change, but too much volatility can be damaging to a business’s operations.

 Accessibility. Can a business communicate with and reach the segment? A small business

interested in women who work outside the home will present greater communication challenges

than will stay-at-home wives and mothers.

15

 Actionability. Is a small business capable of designing an effective marketing program that can

serve the chosen market segment? There was a small manufacturer of low-priced cigarettes in

Virginia that found it difficult to compete with the big brands and other established lower-priced

brands such as Bailey’s. The manufacturer’s solution was to sell to Russia where “Made in

Virginia, USA” worked very well with customers and retailers. [2]

 Differential response. The extent to which market segments are easily distinguishable from

each other and respond differently to company marketing strategies. [3]

For the small business

that chooses only one segment, this is not an issue. However, the small manufacturer of ramen

noodles in New York City needs to know whether there are different segments for the product and

whether the marketing strategy will appeal to those segments in the same positive way.

Once multiple segments have been identified, it is necessary to select a target market or target

markets. If only a single segment has been identified, it becomes the target market.

Target Market

The selection of a target market or target markets will be based on the segments that have been

identified as having the greatest potential for the business. (In Chapter 6 "Marketing Basics", a

target market refers to one or more segments that have been chosen as the focus for business

operations.) Only some of the people in the marketplace will be interested in buying and/or

using a company’s product or service, and no company has the resources to be all things to all

people. Resources are always finite, but this will especially be the case for the small business, so

all marketing efforts should be directed as precisely as possible.

Selecting the target market should be guided by several considerations: [4]

 Financial condition of the firm. Limited resources may dictate the selection of only one

target market.

 Whether the competition is ignoring smaller segments. If yes, this may be a ready-made

target market.

 Is the market new to the firm? If yes, concentrating on one target market may make the most

sense.

 Specific need or want. Does the proposed target market have a specific need or want for the

product or the service?

16

 Ability to buy. Does the proposed target market have the resources to buy the product or the

service?

 Willingness to buy. Is the proposed target market willing to buy the product or the service?

 Will this target market be profitable? There needs to be enough demand to make money.

Choosing the right target market is a critical part of the marketing strategy of a small business.

The target market should be the best match for a company’s products and services, thus helping

to maximize the efficiency and effectiveness of its marketing efforts.

If a small business wants to go with a niche market, the same considerations apply. A niche

market is a small, more narrowly defined market that is not being served well or at all by

mainstream product or service marketers. The great advantage of pursuing a niche market is

that you are likely to be alone there: “other small businesses may not be aware of your particular

niche market, and large businesses won’t want to bother with it.” [5] Ideally, a small business

marketing to a niche market will be the only one doing so. Niches are very important to small

businesses that want to sell pricey chocolates (see, for

example, www.cocoadolce.com/about.php). They focus on niches such as weddings, seasonal

offerings, and specialty items. They also sell online in order to reach a broader market.

KEY TAKEAWAYS

 Market segments and target markets are the basis for creating

an effective marketing mix.

 Segmentation and target market decisions must be made for

both onground and online customers.

 Market segmentation precedes the selection of a target

market.

 There are many ways to segment a market.

 Segments must be measurable, substantial, stable, accessible,

actionable, and easily distinguishable from other segments.

 The target market should be the segment or segments that

show the greatest profit potential for a small business.

17

 A niche market is a small, more narrowly defined target market

that is not being served well or at all by other businesses.

EXERCISES

1. How should the market for Frank’s All-American BarBeQue be

segmented for his new restaurant in Darien, Connecticut? How

should Frank decide on a target market or target market(s)? Be

specific. Do not assume that the Darien market is the same as

the Fairfield market.

2. Assume that you work for a small manufacturer of children’s

hair-care products. What criteria would you use for effective

segmentation? How would you then decide on a target market

or target markets? Be specific. [6]

[1] Dana-Nicoleta Lascu and Kenneth E. Clow, Essentials of Marketing (Mason, OH: Atomic Dog

Publishing, 2007), 175–76.

[2] Dana-Nicoleta Lascu and Kenneth E. Clow, Essentials of Marketing (Mason, OH: Atomic Dog

Publishing, 2007), 176.

[3] Dana-Nicoleta Lascu and Kenneth E. Clow, Essentials of Marketing (Mason, OH: Atomic Dog

Publishing, 2007), 176.

[4] Susan MaGee, “How to Identify a Target Market and Prepare a Customer Profile,” accessed January

24, 2012, http://edwardlowe.org/erc/?ercID=6378; Adapted from “3 Reasons to Choose a Target

Market,” Morningstar Marketing Coach, December 16, 2008, accessed December 1,

2011,www.morningstarmultimedia.com/3-reasons-to-choose-a-target-market.

[5] Susan Ward, “Niche Market,” About.com, accessed December 1,

2011,sbinfocanada.about.com/cs/marketing/g/nichemarket.htm.

[6] Adapted from Dana-Nicoleta Lascu and Kenneth E. Clow, Essentials of Marketing(Mason, OH: Atomic

Dog Publishing, 2007), 185.

7.4 Differentiation and Positioning

18

LEARNING OBJECTIVES

1. Explain differentiation and positioning.

2. Explain why differentiation and positioning are so important

for an online marketing strategy and an onground marketing

strategy.

3. Understand that a successful differentiation strategy cannot be

copied by competitors.

4. Understand that there are many ways to differentiate a

product or a service.

5. Understand that successful positioning of a small business or

its brand is built on a well-defined target market combined

with solid points of differentiation.

Differentiation and positioning considerations are relevant to each element of the marketing

mix as well as to onground and online marketplaces. The small business should be working

toward a competitive advantage—“the ability to perform in one or more ways that competitors

cannot or will not match.” [1]

Differentiation

Differentiation, setting yourself apart from the competition, is one of the most important and

effective marketing tools available to small business owners. [2] Effective differentiation can put a

business (or a brand) in the top position among the competition, but an ineffective

differentiation strategy can leave a business buried in the middle or at the bottom of the

pack. [3] A successful differentiation strategy cannot be imitated by competitors—but it can bring

you great success with consumers. [4]

Small businesses, whether business-to-consumer (B2C) or business-to-business (B2B), can

differentiate their companies or brands in many different ways: quality, service, price,

distribution, perceived customer value, durability, convenience, warranty, financing, range of

products/services offered, accessibility, production method(s), reliability, familiarity, product

ingredients, and company image are all differentiation possibilities. [5] There are others as well,

19

limited only by the imagination. One way to uncover differentiation possibilities is to examine

customer experience with a product or a service by asking the following questions: [6]

 How do people become aware of their needs for a product or a service?

 How do customers find a company’s offering?

 How do customers make their final selection?

 How do consumers order and purchase the product or the service?

 What happens when the product or the service is delivered?

 How is the product installed?

 How is the product or the service paid for?

 How is the product stored?

 How is the product moved around?

 What is the consumer really using the product for?

 What do consumers need help with when they use the product?

 What about returns or exchanges?

 How is the product repaired or serviced?

 What happens when the product is disposed of or no longer used?

No matter what the bases are for differentiating a company or a product, the decision should be

made carefully with the expectation that the difference cannot be imitated. When customers are

asked whether they can tell the difference between a particular small business and its closest

competitors, the answer will hopefully be yes. Video Link 7.1

Bedbug Dog Sniffs Up Profits

An unusual means of differentiation.

money.cnn.com/video/smallbusiness/2010/08/13/sbiz_bedbug_canine.cnnmoney

Positioning

20

Positioning is about the mind of the consumer: placing a company or a brand (sometimes they

are the same, e.g., Carbonite, CakeLove, and Sugar Bakery & Sweet Shop) in the consumer’s

mind in relation to the competition.[7]

The positioning decision is often the critical strategic decision for a company or a brand because

the position can be central to customers’ perception and choice decisions. Further, because all

elements of the marketing program can potentially affect the position, it is usually necessary to

use a positioning strategy as a focus for developing the marketing program. A clear positioning

strategy can ensure that the elements of the marketing program are consistent and supportive. [8]

Both big and small businesses practice positioning, but small businesses may not know it as

positioning. The small business owner thinks about positioning intuitively, does not use the

terminology, and does not always know how to promote the position. Additionally, in many if

not most small businesses, “the positioning of products is based on the opinions of the business

owner, his or her family, and selected friends and family.” [9] This notwithstanding, an

understanding of positioning should be in every small business owner’s tool kit.

Successful positioning of a small business or its brand is built on a well-defined target market

combined with solid points of differentiation. There are six approaches to positioning that the

small business owner should consider: [10]

1. Positioning by attribute. The most frequent positioning strategy. The focus is on a particular

attribute, a product feature, or customer benefit.CakeLove in Maryland positions itself as “cakes

from scratch” with natural ingredients (not the least of which is butter, lots of it).

Video Link 7.2

Welcome to CakeLove

An introduction to CakeLove bakery.

vimeo.com/8942129

2. Positioning by price/quality. A very pervasive approach to positioning. Some small

companies and brands offer more in terms of service, features, or performance, and a higher price

serves to signal this higher quality to the customer. As an example, Derry Church Artisan

Chocolates are very expensive, but they position themselves as having the very high quality that

justifies a high price. [11]

21

3. Positioning by use or application. Focuses on how a product is used or different applications

of the product. A solitary custom tailoring shop located in a downtown professional office area

could position itself as the only tailor where you can conveniently go “for lunch.”

4. Positioning by product user. The focus shifts from the product to the user. KIND Snacks are

cereal bars positioned as a snack bar for those who are interested in a snack that is wholesome,

convenient, tasty, healthy, and “economically sustainable and socially impactful.” [12]

It is a great