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Small business and marketing

NNCO_SMB Starting your small business


of 271 5th September 2016

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Contents Introduction Learning outcomes 1 Customers, consumers and clients 2 Buying behaviour

2.1 Complex buying behaviour 2.2 Dissonance-reducing buying behaviour 2.3 Habitual buying behaviour 2.4 Variety-seeking buying behaviour

3 Marketing approaches 4 Communicating with customers

4.1 Advertising 4.2 Sales promotions 4.3 Personal selling 4.4 Public relations (PR) 4.5 E-commerce and m-commerce

5 Social media in marketing 5.1 Responding to customer use of social

media 5.2 Using social media





6 Working with customers 7 Your customers 8 Personal reflection 9 What you have learned in this section Section 2 quiz References Acknowledgements Glossary





IntroductionWelcome to the second section of the Starting your small business course where you will look at the relationships between

businesses and customers and explore how a business can

attract, and more importantly keep customers. Once completed

you will have the opportunity to obtain the ‘Small business and

marketing’ badge. This section will take approximately three hours

to complete.

In this section, you will:

look at the customers, consumers and clients in your

business

look at the role of marketing in small businesses

explore some basic marketing principles and different

ways of communicating with customers

identifying target customers

work out a suitable marketing approach for your

business.





Figure 1 Starting your own small business handbook

View description - Figure 1 Starting your own small business handbook

To help you along the way, there are a number of activities where

you can reflect on what you have been learning, and think about

how you can apply these new skills and knowledge in practice.





Learning outcomesBy completing this section and the associated quiz, you will be

able to:

describe how a small business could use marketing to

attract customers

identify how social media links small businesses to

their customers.





1 Customers, consumers and clientsAny business is totally reliant on the people or businesses who use

and pay for the products or services, even social enterprises

require money to operate.

The customer:

is the individual buying from an organisation

can also be another organisation, for example, when a

bookstore buys from a book publisher

could also be the consumer if the person or

organisation uses what has been bought. This is not

the case with the bookstore: there the bookstore is the

customer of the publishing company and a person

buying a book from the bookstore is likely to be the

consumer.

Figure 2 Who is the consumer?

View description - Figure 2 Who is the consumer?

Here are two simple examples that highlight the distinction:





You choose, buy and eat an ice cream. Here you are

the customer and consumer.

Your child chooses and eats an ice cream but you pay

for it. Here your child is the consumer and you are

the customer.

This short video from John Foster discusses why it is important to

pay attention to customers:

Watch the video at YouTube.com.

View transcript - Uncaptioned interactive content

The term ‘client’ is generally associated with the provision of

professional services (such as accountancy and legal services). In

these contexts, the specific service being provided is normally

discussed and agreed between client and provider. While the client

has more influence over the specification of the product or service

being provided.

If we take the example of one of our case studies, Red Bush Brewery, the customers could be the local shops purchasing the

bottles of beer directly from the brewery. (To open the case study

in a new tab on a PC, hold down the Ctrl key when clicking.)

Local people entering the shop and purchasing the beer from the

shop could then be classed as the consumers. Imagine now that

Red Bush breweries is approached by a hotel chain that wants of 271 5th September 2016



http://www.open.edu/openlearn/ocw/mod/oucontent/olinkremote.php?website=NNCO_SMB&targetdoc=Case%20studies&targetptr=1.4


https://www.youtube.com/v/XK3cNcuvuMs&hl=en&fs=1&rel=0


them to produce a special beer in hotel branded bottles. The hotel

might discuss the taste, size and ingredients in the beer. In this

case the hotel is more of a client than a customer.

Activity 1Allow about 15 minutes

Consider the other mini case studies.

Can you identify the customers, consumers and clients for each of

them?

Note your thoughts on this table and then click ‘save and reveal

comment’ for some suggestions.

Business

Customer, client, consumer e





xamples

Bike-a-lot

Provide your answer...

JJ Components


Mucky Pets


Turn-it-

Provide




http://www.open.edu/openlearn/ocw/mod/oucontent/olinkremote.php?website=NNCO_SMB&targetdoc=Case%20studies












round

your answer...

View comment - Activity 1







2 Buying behaviourTry thinking about customers differently, rather than thinking about

them ‘buying’ a product or service, think about them ‘exchanging

value’. Customers need to feel that the value they receive is equal

to or greater than the value they give.

Watch this short video, where this concept is discussed.

Watch the video at YouTube.com.

Consumers do not all make buying decisions in the same way.

Depending on the type of product being bought, consumers may or

may not search for different amounts of information on the product

beforehand. Consumer behaviour is often explained according to

one of the following four types of behaviour:

complex buying behaviour

dissonance-reducing buying behaviour

habitual buying behaviour

variety-seeking buying behaviour.

Which kind of behaviour consumers engage in depends on how

involved they are in a particular purchase. This partly depends on

their personality and partly on the kind of purchase being made.




https://www.youtube.com/v/9I2baWR-rqg&hl=en&fs=1&rel=0


Figure 3 Assael’s four types of buying behaviour

View description - Figure 3 Assael’s four types of buying behaviour

2.1 Complex buying behaviour

Figure 4 Complex buying behaviour





View description - Figure 4 Complex buying behaviour

Characterised by high consumer involvement and

significant differences between brands.

Tends to occur when a purchase is expensive, risky or

purchased infrequently, or when consumers use the

product to express themselves.

Happens rarely, examples include buying a:

house or flat

car

specialised IT equipment

wedding dress.

Figure 5 Buying a wedding dress is classed as complex buying

View description - Figure 5 Buying a wedding dress is classed as complex buying





In this kind of buying behaviour, consumers are most likely to go

through all or most of the stages of the buyer decision process

discussed next.

2.2 Dissonance-reducing buying behaviour

Figure 6 Dissonance-reducing buying behaviour

View description - Figure 6 Dissonance-reducing buying behaviour

Consumers are highly involved in the purchase, but

have difficulties determining the differences between

brands.

‘Dissonance’ can occur if consumers worry afterwards

that they may have made the wrong choice. Examples

include:

financial services products, such as

insurance or investment of 271 5th September 2016




Consumer will choose such products on the basis of

price or convenience and then seek further

confirmation, after the purchase, that they made the

right choice.

Figure 7 Using recommendations and rankings for services and goods –

dissonance-reducing buying

View description - Figure 7 Using recommendations and rankings for services and goods – dissonance-reducing ...

2.3 Habitual buying behaviour





Figure 8 Habitual buying behaviour

View description - Figure 8 Habitual buying behaviour

Most frequently demonstrated type of buying

behaviour.

Consumers are not very involved in the purchase.

Occurs when item is:

bought very frequently

does not cost much money

perceived to have few significant

differences between brands.

Consumers tend to buy the same brand again and

again out of habit, but if their particular brand is not

available, or if there is a good offer on a competing

brand, they may switch quite easily. Examples

include:

household detergents

soap





toothpaste.

This is the area where marketers often use promotions to entice

consumers.

Figure 9 The same basket, week-in, week-out – habitual buying

View description - Figure 9 The same basket, week-in, week-out – habitual buying

2.4 Variety-seeking buying behaviour

Figure 10 Variety-seeking buying behaviour

View description - Figure 10 Variety-seeking buying behaviour





Consumers perceive significant differences between

brands but are not particularly involved in the

purchase.

Many groceries fall into this category. Examples

include:

different types of biscuit

bread

ice-cream.

Consumers often alternate between different brands

for variety.

Figure 11 Trying out a different coffee at the coffee shop – variety-seeking

buying

View description - Figure 11 Trying out a different coffee at the coffee shop – variety-seeking bu ...

Activity 2Allow about 20 minutes of 271 5th September 2016




Consider the five mini case studies. (To open the case study in

a new tab on a PC, hold down the Ctrl key when clicking.) What

sort of consumer buying behaviour would you expect for each of

them?

Complete the following table and then click ‘save and reveal

comment’ for some thoughts.

Business

Expected consumer buying behaviour

Explanation

Bike

Prov

Prov






-a-lot

ide your answer...

ide your answer...

JJ Components



Mucky Pets



Red Bush Brewery



Turn-it-

Provid

Provid





round

e your answer...

e your answer...






3 Marketing approachesMarketing is based on thinking about the business in terms of

customer needs and their satisfaction. Marketing differs from

selling because:

‘Selling concerns itself with the tricks and techniques of getting

people to exchange their cash for your product. It is not concerned

with the values that the exchange is all about. And it does not, as

marketing invariable does, view the entire business process as

consisting of a tightly integrated effort to discover, create, arouse

and satisfy customer needs.’ (Levitt, 1960)

In other words, marketing has less to do with getting customers to

pay for your product as it does developing a demand for that

product and fulfilling the customer's needs.

In order to understand the nature of marketing it is helpful to

consider marketing in a number of different contexts. The basic

principles of the marketing concept, i.e. the importance of making

customers central to the business’s marketing efforts, apply to

virtually all marketing contexts. However, at a slightly more

detailed level, there are differences between marketing to

consumers and marketing to other organisations.





Figure 12 Marketing

View description - Figure 12 Marketing

Consumer marketing A ‘consumer market’ refers to individuals and families who buy

products and services for their own consumption. This is distinct

from business markets, which consist of businesses (and other

organisations) who buy goods and services in order to incorporate

them into their own production or other organisational processes.

Consumer markets therefore exclude all types of buying by

organisations. Consumer marketing is perhaps the kind of

marketing that most people think of first, when they think of

marketing.

Business-to-business marketingThis is where businesses sell to other organisations (not just other

businesses, even though that is what it is called). Purchases by





organisations account for over half of all economic activity in

industrialised countries (Ellis, 2011), even if business-to-consumer

marketing is more visible to the general public. Typically, several

organisations are involved in producing every product or service

sold to a consumer or end-user. An example of this would be

farmers selling milk to a dairy, the dairy processes the milk and

then sells it to the supermarket. We are starting to see innovations

where the middle man is being cut out.

Social marketingSocial marketing is the idea that the tools of marketing can be

applied to health and social behaviours. Marketing techniques

have been used to shift various behaviours such as exercise,

smoking, drinking and drug use (Hastings and Domegan, 2014).

FundraisingVoluntary sector organisations that depend on donations to carry

out their work increasingly use marketing techniques for their

fundraising activities. They may conduct market research to find

out what motivates those who support particular causes and how

best to reach them. And they increasingly provide techniques

similar to ‘after sales services’ to let donors know how their funds

are being used and what is being achieved with the money.






Consider the five case studies and think about which of the

forms of marketing you could expect them to undertake based on

these descriptions. (To open the case study in a new tab on a PC,

hold down the Ctrl key when clicking.)

Show your thoughts by writing the names of the businesses in the

boxes below. You should limit the businesses to a maximum of two

types of marketing.

Type of marketing

Business

Consumer marketing


Business-

Provide






to-business marketing

your answer...

Social marketing


Fundraising







4 Communicating with customersBusinesses need to communicate with customers, Marketing is

one term used for this communication. A business essentially

needs to give customers either:

information about the product

information about the business.

We will now look at five approaches to getting this information

through:

advertising

sales promotions

personal selling

public relations

e-commerce and m-commerce.

4.1 Advertising





Figure 13 Local sandwich board advertising a takeaway shop

View description - Figure 13 Local sandwich board advertising a takeaway shop

Advertising is carried out at a distance and communicates with a

large number of people through a paid media channel. These

channels include television and radio, print media such as

newspapers or magazines, billboards, leaflet drops, cinema

advertising, the internet in the form of advertising banners and

pop-ups on websites, sponsored links in search engines, company

presence in social media or targeted advertising through text

messages to mobile phones.

Online advertising has become an increasingly significant part of

the advertising landscape. Consider the popularity of the video of 271 5th September 2016




sharing platform YouTube. Part of the YouTube business model is

to raise revenue through paid-for advertising. Companies can pay

for and use different online advertising formats. Display ads are

placed next to the video the consumer is trying to watch. In order

to watch these videos, the consumer has to click on them. Overlay

ads are semi-transparent ads, often in the form of banners, which

appear in the lower 20% of the video the consumer is trying to

watch. Skippable video ads run before the consumer can watch

their chosen video but can be skipped after five seconds. Non-

skippable video ads also play before the consumer’s chosen video

but cannot be skipped. By placing their advertisement next to or

within particular video content, advertisers can target specific

consumer groups, e.g. those interested in watching science fiction

movies.

4.2 Sales promotions





Figure 14 BOGOF sales approach to increase sales temporarily

View description - Figure 14 BOGOF sales approach to increase sales temporarily

‘Sales promotions’ try to create a temporary increase in sales by

offering customers an incentive to buy the product.

Money-based promotions – these are easy to implement and are

very common (but therefore don’t generate much excitement).

They can give money back to people who would have bought

anyway and are expensive:

cash-back (collect tokens to get refund)

immediate price reductions at point of sale

coupons issued online or in printed media. of 271 5th September 2016




Product-based promotions are less likely to ‘cheapen’ the product

image:

‘X % extra free’

‘buy one, get one free’

free samples

‘piggy-backing’ with another product: for example,

putting a free pack of coffee whitener with a pack of

instant coffee.

Gift, prize or merchandise-based promotions:

gifts in return for proof of purchase (toy received on

presentation of a certain number of labels from a

product)

loyalty schemes (the nectar card or stamping card

where you get a free item after a set number of visits

or purchases)

competitions or sweepstakes (buying a product entitles

you to enter a prize draw).

Sales promotions are often used for lower value items. (If they

were used for premium or luxury brands they might ‘cheapen’ the

brand image in consumers’ eyes.) They tend to work best as part

of a bigger communications campaign, where advertising or public

relations activity builds the brand image and sales promotions





encourage people to try the product or otherwise boost short-term

sales.

4.3 Personal sellingPersonal selling can be a very powerful means of marketing,

perhaps the most powerful a business has at its disposal. A

salesperson who talks personally to a potential customer, finds out

about their needs and can explain the benefits of the product, is

more likely to be successful in making a sale than any advertising,

sales promotion or public relations that the business could use

instead. Customers also have the opportunity to ask direct

questions about the product. However, a sales force also tends to

be the most expensive marketing communications tool for a

business. Personal selling is therefore mostly used for expensive

or highly technical products that need a lengthy decision-making

process.

4.4 Public relations (PR) Public relations (PR) is about creating a favourable image for the

business. It often involves creating and placing favourable news

stories. Unlike advertising it is not paid for, but newspapers or

other print, television and online media present the story if they

think it is of sufficient interest to their audience. This also means

that the journalists publicising the story have the freedom to





present it in their own way and put their own slant on it. Public

relations operate by a number of key routes, including word-of-

mouth, press and television news stories, and personal

recommendation. Usually PR aims to put a positive image of the

business and its products into people’s minds and conversations.

Good PR can be more effective than advertising as it is free and

thus saves on the promotional budget; it is often more credible in

the eyes of consumers and it is more likely to be read or viewed as

it is considered news rather than advertising.

One form of word-of-mouth via social media is the consumer

ratings facility on hotel booking websites, such as Trip Advisor.

Here, consumers can give a particular hotel or restaurant a rating

between 1 and 5 stars and can also leave a comment about their

impressions of the facilities and the service provided there.

4.5 E-commerce and m-commerce





Figure 15 M-commerce – mobile purchases and payments were

approximately 40% of all payments at the end of 2015

View description - Figure 15 M-commerce – mobile purchases and payments were approximately 40% of all ...

Electronic commerce (e-commerce) and mobile commerce (m-

commerce) – using the internet and mobile devices or





smartphones to do business – are increasingly featured in

business today.

Although e-commerce still only represents a relatively small

proportion of the world's entire business its importance is growing

for many organisations. In 2014 the number of people worldwide

who owned a mobile phone for the first time, exceeded the number

of people who had access to a desktop computer (ComScore,

2014, cited in Smart Insights, 2015). These channels have enabled

the direct distribution of goods and services as companies are able

to contact consumers directly via their computers, mobile devices

or smartphones.

The ways in which companies conduct their business through e-

commerce or m-commerce reflects on their brands; internet-based

interactions with consumers are not simply functional transactions,

but marketing communications that influence consumers’

perceptions, trust and relationship with companies and their

brands. In many cases, internet-based interactions between

businesses and consumers replace or supplement the in-store

experience.

As well as building long-term relationships with existing customers,

businesses need to ensure that potential customers can find them

easily online. When consumers use a search engine to seek

particular goods or services, where a company appears in the of 271 5th September 2016




results listing is likely to determine whether or not its website is

viewed. How many times have you read to page three or four in

the listings on a Google search? Search engine optimisation

(SEO) ‘is the process of improving the visibility of a website/web

page via unpaid search results’ (Bell Media, 2016). It involves

considering how search engines operate and which search

engines and search terms target consumers use. Prices can be set

by price per click or price per view. This can end up being

expensive.


Consider the websites of two businesses from which you have

purchased something: one you remember as a positive experience

and one you remember as a negative experience. Think about the

ways in which the site designs affected your experience as a

customer and how the companies’ brands are communicated

through the websites.






5 Social media in marketing

Figure 16 The Open University’s social media site

View description - Figure 16 The Open University’s social media site

You are likely to have at least some idea of what social media and

social networking websites are and what they do.

Social media has been defined as follows:

‘Websites and applications that enable users to create and share

content or to participate in social networking.’ (Oxford Dictionary,

2016).

Some examples of social media you may be familiar with are:

Facebook of 271 5th September 2016




Instagram

LinkedIn

TripAdvisor

YouTube

Twitter.

When trying to understand how social media can transform

marketing practices, it is useful to start by looking at how

consumers use social media. Consumers of different ages, with

different social backgrounds and different income levels will use

social media in different ways. For a business to be able to target

the correct consumers, it will need to understand their behaviour. A

small business owner could look for the groups and discussions

that are most relevant to the customers most likely to be interested

in the product or service (referred to as segmentation in the

marketing world) and then focus the effort on these groups (this is

commonly referred to as targeting). The idea is to get the most out

of the effort used.

You have already learned that marketing can be a two-way

process, where consumers play an active part in using products,

interpreting and passing on marketing communications, and

influencing marketers' actions through their preferences, gathered

by marketers through marketing information systems. Digital





technology has given consumers an even more active role in

certain aspects of marketing.

5.1 Responding to customer use of social mediaSocial media may be used by both organisations and consumers

for listening, gathering information and communicating, and plays

an increasingly influential role in consumer decision-making and

behaviour.

Figure 17 Surveys provide valuable feedback

View description - Figure 17 Surveys provide valuable feedback

Discussion forums on social media have increased the range of

opinions available to consumers about products; rather than just

taking account of family and friends’ experiences, consumers are

now able to take into account product reviews from large numbers

of other consumers online. Such sources of information are

particularly powerful when an offering is high involvement,

expensive or difficult to assess before purchase, for example, in





the case of a holiday or a visit to a restaurant. Consumers vary in

their level of engagement with digital technology, according to their

personality, demographic characteristics, geographic location and

economic status. Even if you do not use social media, you may still

have consulted online reviews of books or hotels before

purchasing or booking them to reduce the perceived risk involved

in buying in situations where it is difficult to evaluate an offering

before purchase.

Much of the content on social media is, of course, generated by

their users. From the point of view of marketing, social media

provides consumers with the opportunity to be creative participants

in the marketing process, to varying degrees.


Consider a time when a service or product fell short of your

expectations.

What was your reaction to this?

Looking at this diagram where does your experience fit?

Now consider the other responses here, think of different

examples that could be put in these boxes:





Figure 18 Social media impact of supplier failing to meet customer

expectations (adapted from Grégorie et al., 2015)

View description - Figure 18 Social media impact of supplier failing to meet customer expectations ...

This model looks at various responses by a consumer to a

service failure. With the level of technology most people have




http://mooreeffective.co.uk/SMEMOOC/Customer%20reaction%20to%20service%20failure/index.html%20


access to, it is rare that when we feel we have received poor

service we do nothing.

From a business point of view, the best thing we can do is let them

know so that they can take action – ‘direct complaint’.

Businesses value the opportunity to publically correct and error –

‘boasting’.

Obviously they would rather the error was not made public, but

that is becoming increasingly rare – ‘do nothing’.

A business is powerless to react to a failure if they do not know

about it and it is damaging if consumers complain about the

business but do not give them the opportunity to correct the failure

– ‘bad-mouthing’.

It is important that a business addresses the failure once it finds

out about it. If they do not this leads to a compounded failure.

Consider some of the consumer programmes you may have seen.

These programmes exist on the basis of the failure to resolve the

complaint. This could be seen as an extreme version of others

getting involved and may even contain negative publicity – ‘spite’.

Where a business is in competition with other businesses, then the

failures could present the competition with material they can use to





further their own ends. Consider some of the political campaigns in

the USA and increasingly in the UK.


5.2 Using social mediaThere is a variety of online media, but these can be broadly

categorised into three types (Corcoran, 2009):

1. owned media (for example, an organisation’s website)

2. paid media (for example, sponsorship and advertising)

3. earned media (for example, word-of-mouth (WOM)

and viral)

Table 1 Categories of online media

Media

type

Definition

Examples

The role

Benefits

Challenges





Owned

media

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m of 271 5th September 2016




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d of 271 5th September 2016




m

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Earned

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n of 271 5th September 2016




at

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a.

(Corcoran, 2009)

Listen to the first three minutes of this ten-minute audio where A.J.

Leon gives examples of businesses successfully using social

media to sell.





Video content is not available in this format.

View transcript - Uncaptioned interactive content


Now consider the role of social media possibilities for one of the

case studies, Bike-a-lot.

Make notes in the following table for each type of media. Then

click on ‘save and reveal comment’ to view our thoughts.

Owned media


Paid media


Ear

Prov






ned media

ide your answer...






6 Working with customersHaving explored the different ways to attract customers we will

now look at how a business tackles the way it wants to approach

its customers. We will look at the key questions to ask and use two

of the case studies to demonstrate how the choice is made.

The key questions are:

1. Who is the customer?

2. What is the buying behaviour of the customer?

3. What type of marketing should be used?

4. How will the customers be attracted?

5. What forms of social media are appropriate?

6. How can feedback be used to promote the products?

Continuing to look at Bike-a-lot first:

Key question

Answers

Implications

Who is the customer?

The custom

Bike-a-lot wi






er may be the trainee or a sponsor of the trainee, possibly a parent.

ll engage closely with consumers and if the customers are not the consumers, then the relati





onship between customer and consumer is likely to be very close.

What is the buying behaviour of the customer?

This is likely to be dissonance

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er

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buying behaviour where customers are buying a relatively low cost service but want to be certain th

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ey are getting the best value.

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a of 271 5th September 2016




bi

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ar

t.

What type of marketing should be used?

This is consumer marketing but may include some social marketing.

Bike-a-lot needs to appeal directly to the consumer, presenting information





clearly. The social marketing could be part of national campaigns, raising awareness in general an





d not directed at the local consumer. Social marketing may result in a degree of ‘earned social m





edia’.

How will the customers be attracted?

Advertising to raise local awareness, some sales promotion and e-commerce.

Customers need to know that the school exists and so the school needs to be visible. Custom





ers are likely to want to gain information and make bookings easily. The business cannot accomm





odate a full time sales person so e-commerce is essential. PR events such as school and college ex





periences would raise awareness. Promotions such as discounts for further training or family membe





rs could attract loyalty and free taster sessions could remove some of the risk for customers who





are undecided on the product or the supplier.

What forms of social media are appropriate?

A Facebook and LinkedIn account to raise the pr

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ofile of the school. The website is a key point of contact and the social media of consumers is desir

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How can feedback be used to promote the products?

Comments or a ‘stars’ system

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on the Bike-a-lot website. Registering for a trader rating site.

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d

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d.

Summary

Bike-a-lot provides a service that consumers may use several times but not frequently. A positive experience of training should encourage personal recommendations to family and friends generating a significant amount of business through social media. For potential customers with no direct social links the aim is to raise





awareness through PR activities and advertising the name.


Having reviewed the questions for Bike-a-lot, you will now answer

the same questions for Red Bush Brewery.

Complete the table below and then click ‘save and reveal

comment’ for some suggested answers.

Key question

Answers

Implications




What is the buying

Provid

Provid






behaviour of the customer?

e your answer...

e your answer...










How can feedback be used to

Provide

Provide





promote the products?

your answer...

your answer...

Summary







7 Your customers

Figure 19 Applying your learning





View description - Figure 19 Applying your learning

You may now like to take the ideas discussed so far and link them

to your own business idea. You can do this through two activities:

Activity 8: Create your own business case study in

a similar format to the example case studies.

Activity 9: Answer the questions for the case study

you created.


Creating your own personal case study

Complete the case study information for a business you; have

recently started, are thinking of starting or have knowledge of

through friends or family.

Name of business


Bri

Prov





ef description of business and its objectives

ide your answer...

Staffing of business


Bu

Prov





siness assets

ide your answer...

Essential skills


Mandatory licences or insurance ar






rangementsExpected turnover for year 1, year 2 and year 3






To get the most out of this course we encourage you to keep notes

on the ideas you have and the activities you complete. These

notes could be very useful as you move your business idea.

This particular activity is also used in the other sections of this

course and may have already been completed. It is suggested that

you use the same ideas for each section, though you may wish to

change or develop your ideas as you go through the different

sections.


Use the personal case study you have developed to answer the

questions and suggest how you might approach your customers.

Key question

Answers

Implications


Provide your answ

Provide your answ





er...

er...











Provide your answer.

Provide your answer.





.. ..

How can feedback be used to promote the products or services?



Summary






8 Personal reflectionHaving completed this section we suggest you take a few minutes

to reflect on what you have learned so far. You may want to save

your answers in this activity (and others in this section) in a

separate document for use after the course.


Note down your thoughts on the following questions:

What do I now know about starting up a business that I did not know before starting this section?


What things did I already know but have been confirmed through this section?


What will I now do as a result of studying this section?






9 What you have learned in this section Customers are the life blood of any business.

Customers may also be clients and consumers.

It is important for a business to know who the

customers are, where they are and how they decide

on what they buy.

There are different forms of marketing available, some

paid and some unpaid. Businesses need to use the

most effective form of marketing for their businesses.

Social media allows customers to give instant

feedback, both good and bad. Businesses need to

figure out how to use these feedback, even

complaints, for the good.





Section 2 quizWell done, you have now reached the end of Section 2 of Starting your small business , and it is time to attempt the assessment

questions. This is designed to be a fun activity to help consolidate

your learning.

There are only five questions, and if you get at least four correct

answers you will be able to download your badge for the ‘Small

business and marketing’ section (plus you get more than one try!).

I would like to try the Section 2 quiz to get my badge.

If you are studying this course using one of the alternative formats,

please note that you will need to go online to take this quiz.

I’ve finished this section. What next?You can now choose to move on to Section 3, Small business responsibilities, or to one of the other sections so you can

continue collecting your badges.

If you feel that you’ve now got what you need from the course and

don’t wish to attempt the quiz or continue collecting your badges,

please visit the Taking my learning further section, where you

can reflect on what you have learned and find suggestions of

further learning opportunities. of 271 5th September 2016



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http://www.open.edu/openlearnworks/mod/quiz/view.php?id=81246


We would love to know what you thought of the course and how

you plan to use what you have learned. Your feedback is

anonymous and will help us to improve our offer.

Take our Open University end-of-course survey.




https://www.surveymonkey.co.uk/r/SDWJH62%20


ReferencesAssael, H. (1995) Consumer Behaviour and Marketing Action, 5th edn, Cincinnati, South-Western College.

Bell Media (2016) ‘Search engine optimization’, Bell Media.

Available at: http://www.gobellmedia.com/services/search-engine-optimization/ (Accessed 19 May 2016).

Clark, A. (2015) Digital Marketing Trends for 2016 [Online].

Available at: http://www.smartinsights.com/internet-marketing-statistics/2015-vs-2016-the-digital-marketing-trends/ (Accessed 19 May 2016).

Corcoran, S. (2009) Defining earned and paid media [Online].

Available at:

http://blogs.forrester.com/interactive_marketing/2009/12/defining-earned-owned-and-paid-media.html (Accessed 3

April 2016).

Ellis, N. (2011) Business-to-Business Marketing, Relationships, Networks & Strategies. New York: Oxford

University Press.

Foster, J. (2011) Paying Attention to Your Customers [Online

Video]. Available at:




http://blogs.forrester.com/interactive_marketing/2009/12/defining-earned-owned-and-paid-media.html


http://www.smartinsights.com/internet-marketing-statistics/2015-vs-2016-the-digital-marketing-trends/



http://www.gobellmedia.com/services/search-engine-optimization/

http://www.gobellmedia.com/services/search-engine-optimization/


http://eu01.alma.exlibrisgroup.com/view/action/uresolver.do;jsessionid=98BB0A0630472CB9F2765C302747FEF1.app02.eu01.prod.alma.dc03.hosted.exlibrisgroup.com:1801?operation=resolveService&package_service_id=2643978180002316&institutionId=2316&customerId=2315 (requires

library login OU or similar) – then use

http://library.books24x7.com.libezproxy.open.ac.uk/VideoViewer.aspx?bkid=42893 (Accessed 3 April 2016).

Grégorie, Y., Salle, A. and Tripp, T.M. (2015) ‘Managing social

media crises with your customers: the good, the bad and the ugly’,

Business Horizons, vol. 58, no. 2, pp. 178–82.

Harris, F. and Shaefer, A. (2016) B100 Block 4 Marketing,

Milton Keynes, The Open University.

Hastings, G. and Domegan, C. (2014) Social Marketing: From Tunes to Symphonies, Abingdon, Routledge.

Levitt, T. (1960) ‘Marketing myopia’, Harvard Business Review,

vol. 38, no. 4, pp. 45–56.

Leon, A.J. (2014) How Do I Market My Business and Sell Products, podcast, University of Oxford. Available at

https://itunes.apple.com/gb/podcast/how-do-i-market-my-




https://itunes.apple.com/gb/podcast/how-do-i-market-my-business/id381702699?i=347242833&mt=2

http://library.books24x7.com.libezproxy.open.ac.uk/VideoViewer.aspx?bkid=42893


http://eu01.alma.exlibrisgroup.com/view/action/uresolver.do;jsessionid=98BB0A0630472CB9F2765C302747FEF1.app02.eu01.prod.alma.dc03.hosted.exlibrisgroup.com:1801?operation=resolveService&package_service_id=2643978180002316&institutionId=2316&customerId=2315




business/id381702699?i=347242833&mt=2 (Accessed 03

April 2016).

Nils de Witte [YouTube user] (2013) ‘Creating customer value’,

YouTube, 8 September [Online]. Available at:

https://www.youtube.com/watch?v=9I2baWR-rqgs

(Accessed 3 June 2016).

Open University (2016) Stakeholders in marketing and finance [Online]. Available at:

http://www.open.edu/openlearn/money-management/money/accounting-and-finance/stakeholders-marketing-and-finance/content-section-1.1 (Accessed 3 April 2016)

Oxford Dictionary (2016) ‘Social media’, in Oxford Dictionary.

Available at:

http://www.oxforddictionaries.com/definition/english/social-media (Accessed 3 April 2016).

Sable, D. (2010) Start With Creating Value Exchanges [Online

Video]. Available at:

http://eu01.alma.exlibrisgroup.com/view/action/uresolver.do;jsessionid=98BB0A0630472CB9F2765C302747FEF1.app02.eu01.prod.alma.dc03.hosted.exlibrisgroup.com:1801?operation=resolveService&package_service_id=2643978180002316&institutionId=2316&customerId=2315 (requires







http://www.oxforddictionaries.com/definition/english/social-media

http://www.oxforddictionaries.com/definition/english/social-media

http://www.open.edu/openlearn/money-management/money/accounting-and-finance/stakeholders-marketing-and-finance/content-section-1.1



https://www.youtube.com/watch?v=9I2baWR-rqg

https://itunes.apple.com/gb/podcast/how-do-i-market-my-business/id381702699?i=347242833&mt=2


library login OU or similar) – then use

http://library.books24x7.com.libezproxy.open.ac.uk/VideoViewer.aspx?bkid=35019 (Accessed 3 April 2016).

UpsideLearning [YouTube user] (2014) ‘5 steps to improve

customer satisfaction’, YouTube, 14 February [Online]. Available

at: https://www.youtube.com/watch?v=XK3cNcuvuMs

(Accessed 3 June 2016).




https://www.youtube.com/watch?v=XK3cNcuvuMs




AcknowledgementsExcept for third party materials and otherwise stated in the

acknowledgements section, this content is made available under a

Creative Commons Attribution-NonCommercial-ShareAlike 4.0 Licence.

The material acknowledged below is Proprietary and used under

licence (not subject to Creative Commons Licence). Grateful

acknowledgement is made to the following sources for permission

to reproduce material in this unit:

Text

Social media definition from Oxford Dictionary (2016).

Figures

Figures 1, 15 and 19: courtesy Moore Effective Solutions Ltd.

Figure 2: © Nikada/iStockphoto.com.

Figures 3, 4, 6, 8 and 10: adapted from Assael, H. (1995)

Consumer Behaviour and Marketing Action, 5th edition,

Cincinnati, South-Western College

Figure 5: © FurmanAnna/iStockphoto.com.







Figure 7: © Aquir/iStockphoto.com.

Figure 9: © CR Management GmbH and Co KG/iStockphoto.com.

Figure 11: © emojoez /iStockphoto.com.

Figure 12: © annatodica/iStockphoto.com.

Figure 13: © wdstock/iStockphoto.com.

Figure 14: © Kemalbas/iStockphoto.com.

Figure 16: webpage from The Open University,

http://www.open.ac.uk/community/main/.

Figure 17: © hafakot/iStockphoto.com.

Figure 18: adapted from Grégoire, Y., Salle, A. and Tripp, T.M.

(2015) ‘Managing social media crises with your customers: the

good, the bad, and the ugly’, Business Horizons, vol. 58, no. 2,

pp. 173–82.

Tables

Table 1: adapted from Corcoran, S. (2009) ‘Defining earned and

paid media’ [Online]. Available at:

http://blogs.forrester.com/interactive_marketing/2009/12/defining-earned-owned-and-paid-media.html.






http://www.open.ac.uk/community/main/


AV maerial

Section 1: John Foster transcript: from Upside Learning,

https://www.upsidelearning.com/uk/.

Section 2: ‘Buying behaviour’ transcript from YouTube video, Nils

de Witte (2013).

Section 5.2: A.J. Leon, http://podcasts.ox.ac.uk/how-do-i-market-my-business-and-sell-products-chapter-5, and

transcript available under

https://creativecommons.org/licenses/by-nc-sa/2.5/.

Every effort has been made to contact copyright owners. If any

have been inadvertently overlooked, the publishers will be pleased

to make the necessary arrangements at the first opportunity.




https://creativecommons.org/licenses/by-nc-sa/2.5/

http://podcasts.ox.ac.uk/how-do-i-market-my-business-and-sell-products-chapter-5

http://podcasts.ox.ac.uk/how-do-i-market-my-business-and-sell-products-chapter-5

https://www.upsidelearning.com/uk/


Glossaryclient

A client is a customer who is buying bespoke advice, solutions or a professional service rather than a standard product or service.

consumerThe consumer ultimately uses the product or service.

customerCustomers are the individuals or businesses purchasing products or services from the business. A customer could also be a client and consumer.





Activity 1CommentBusiness

Customer, client, consumer examples

Bike-a-lot

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.

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vi of 271 5th September 2016




d

u

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th

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ur

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n

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st of 271 5th September 2016




af

f

a

n

d

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or

ki

n

g

wi

th

th

e

m

to

d

e

v

el

o

p

a





in

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vi

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e

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pl

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ig

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e

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n

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er

e

d

a

cli

e

nt

.

It is useful for a business to know who their direct customer is and

the relationship between the customer and the final consumer.

Since a business usually focuses their communication with the

customers who buy the products or services, this understanding

helps to target the communication.

For example, if the customer is the final consumer, the

communication will focus on the value and benefits of the product.

If the customer is not closely linked to the consumer, such as in a

shop situation, the communication to the customer might be

focused on cost, delivery and shelf life.

Back to Session 1 Activity 1 of 271 5th September 2016




Activity 2CommentBusiness

Expected consumer buying behaviour

Explanation

Bike-a-lot

Dissonance-redu

Learning to ride a m





cing buying behaviour

otorcycle is an involved activity and it can be expected that a learner would look for options and reco





mmendations before booking lessons. Learners travel long distances to attend a school with a good re





putation.

JJ Components

Complex buying behaviour

Specialist components are likely to be sourced after a significant number of meetings and





possibly a procurement process. Business purchases for products are likely to fall into this cat





egory.

Mucky Pets

Habitual buying behaviour

Pet owners may try out a number of groomers, but once they have one they trust, the regu





lar purchase becomes a habit.

Red Bush Brewery

Variety-seeking buying behaviour

The artisan nature of the beer and the fact it is locally produced, m





akes the beer interesting. Consumers are likely to try it for it’s novelty factor first.

Turn-it-round

Dissonance-re

Consumers of thi





ducing buying behaviour

s service are likely to have limited choice in the services available but would compare the li





mited choices and select the one with the best record and reputation. This can be a big decisio





n for a prisoner and the opportunities to correct a wrong choice are limited.

Back to Session 2 Activity 1





Activity 3CommentType of marketing

Business

Consumer marketing

Bi

k

e-

a-

lo

t,

M

u

ck

y

P

et

s,

R

e





d

B

u

s

h

Br

e

w

er

y

Business-to-business marketing

JJ

C

o

m

p

o

n

e

nt

s,

R

e

d





B

u

s

h

Br

e

w

er

y,

T

ur

n-

it-

ro

u

n

d

Social marketing

Bi

k

e-

a-

lo

t





Fundraising

T

ur

n-

it-

ro

u

n

d

You may have chosen different boxes and that is fine. There is no

correct answer here. We have made a couple of reasonable

assumptions. The key points from our boxes are:

At least two of the businesses are not likely to focus on

the consumers in their marketing. JJ Components and

Turn-it-round are not likely to gain business by

targeting the consumers directly. They would focus on

the customers, who are likely to be other businesses.

We have suggested Bike-a-lot might under take social

marketing with respect to safe riding practices as part

of a national campaign.

We have made an assumption that Turn-it-round gets

some money through fundraising activities.

Back to Session 3 Activity 1 of 271 5th September 2016




Activity 4CommentAs so often, your answer will depend on the websites you chose to

look at. You might have noted whether the website was easy to

find, whether the products you were interested in were shown

upfront or whether you had to click through several linked pages to

find them.

You might also have considered how good the product choice was

and how easy it was to compare the different products, and

whether the price and the delivery conditions were right for you.

Your impression was perhaps also influenced by how easy it was

to use the site. Most consumers greatly prefer websites that: make

sense, are easy to use and include search facilities within the

website.






Activity 5CommentSocial media has made giving feedback and comment very easy,

this is encouraging people to share thoughts and experiences.

The ‘instant’ nature of feedback through social media can be both

a blessing and a curse to businesses. The blessing is that the

business has an opportunity to quickly resolve issues and keep

customers. The curse is that the unhappy customers are more

likely to complain and any failure to resolve the complaint will

escalate.

Have you ever seen a variation of this comment in a café or

restaurant?

‘If you enjoyed your meal- tell your friends. If you didn’t – tell us’.

This is perhaps the essence of how businesses would like social

media to work for them.

Whether or not you have given negative feedback yourself, it is

hard to believe that you are not aware of someone you know who

has.





Activity 6CommentOwned media

Bi

k

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ci of 271 5th September 2016




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ct of 271 5th September 2016




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tr of 271 5th September 2016




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c of 271 5th September 2016




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di of 271 5th September 2016




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te of 271 5th September 2016




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w of 271 5th September 2016




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nt of 271 5th September 2016




s

w

h

er

e

in

ci

d

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nt

al

m

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nt

io

n

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of

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Activity 7CommentKey question

Answers

Implications


The customer is likely to be local shops, cafés or pubs. Customers at

Two distinct forms of marketing required to attract businesses





farmers’ markets or via the internet are also likely to be the consumers.

and individual consumers.


This is likely to be

Whilst the hope is





variety-seeking from both shops and consumers.

to get consumers buying the product out of habit, it is more likely that the specialist beer will





be purchased for its unusual qualities. So these will need to be emphasised in the marketing.

What type of

Ther

F





marketing should be used?

e will be an element of business-to-business and consumer marketing.

or

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g

s

o

m

et

hi of 271 5th September 2016




n

g

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al

.


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. of 271 5th September 2016




Pr

iz

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a

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n.

How can feedback be used to

Commen

The brew





promote the products?

ts or a ‘stars’ system on the web site looking at the different beers.

ery could use the rating system to help with production plans or to start a social media discussi





on.

Summary

The Red Bush Brewery product is competing with a broad range of generic and similar products. It needs to build on the whole beer experience and involve the consumer in the experience otherwise alternatives will be purchased from a discount supermarket. The unique aspect of the beer is the local production and local experience, Red Bush Brewery need to bring this clearly into their interactions





with the consumer. Selling to local shops will depend on demand, so the personal selling approach will be supported by consumers requesting the product.






Figure 1 Starting your own small business handbookDescriptionThe graphic shows a representation of a man wearing a tie and looking smart. He is gesturing his left hand to a red sign which says ‘Marketing, how to reach your customers. Starting your own small business’.

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Figure 2 Who is the consumer?DescriptionThe photo shows an image of a father and his daughter. They are both eating ice creams.

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Figure 3 Assael’s four types of buying behaviourDescriptionIn this matrix, Assael uses the difference between brands and the level of involvement of the consumer to give four genarlised buying behaviours. As with most matrices, the lines between boxes is not a firm line and the descriptions should be seen more as tendencies rather than definite behaviours. The closer to the centre lines, the less obvious the behaviour and the further from the centre lines, the more clearly evident the behaviour is likely to be.






Figure 4 Complex buying behaviourDescriptionIn this matrix, based on Figure 3, Assael uses the difference between brands and the level of involvement of the consumer to give four genarlised buying behaviours. ‘Complex’ is highlighted.






Figure 5 Buying a wedding dress is classed as complex buyingDescriptionThe photo shows two ladies looking over a wedding dress.






Figure 6 Dissonance-reducing buying behaviourDescriptionIn this matrix, based on Figure 3, Assael uses the difference between brands and the level of involvement of the consumer to give four genarlised buying behaviours. ‘Dissonance-reducing’ is highlighted.






Figure 7 Using recommendations and rankings for services and goods – dissonance-reducing buyingDescriptionThe graphic displays an award stating ‘Best buy’ three times.






Figure 8 Habitual buying behaviourDescriptionIn this matrix, based on Figure 3, Assael uses the difference between brands and the level of involvement of the consumer to give four genarlised buying behaviours. ‘Habitual’ is highlighted.






Figure 9 The same basket, week-in, week-out – habitual buyingDescriptionThe image shows a supermarket basket containing a number of household items including cat food, biscuits and skin cream.






Figure 10 Variety-seeking buying behaviourDescriptionIn this matrix, based on Figure 3, Assael uses the difference between brands and the level of involvement of the consumer to give four genarlised buying behaviours. ‘Variety-seeking’ is highlighted.






Figure 11 Trying out a different coffee at the coffee shop – variety-seeking buyingDescriptionThe infographic shows a number of different types of coffee, and their relative calorie intake. Listed are caramel macchiato, breve, americano, ice coffee, latte, caramel frappuccino, espresso, flat white, mocha and cappuccino.






Figure 12 MarketingDescriptionA graphic of the word ‘Marketing’, surrounded by other marketing-related words, such as ‘Traffic’, ‘Market’, ‘Placement’, ‘Advertising’, ‘SEM’, ‘Online’, ‘Search’, ‘Optimization’, ‘Direct’, ‘Electronic’, ‘Solution’, ‘Commerce’, ‘SEO’, ‘Strategy’, ‘Rank’, ‘Keyword’, ‘Risk’, ‘Website’ and ‘Technology’.






Figure 13 Local sandwich board advertising a takeaway shopDescriptionThe image shows a person carrying a sandwich board on their back. The board advertises pizza slices for $2.00, fresh Indian food and Latin food.






Figure 14 BOGOF sales approach to increase sales temporarilyDescription– The image shows a number of different sales approaches that might be found when purchasing items. For example, sale, buy one get one free, money off.






Figure 15 M-commerce – mobile purchases and payments were approximately 40% of all payments at the end of 2015DescriptionThe image shows a mobile phone with a credit card clipped to the top.






Figure 16 The Open University’s social media siteDescriptionThe image displays a screenshot of a webpage taken from the OU Community website. It discusses Facebook, Twitter, the OU Students Association and YouTube.






Figure 17 Surveys provide valuable feedbackDescriptionThe image shows a person’s hand completing a customer survey. They are about to tick against a negative option for ‘overall satisfaction’.






Figure 18 Social media impact of supplier failing to meet customer expectations (adapted from Grégorie et al., 2015)DescriptionThis figure shows what is likely to happen if a supplier does not deliver what a customer expects. Social media give customers a significant tool that more and more are using when dissatisfied. Suppliers ignore social media at their peril.






Figure 19 Applying your learningDescriptionThe image shows a graphic of a person sitting on a bench, and writing on a piece of paper. Their left hand is pointing to the sky, where a flashing lightbulb is floating above.






Uncaptioned interactive contentTranscriptNARRATOR 1Five steps to improve customer satisfaction. Be genuine. When customers call with complaints or concerns, take the time to treat them like individuals. While calling a customer ma’am or sir is respectful, it doesn’t include a personal touch. Replying, yes, sir, I understand, is polite. Add the customer’s name. Yes, Mr. Smith, I understand. That is much better. Using a customer’s name helps them see you are truly engaged in listening to what they’re saying and interested in solving the issue. Personalising the conversation helps the realisation that the customer is more important to your company than the money. NARRATOR 2Be accountable. Customers face the most aggravation when customer care acts concerned but passes the issue around. Never point a customer to someone else because you don’t know how to handle his problem. Instead, take the time to help fix the problem if possible. If you must refer a customer, find an individual who can resolve their issue amicably. Ensuring your customer achieves a desirable outcome will ensure you create a customer for life. NARRATOR 1Empathise. Listen to your customers. Sometimes people really do need to vent. Always remember, a complaint shouldn’t be taken personally. Learn to acknowledge the customer’s issue and train employees to do the same. It is important that your customer knows that someone understands their concerns. Let them know you understand the way they are feeling and apologise, even if you don’t feel you need to. A sincere apology works wonders in creating happy, loyal customers and confirms your willingness to take responsibility for the customer’s problem. NARRATOR 2Innovate. If you understand the customer’s problem, offer a solution. Never tell the customer what you can’t do. Focus on what you can do to fix the problem. Offer some options. Working to solve your customer’s problem, even if not to the extent they may have liked, helps them feel you care about their business. Focusing on solutions will keep customers coming back, even after they’ve faced a problem with your company. NARRATOR 1Be trustworthy. Sometimes, in an effort to appease a customer, company employees will make promises that are not only impractical, but which can’t be honoured. Don’t make empty promises. It is far better to offer a practical and workable solution which will allow you to rebuild your customer relationship and provide some satisfaction. Meet every situation realistically, and your customer will appreciate the effort. While of 271 5th September 2016




these tips will help you provide quality care to your customers, there will be times when nothing anyone else does will be enough to keep a customer. NARRATOR 2Be genuine. You are accountable. Remember to empathise. Innovate for solutions. Be trustworthy.

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Uncaptioned interactive contentTranscriptAJ LEON:Now, before I conclude, I want to provide a few more examples of people, of small businesses and individuals, that are using the power of community and particularly on social to convert into sales. Because I thought this might be interesting. We'll go back to Instagram, because Instagram is a particular - a lot of companies use it and small businesses use it for fun, highlighting the office, blah, blah, blah. But there are some brands and some small businesses that are using it in interesting ways. It works best for artistic brands or epicurean brands. An example of this, three blocks away from my flat in the Lower East Side in New York City is my favourite restaurant in the whole wide world. It's called Sauce, and the head chef and owner of this restaurant is a dude named Frank Prisinzano. Frank is a prolific Instagram user, prolific. What does he post about? He posts about new recipes that he's trying when he can't go to sleep at 3:00 AM in the morning. He posts about his Italian grandmother and her influence on his life and his cooking and the fact that her chairs and her pots still adorn the halls of Sauce to this day. He talks about his ethos, his trips, his family. He basically tells stories. And a few months ago, he took his customary annual trip to Italy. And on this trip and on these trips, he takes them about every year, he publishes posts about and photos about inspiration that he's garnering, food that he's tasting, chefs that he's meeting, things that he's going to bring back to us in the Lower East Side at Sauce for us to enjoy, straight from the motherland, his motherland, Italy. And on this trip, he also posts about bringing back some fresh white truffles back to Sauce for what he called a special menu. And he told stories about going truffle foraging with - that's Rocco right there-- who is the truffle hunter dog. And truffle farmers will go out with Rocco, and he'll go and sniff up a storm and find these truffles. And Frank went out into the forest and he found truffles in the Alba region. And then he posted about paying 3,200 euros to this farmer to bring back all the truffles that he brought back to the Lower East Side. And he mentioned on Instagram that the truffles would be served on dishes the following week at Sauce by request only - on a private menu, by request only. In other words, none of the truffle dishes would appear on the menu. You kind of had to be part of the community, part of the in-crowd, to even know about it. The following week his Instagram community obviously flocked to Sauce and started posting an enormous amount of photos about the secret menu that they were a part of. of 271 5th September 2016




Now, what happened to Frank and Sauce and his truffles? He sold out in four days. In four days, he sold out of his truffles. And when I spoke to Frank about this at the bar he said, AJ, Instagram ain't just about fun for me. In my world, Instagram converts. Now, another great example is world renowned street artist Shepard Fairey of Obey fame, who I'm sure most of us know. He uses Instagram to sell out of his prints every two to three days, by publishing every two to three days. And you can see them right there. Now, Tumblr is also a very interesting social content channel. Four years ago, a friend of mine, Josh Davis, who I used to - when I was in New York City a lot more often, we were sitting there at our favourite coffee shop, The Bean, and then Josh came up to me. He would always show me on his iPhone 4S, his new iPhone 4S, he's show me all these beautiful photos that he took of the East Village, documenting life in the East Village. You've got to understand, where I come from, it's a crazy place. Now, you have all these big buildings and money is pouring in and all that. But there's all this weirdness and graffiti go on. It's a lovely - it's a lovely place. And Josh took it upon himself to document this for no other reason than he just loved it. And he used his iPhone. He did all the editing on his iPhone. We'd sit there at the bar at The Bean, and every day he showed me this. And after a few days I'm like, you know Josh, not that I want you to extend from this audience of one that you have here, but with two extra clicks you can start sharing that with people online. I think people would dig this, man. I think people would really dig the idea of an East Village iphonographer, documentary photographer, for our neighbourhood. Now today Josh has over 20,000 followers on Tumblr. He's JDX on Tumblr if you want to check him out. His prints - with every shot, every photo that he publishes to Tumblr from his phone - he still, to this day it's all iPhone. All of the edit is on the iPhone. Everything publishes directly to his Tumblog. He only prints three copies of each photo and sells them at an average of $1,000 per piece. And last week he was even invited for his first international exhibition in Tokyo. And this is all through content that he created which was freely available on one platform. Then, of course, there's Facebook. Now, I know dozens, dozens of examples of entrepreneurs. I don't have the time to share them all, but I will share one, like my friend Chelsea who is in North Dakota. She's a limited edition jewellery maker in North Dakota. So she makes these beautiful pieces, typically out of cement and other up-cycled goods - wood, things like that. Beautiful stuff, right? This is just last week. You can see the date right there. Just last week, she posted one photo on her wall of new products that she was trying or that she had produced. And she associated them with letters, and all she did was ask for her community to comment, and the first ones providing the letter of the product that they wanted, she would sell them to them. I mean, they could purchase them, and she would do that until they were sold out. of 271 5th September 2016




Less than 24 hours later, she was sold out. As you can see, my wife Melissa was a little bit too late. 24 hours later, she did it again. Now, Chelsea didn't use this, and I don't have the time to go into this in detail. But I did want to share this with you. Remember when I was saying you live and die by your email list? Now, Facebook provides something additional to us. There's a new marketing effort that they've launched. Any of us can use it. Any small business, large organisation, whatever can use this. It's called a Lookalike marketing, where you basically upload an email list and Facebook finds users who are similar to your community or customer list. This makes it ridiculously, absurdly easy and inexpensive to market to prospects that are even outside of your community on Facebook. So in other words, Chelsea could have been marketing to her own community, and at the same time she could have uploaded the list of emails that she's collected from her community of customers that she has and marketed to people whom she's never met and got her product in front of them for pennies, for pennies. Now, the last channel I'll talk about is Kickstarter. I know somebody talked about this last week. So I'm not going to go into a deep dive about what Kickstarter is. However, I will say this. There is a massive, massive misconception about Kickstarter. Many people around the world still think Kickstarter is a donation platform, some type of donation, like it's a charity platform. Kickstarter founders abhor charity. They don't even allow 501c. They don't allow charities on the platform. It's not at all. Kickstarter represents the rise of a movement called presumerism, where customers buy into the idea of a product before that product ever exists. It allows you to validate your product before it exists, and it gives these early, early customers a discount for being involved. My friend Clay Hebert, who is one of the world's leading experts on crowdfunding theory, he says Kickstarter is just a simple shopping cart with an earliest adopter discount baked in. Now, I've had many, many friends who have launched new businesses on Kickstarter - applications, films, water filtration systems. I have had friends do all to launch real businesses on Kickstarter. And they used it to acquire their presumers or their earliest adopters and to start garnering community. At Misfit, we launched an entire new line of business, Misfit Press, which I've mentioned before, on Kickstarter. I had a publishing deal for my first book from a large publisher. I was about a quarter of the way into this deal. About a quarter of the way into the deal, I'm writing, I'm sending back draughts, and then I started to realise, wait a second. I signed up to write somebody else's book. This isn't me. This book that I'm writing is actually not mine. So I pulled out of the deal and I said, you know what? I can't do this. Why don't we put this on Kickstarter? The publisher offered me a $10,000 advance. If I can get $10,000 from my community, if I have $10,000 worth of business that would want to see me publish this book. And I can do that profitably, I can publish and print profitably as a business, why don't we do it ourselves and see how it goes? of 271 5th September 2016




So we put it on Kickstarter with $10,000. We thought we'd just maybe scrape, scrape out enough customers to buy a book before it's even alive, before it's even published, at $10,000. In four hours - in four hours, we raised $10,000, and by the end of the campaign, I was able to raise $40,000, taking the overage that we could raise, and I leveraged that and decided to invest it into the publishing industry and to invest it into actually becoming an artisan publisher ourselves. So not just one-off book, but why don't we build some more out of this. And now we're on our fifth publication.

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Small business and marketing - Open University · Web viewSmall business and marketing About this...

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