Translations:

Other formats:

Other Pages:

Modules

Site Map

Key Words

Contact

Utility Documents

Useful Links

Contents:

• Top
• Introduction
• Research
• Product
• Place
• Price
• Promotion
• Conclusion
• Bottom

Contents:

• Top
• Introduction
• Research
• Product
• Place
• Price
• Promotion
• Conclusion
• Bottom

Contents:

• Top
• Introduction
• Research
• Product
• Place
• Price
• Promotion
• Conclusion
• Bottom

Contents:

• Top
• Introduction
• Research
• Product
• Place
• Price
• Promotion
• Conclusion
• Bottom

Contents:

• Top
• Introduction
• Research
• Product
• Place
• Price
• Promotion
• Conclusion
• Bottom

Contents:

• Top
• Introduction
• Research
• Product
• Place
• Price
• Promotion
• Conclusion
• Bottom

Contents:

• Top
• Introduction
• Research
• Product
• Place
• Price
• Promotion
• Conclusion
• Bottom

MICRO-ENTERPRISE MARKETING

by Phil Bartle, PhD

Reference Document

What training in marketing is needed for participants in micro enterprise income generation?

Introduction to Effective Marketing:

This document is not a full course on the principles and skills of marketing, but sketches the important aspects with which the field mobilizer should be familiar, and should aim at training participants in the target group.

The target group includes low income community members whom the mobilizer is organizing into groups for purposes of training, and channelling credit to start and develop very small (micro) scale independent enterprises for the creation of wealth. The whole series is aimed at low per-capita income nations.

You, the mobilizer, want to assist your target group in starting or developing their own small scale business. Apart from being able to produce a product, they need a market to sell it in. This requires effective marketing. They need to (a) research the market to find out necessary information about it.

Then they must (b) have a product that is in demand, (c) a suitable place to sell it in, (d) a price that is not too high or too low, and (e) they must promote their product. You, as their mobilizer, must train them in these concepts and skills, and or arrange for them to get training. This appendix has six parts to it: 1. Introduction to Effective Marketing, 2. Research, 3. Product, 4. Place, 5. Price, and 6. Promotion.

What is Marketing?

Marketing includes all business activities involved in the flow of goods and services from the point of initial production until they reach final production and the final consumer.

Skills in marketing are needed by entrepreneurs, even those who own and run micro-enterprises. Whether they provide a physical product or a service, they can not do so unless they get paying customers. Getting customers to purchase the service or product is the purpose of marketing.

Effective Marketing:

Production and marketing are important for satisfying customers needs and so to enable entrepreneurs to make some profits.

The message that you, as mobilizer, want to get across to your target group is: "Customers are the most important people to your enterprise. If you do not provide what they want, at prices they are willing to pay, and treat them with respect, they will go some where else. Without customers there will be no sales and your enterprise will have to close down."

Furthermore, you want to let your participants know: "Satisfied customers will come back and buy more from your enterprise. They will tell their friends, neighbours and others about your product or services." More satisfied customers mean more sales (higher turnover) and therefore sustainable profits.

The word "effective" means that it produces the desired results. An entrepreneur may engage in classic marketing procedures, and pass a degree in business or commerce, but that is meaningless unless the marketing activities help to sell the product or service.

Learn About Your Market:

To a producer, the "market" is the sum total of all potential customers. It is important to know as much as possible about your customers and what they want and need. Learning about the market can be called "market research." Although this sounds sophisticated, it is as important to the micro entrepreneur as it is to the huge multi national corporations.

The principle that you, as mobilizer, want to demonstrate to your target group is: "When you understand your customer's needs you can decide what products or services to provide."

As mobilizer, you need to get the following messages across to your participants.

In order to increase your sales:

• Find out who your buyers are;
• Find out how large your market is; and
• Make sure your market gives you a reasonable profit margin.

Find Out Who Your Buyers Are:

Finding answers to these questions is called "market research." Market research is very important for your enterprise. It means getting information about your market.

Market research can be done in many practical ways. Here are some examples:

• Talk to your customers. Ask them, for example:
  • Where do they usually buy from?
  • If they are satisfied with your goods and services;
  • If there are other goods and services they would like;
• Listen to what your customers say about your goods and services;
• Find out why some customers do not stop to buy from you; and
• Study your competitors businesses.

Research your competitors to find out about:

• Their products or services, quality and design;
• What prices they charge;
• How they attract customers;
• What customers say; and
• Why customers buy from them.

Ask other producers and distributors:

• Which goods sell best;
• What they think about your products; and
• What they think about your competitors products.

Satisfy Your Customers:

To satisfy your customers, increase your sales and make a profit, you need to find out:

• What product or service your customers want;
• At what location your micro-enterprise should be so that you can reach your customers;
• What price your customers are willing to pay; and
• What promotion activities you can use to inform your customers and attract them to buy your products or services.

These are the essential tasks that help a producer to reach a customer. All the four go together and if no attention is paid to any one of them the business is bound to fail. It is like a chair with four legs. If one breaks, the others cannot support the chair.

In setting up a training programme for potential micro entrepreneurs, consider having at least one, low cost, half day workshops for each of the four topics (and one day workshop on market research after that).

Let us look a them each in turn.

Product:

As mobilizer, you need to let your target participant entrepreneur know the following:

"To be successful you must have products or services which your clients want.
Product is the first foundation stone to reach the customers.
Therefore it is important to find out what your customers need.
Produce a product that is wanted."

Many of your target group, when they first consider going into business for themselves, think of retailing merchandise. Of course, you, as a mobilizer, should not dictate to them what sector to choose, or to avoid. You may, however, let them know that the market is glutted with too many small scale merchants, those who buy wholesale (or from shops) and sell in retail in smaller quantities (eg in stalls or walking on the streets).

What wealth do they create? Little; just part of the service of delivering the goods to the final customer, and selling in smaller quantities that low income customers can afford. Without dictating, you should let your participants know the reasons why they should consider avoiding petty trade.

Wherever possible, encourage your target group members to choose activities of production, such as the repair or manufacture of needed items, or the initial processing of agricultural products.

These are where the greatest economic needs are in developing countries, and where micro enterprises are most likely to prosper and be sustained, and where they will contribute the most to economic development.

Place:

This is the third foundation stone in marketing. "Place" means location. "Place" also means the different ways of getting products or services to your customers.

This is called distribution. Micro-enterprises should be located near to where customers are or where customers can get easy access to the service or product.

You the mobilizer must help your target group to decide on a place where the product will sell best, and then consider:

• Different categories of buyers;
• Transport costs;
• Storage facilities and costs; and
• Delivery process: direct or through intermediaries.

In your function as mobilizer, set up training sessions where your participants can discuss this fully, provide suggestions to each other, and share ideas with one another. Do not dictate to them.

Price:

What prices should you charge? Price is the second foundation stone to reach your customers. Setting prices can be difficult, but is very necessary. Your target group's enterprises may have good products or services, but if their prices are too high, they will not sell much.

When prices are too low, the business may fail for lack of profit. When entrepreneurs work out a price on a product or service, they need to know how cost, price and profit work together.

Total profit from sales depends on:

• How much profit is made on each product or service; and
• How many of each product or service is sold.

The number of items sold, multiplied by profit per product, equals total profit. In your mobilizing activities, you might set up some exercises in calculating profits, estimating different prices and quantities sold, during half day workshops on pricing.

Promotion:

How do entrepreneurs get people to know about the product and attract them to buy? They might have the right products, the right prices and be located in a strategic place. Will they prosper?

"Promotion" is the last element of marketing (discussed here) for entrepreneurs to reach their customers.

Let your target group (beneficiaries, participants) know the following:

"Perhaps your enterprise may be in a strategic place, with good products,
at prices acceptable to buyers but sales may still be low.
Why? Maybe the entrepreneurs do not tell people about their products and services.
Entrepreneurs should not sit and wait for customers to come to them;
promotion is needed.

As mobilizer, your message to your target participants is:

You need to get this message to the participants:

"Advertising is giving information to your market to make people
more interested in buying your goods and services.
Interest them in buying your goods and services.
This can be through signs, posts, or price lists display."

Sales promotion is everything one does to make customers buy more when they have come to the premises. This is done in many ways (eg display, encouraging people to buy more or try new products, selling products that go together {eg bread with margarine}, publicity).

Conclusion:

As a mobilizer, you have organized groups of low income persons, and want to assist them in starting or developing their own small scale business. While they may be able to produce a product to sell, they need a market to sell it in. This requires effective marketing.

To market their product, they must (a) research the market to find out necessary information about it. Then, to ensure they can sell their product, they must (b) have a useful and demanded product, (c) they must have a suitable place to sell it in, (d) they must have price that covers their expenses but is not so high that no one will buy, and (e) they must promote their product.

Petty Trade:

© Copyright 1967, 1987, 2007 Phil Bartle
Web Design by Lourdes Sada

––»«––

Last update: 2012.07.15