A perspective on Business Marketing
Bill Simcox

Sad but true - life can be tough for SMEs. They share the same challenges as large companies, but with limited financial muscle or human resources. They have to punch above their weight.

And that's where marketing comes in. The problem is, marketing budgets can be tight and, in smaller companies, the same person frequently has split responsibilities for both sales and marketing - often without formal marketing expertise. For that reason, I am going to concentrate on some very simple concepts that can really make all the difference for an SME.

Creating a 'brand'

Lesson number one: a brand is not just a logo.

Lesson number two: branding is not just for large companies.

For marketing professionals, branding is all about perception; the perceptions people have about a company or its products. Products (and companies) are like people. They have personalities. If that sounds pretentious, let me give an example:

• Volskwagen and Skoda are part of the same business and under the skin of the cars they share many of the same components. VW has evolved a brand personality that is around quality and performance whereas Skoda has evolved a value proposition, with the obvious benefits and drawbacks associated with this. Neither is right or wrong, they are just different as a result of being targeted at different sectors of the market, each with their own profit pool.

I have chosen to use a ‘big company’ example simply because all readers will recognise the brands. But can small companies really create a brand? Well, a lady called Anita Roddick once had a small shop selling body oils and fragrances. She also had a brand built on a very strong value system that was just right for the times. The rest is history.

The benefits of a brand are significant. A lot of small businesses find themselves competing on price, yet people are willing to pay more for a brand if they have an affinity with it. For example, Waitrose has a loyal customer base that chooses to pay more for some of their foodstuffs than other retailers’ customers. People choose Norton anti-virus software in spite of there being free solutions that can be downloaded. A good endorsement for Norton’s brand marketing.

Once you have a brand, invest in it, nurture it as you would a child. It then becomes possible to enter new markets on the strength of the brand. Richard Branson's empire is a perfect example.

So how might this apply to, say, a small plumbing business? First, the company should identify and promote its core values - such as 'reliability ', always sticking to the quote, turning up on time, cleaning up properly at the end of the job, phoning back a week later to ensure the customer is satisfied. A perfect brand name for this company would be something like 'No Hassle Plumbing'. Taking a leaf out of Richard Banson's book, over time they might expand into 'No Hassle Air Conditioning', 'No Hassle Electrics' etc.

The four 'A' approach

Ask yourself four things:

• Awareness - how do people hear about my brand?
• Association - what things do they associate with my brand, as opposed to that of my competitors?
• Advantage - what are the merits of my brand over my competitors' brands?
• Affinity - does my brand/company have a 'personality' of its own that makes people feel affection for it?

As to Awareness, it is not necessary to resort to expensive advertising. PR publicity stunts can be remarkably cost effective - editors need stories. A local baker launching a new cake is no story. Baking a giant cake and giving it to the local Children's Hospital is.

The web is another outstandingly cost effective way of gaining awareness, whatever size the company.

Price vs value

Marketeers often refer to the four Ps, or the Marketing Mix

• Product
• Pricing
• Promotion
• Place

Smaller companies seem to have most difficulty addressing price. The problem stems from adopting a cost-plus strategy: "My product costs X. I need to make a profit, so I will charge X + Y". I often find people who consistently under-price themselves this way.

Price should not only have a simple arithmetic relationship with cost. You can try to sell your products/services for whatever price you choose; even giving them away (you would probably be surprised with the results if you did!). The secret is to understand your buyers’ values and charge what you are worth. If you should over-price, you will quickly learn and can take appropriate action. Once under priced, it is difficult to raise the bar. Under-pricing results in the whole business engine suffering a vicious circle. When working to tight margins, there is a greater risk of things going wrong and then insufficient margin to remedy problems - quality suffers and reputation is destroyed.

There are many other topics I could cover, but space prevents me. To find a layman's guide to such things as the Marketing Mix, PR, Market Research, Branding and so on, I strongly recommend the Chartered Institute of Marketing's knowledge hub.

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