The importance of SMEs to Markets - Free Essay Example

It is very important for SMEs to look at the problems and the limitations to draw a realistic solution in order to overcome the shortcomings. Marketing is one business that must be used appropriately by the entrepreneur to launch and develop the new venture successfully. Marketing should be enhanced and improved with experience. Owner should use their strengths to overcome their weaknesses, learn from mistakes and assess what went wrong in order to avoid such mistakes in future, learn from successes and assess all of the circumstances that contribute to success. (Gilmore et al., 2001) Financial Issues Financial institutions refuse to lend any money to SMEs unless they produce formal plans which show there is an ongoing and realistic commitment to marketing planning. So, to solve the financial constraints of SMEs, they need to produce formal plans that will outline the direction in which the company is headed. Logos and trademark As the SMEs lay much emphasis on Quality and Presentation, well designed logos and registered, popular trademarks would have been an additional benefit for them. These are very powerful ways of capturing and communication a message of quality. Owners must be aware that customers look for securities and reassure that products they are buying are not counterfeit. Introducing a distinctive logo and trademarks and being able to carry the same message of quality to different people over time present real challenges for SMEs but it also guarantees long term recognition and success. Require considerable investments of resources and commitment bearing in mind that results will be obtained only over future. Packaging Packaging is often neglected by owners they feel that the packaging will be of no use to the customers. This is erroneous concept. Product when presented attractively, add value and prestige to the already expensive product. Good packaging also communicates a message of quality. Hence packaging should be exclusively designed and revised periodically to maintain the prestige of the product. Promotion Strategies From the survey, we have seen that only a few SMEs make use Media. The key to attracting these new businesses is visibility. Too many resellers rely on word of mouth and do very little active marketing. Good quality product/service only does not bring customers. Communication Channels are needed to create awareness; other means of advertising should be pursued and much emphasis needs to be laid on media. To attract maximum customers, SMEs must make us of those media which are most viewed and in used by customers. SMEs can make use of SMS, monthly newsletter, direct mail, and telecalling to target focus group. Brochures and Pamphlets Continuously distributing of brochures and pamphlets will make SMEs presence felt in the public, this will pull customers their way. Market Research SMEs need to perform Market Research in order to determine customer needs. Only market information can determine strategic segmentation and targeting. The success of adjustments to the marketing mix is tracked by consumer research. Unfortunately, successful entrepreneurs withdrew from such formal research methods of gathering market information, which is an important aspect of their marketing activities. Entrepreneurs should reconsider this issue and look into it. Customer Database SMEs in Mauritius must manage their customer database so as to identify which are the most profitable customers and as such provide a more personalized service to them. By providing differentiated service to their most profitable customers, SMEs will increase their lifetime value to these customers. Customer satisfaction Customer satisfaction is a vital part of marketing strategy- concern for customers is a positive reflection of sensitivity to customer feelings. Concern for customer satisfaction must be stem from management and must extend to every member of the staff within the organization. After sales there is a need to ensure customer satisfaction even though the product has moved through a channel of distribution and is several stages away from the producer Using Segmentation in Customer Retention SMEs need to apply Segmentation to improve their customer retention. It also helps to ensure that they are focused on retaining their most profitable customers and employing these tactics most likely to retain these customers. Follow up SMEs need to interact with the customers and ask them for their feedback all the time, if there are any grievances and unsatisfaction, follow up need to be done on that and if something is amiss they definitely need review it and try to rectify it whenever possible. Training The government of Mauritius need to provide support in the form of customized training in both marketing, mentoring and support allowing companies to be self sufficient in their own research activities so that they can remain within their budgets. Training should include appropriate mix of interpersonal and technical skills. Only a small proportion of any organizationacirc;â‚ ¬Ã¢â€ž ¢s staff comes into contact with customers. These frontline people are expected to represent the organization and they will be seen in that role by their customers. They must be supported by an organization that is clear on the need for a customer focus and which actively ensure that the marketing concept is understood accepted and acted upon by everybody. Sales staff should be regularly trained so as to be able to offer the best of their ability clarifications and technical specifications information requested to customer Location Sales outlets are crucial determinants to product success. The product offering need to be accessible in the place and at the time it is needed by the target market. It must be possible for people to find the location easily and ambiance needs to be welcoming. SMEs Trade fair SMEs should be encouraged to participate more in trade fairs. These events represent valuable source of experience which also enable SMEs owners to test potential market for their products. SMEs owners will be given an opportunity to know more about their competitors, products of competitors and sales channels through anonymous discussions with competitoracirc;â‚ ¬Ã¢â€ž ¢s staff present at the trade fairs Become Visible If customers are not coming to them, SMEs should go to customers, this will help them be more in the public eye. They may do so by setting up a booth near a shopping mall or hypermarkets and begin talking to people about thier product or service. The more that people see them around the community being involved in events, the more customers will come to you. SMEs can also get involved in charitable organizations to help raise awareness of a cause. Differentiation A brand can differentiate a business and make it stand apart from the competitors.Acirc;   SMEs generally feel that branding is for the big companies and that they can only afford to focus on product and price. SMEs can also build good brands by developing a well-planned brand strategy to successfully differentiate their products and services from their competitors. This helps them to increase the market size, sustain the market share, competing on attributes which is not just a price. Niche Market SMEs need to look for Niche market as it stands a greater chance of success because of disinterest on the part of large businesses. When new products come onto the market, they typically aim to satisfy the wishes of the majority. This always leaves the minority with a less than satisfactory solution or sometimes, no solution at all. This leave gaps in the market for specialised applications or unusual designs, tastes, sizes and so on. It is these gaps which can provide a growth base for smaller firms. SMEs need to track new products and services within their sector, and develop solutions which pick up demand which is neglected by the larger companies Marketing Plan / Feasibility Study SMEs need to develop their marketing plan as effective marketing plan consist of important things that help firm succeed. First, it helps the business to understand not just the product but the industry as well. It helps in identifying major trends that is associated with major economic or demographic changes, like economic cycles, aging population, and so on. Other trends interact with these, such as, the increasing use of the internet, and so on. Next, it helps to identify the target market for the product and who are the competitors. According to which the company define their product pricing, distribution, and positioning in the market. Marketing plan will thus prevent SMEs from going off track. Online strategies The majority of SMEs are not connected to the Web. SMEs need to evaluate their online strategies to ensure they are not left behind in this fast-paced environment. Understanding the future of online channels is a must for any organization that hopes to compete effectively in todays technology-centric world. As consumers use the internet more, SMEs will increasingly have to ensure their web presence is effective if they hope to survive Social website Social Websites like facebook, twitter, if used appropriately, is an excellent resource for reaching more customers. Advantages that they will get from them are, they effective communication tool and offer cost effective ways for SMEs to enhance their product or service distribution networks. Pricing You can differentiate your business through your pricing strategy. By pricing your products or services below that of the competition, you can to cut into their market share by stealing some of their customers. Higher pricing can help you cultivate an image of quality or prestige. If employing a low-price strategy, be sure that you can still remain profitable. If you offer higher prices, you may need to also offer additional services to attract customers, such as free delivery or extended business hours. Avoiding a Price War From the survey, results obtained show that SMEs compare prices with competitors then set their own price. Setting the lowest price is not a strong position for small business as larger competitors with more resources will destroy any small business trying to compete on price alone. SMEs need to understand the demand structure in their industry, review their costs and profit goals. The low price strategy is best avoided by small business. SMEs with solid pricing strategies can escape a price war and low price position. Networking SMEs need to know that apart from word of mouth, Networking is also of a high importance to them. They have to maintain good relationship with both buyers and sellers in the market; this will help in increasing sales and get more customers. Well spread network will help product recognition. It will also help in improving the services of the SMEs and thus SMEs may alter their products according to the needs of consumers. Whilst it is believed that the present study has contributed to a more in depth understanding of the marketing strategies of SMEs, the results so viewed is only a foundation for more thorough follow up research.