Marketing for a Small Business: Steps you can take to implement an effective strategy on a budget

As a small business owner, you have lots of big decisions to make everyday and have a lot of time and money invested in your business venture.  You may not have a marketing degree or have anyone on staff with any formal marketing training, but it is still vital for you to create and implement a marketing plan and set a realistic budget for your business to ultimately achieve your goals and be successful.  There are several steps you can take to develop and implement an effective marketing strategy while staying within your limited marketing budget. 

Step 1: Define your target market and positioning statement

Who is your target customer?
Where are they located? 
What are their defining characteristics? 
What are their needs? 
How do we want to be positioned in the mind of your target customer? 

You need to answer these basic questions before you can develop or implement any of your marketing objectives and strategies. 

Step 2: Develop a SWOT Analysis

It is important to know what you do well, and what you still need to work on.  You also need to identify factors that are within your control and those that are external to your business.  A SWOT Analysis breaks down a company’s strengths, weaknesses, opportunities, and threats. 

• Strengths are the internal attributes of the organization that are helpful in achieving objectives and can be used as a basis in determining your competitive advantage.
• Weaknesses are the internal attributes that are harmful or unfavorable to achieving objectives.
• Opportunities are external conditions that are helpful to achieving the objective.
• Threats are changes to the external environment that may damage your business’ performance. 

Once you have completed your SWOT analysis, you need to evaluate each component individually.  You should decide how you can use each strength, how you can improve upon each weakness, how to exploit every opportunity, and mitigate each threat. 

Step 3: Know your competition

After you have determined who your target market is and evaluated your SWOTs, you need to know the ins and outs of your competition. 

Where is the competition located relative to you-local vs. national vs. global competitive landscape?
How do their products/services compare to yours?
What is their competitive advantage and how does it compare to yours?
How does their product/service offering compare to yours?
Do they utilize the web?

Answering these types of questions will help you learn what your competition does right and adopt some of these practices, while also learning what your competitive advantages are and learning how to leverage these. 

Step 4: Define your marketing objectives

You need to determine what you want to accomplish from your marketing plan and set goals and objectives to measure your success.  Marketing objectives establish the goals and standards of marketing efforts pertaining to products, sales, and marketing that must be achieved in order to fulfill the overall objectives of the company.  These objectives will help measure marketing success and gain insight into underlying conditions facing the company that cannot be seen with financial measures. 

What are your target market objectives?

You need to determine how many new customers you expect to gain with respect to your marketing efforts.  This could be defined by an increase of 100 new customers this year, or increase new customers by 25% over last year. 

What are your objectives for existing customers?

Everyone always says it’s cheaper to keep an existing customer than gaining a new one.  It is important to focus your marketing efforts towards your existing customers.  Upsell. Upsell. Upsell.  Your objectives could be defined by an increase in existing customer spending by 20%, or increase existing customer spending by $10,000 this year. 

What are your promotion objectives?

Examples of promotional objectives could be to build brand awareness in a certain area or among a specific target market, increase website traffic, increase traffic to your store, to differentiate your product or service, etc.  Promotion is just one aspect of the Marketing Mix, which is also known as the 4 P’s (Product, Price, Promotion, and Place).  Make sure that your promotional objectives are clearly stated and measureable.  To achieve these promotion objectives, keep in mind that there are four main ways to promote your business: advertising, publicity, sales promotion, and personal selling.   

What are your research and development objectives?

Do you plan on developing new products or services in the future?  It is important that you continue to conduct market research to make sure that you are coming up with the products and services that meet the needs of tomorrow’s customers.  Consumer preferences are constantly changing so it is imperative that you stay on top of consumer trends and continue to create better products, and improve your overall operational processes.
 
Step 5: Implement your marketing strategies

In order to achieve your marketing objectives, you need to determine the programs and methods that will be the most effective while still staying within your budget.  Some inexpensive suggestions include:

• Direct Mail
• E-newsletters
• Contests
• Sponsorships
• Trade Shows
• Development or Redesign of your Website
• Publicity
• Networking
• Distribution of Marketing Materials (Brochures, Business Cards, Flyers)
• Product Demos
• Search Engine Optimization
• E-promotion
• Develop Programs to retain existing customers (preferred customer programs, referral programs, etc.)

Be creative.  Every business is different so test out different methods and figure out what works best for you.  If your business is really limited on budget, but are willing to put in the time, energy, and imagination, you can also use a more unconventional approach toward promotion called guerrilla marketing.  Guerilla marketing involves targeting customers in an unexpected way that is memorable, generates buzz, and is in turn spread virally.  Guerrilla marketing has also been referred to as buzz marketing and viral marketing.  Check out this blog for a list of 50 guerrilla marketing tactics you can try. 

Step 6: Set your marketing budget

Setting your marketing budget can be difficult, especially as a small business with a limited amount of money available to allocate toward marketing in the first place.  One of the biggest mistakes a small business can make is to cut back on the marketing budget first when money is tight, or neglect to establish a budget and play it by ear.  How do you expect to grow your business if your target market doesn’t know you exist?  Many businesses will set their marketing budget as a percentage of net sales, typically ranging from 1 percent up to about 10 percent of net sales.  Here are a few factors to consider when determining your budget:

• Are you a new competitor in the marketplace?  If so, you will have to spend more to establish market share.  Likewise, if you have an established market share, you may need to spend more to maintain your share. 
• If you are competing in a fast-growing market, you will need to spend more on marketing.
• Are you competing on price?  Both very high-priced and low-priced products and services require higher marketing expenditures to convince your target market that your product is a good value.
• If product quality is one of your main selling points, you will need to spend more to convince customers that your product is unique.

Step 7: Measure your success

In order to track the progress of your marketing plan, you need to establish a set of controls to measure success.  Some measureable controls include customer surveys, monitoring website traffic, performance of promotional activities, budget analysis, sales analysis, etc.  Setting controls will allow you to monitor your proposed plans as they proceed and make adjustments as needed to get back on track.