Marketing Management In

Small Scale Industries(SSI)

The objective of all business enterprises is to satisfy the needs and wants of the society. Marketing is, therefore, a basic function of all business firms.

Marketing may be narrowly defined as a process by which goods and services are exchanged and values determined in terms of money prices.

Importance of Marketing in Small Business

It enables the entrepreneurs to improve the quality of their goods and

services.

Marketing helps in improving the standard of living of the people by

offering a wide variety of goods and services with freedom of choice, and by

treating the customer as the most important person.

Marketing generates employment both in production and in distribution

areas.

Marketing makes or breaks a small enterprise. An enterprise grows,

stagnates, or perishes with the success or failure, as the case may be, of

marketing. “Nirma” is an appropriate example of the success of small scale

enterprise.

Specific Function Activities InvolvedMarketing Information and Research

Economic, business, trade, industry, consumer, user, product, sales and advertising research and analysis. Information handling and data processing, Marketing operation research and Competitive intelligence.

Product Planning Determining and developing the company’s product mix. Matching the products’ specifications, packaging, pricing, performance and servicing to customer needs through product and services improvements and new product development.

Sales and distribution Field Selling, Selection of distribution Channels, Warehousing, Transport, Sales Analysis, Sales reporting, Sales forecasting, Sales budget and quotas, merchandising and Sales communications.

Advertising and Promotions

Advertising to the customer or user in all media (press, television, cinema, radio, outdoor posters, etc.)

The Principal Marketing Functions

Steps involved in conducting the market research are:

1.Formulating Objective

2.Research Design

(a)Exploratory Research Design

(b)Descriptive Research Design

(c)A Casual Research

3.Data Collection and Tabulation

STP Approach

Segmentation: Any business venture has limited resources and hence it cannot satisfy the needs and wants of all the customers. It is for this reason that segments are drawn. Segmentation is the process of dividing the market or customers into similar characteristics or behaviour. There are number if variables in which markets can be segmented:

Demographic Segmentation

Psychographic Segmentation

Geographic Segmentation

Behavioural Segmentation

Market Targeting is the process of evaluating various segments and identifying the

number and type of segments that the business venture would target. The process of market

targeting includes the following steps:

1. Market Evaluation: It is a process of evaluating or assessing all the segments. This

assessment is done on the following criteria:

₸ Assessment of the size of each segment

₸ Assessment of segment growth

₸ Companies’ strengths and weakness to suffice the needs of the segment

₸ Potential opportunities and threats from the competitors, substitutes, buyers,

suppliers, government

2. Target Market Selection: After the target market evaluation is complete the

company has to decide which segments and how many segments it would target. It

would depend on several factors like economies of scale, profitability, growth,

size, lesser risk of loss, entrepreneurial competency. There are five patterns

available for selecting the target market:

▲Single Segment Concentration

▲Selective Specialization

▲Product Specialization

▲Market Specialization

Market Positioning: After segmentation of the population, selecting the attractive target markets is the next in positioning the product or service.

Market positioning can be defined as the act of projecting the company’s product or service in such a way that it appears attractive to them. It is an image making exercise which helps the company to portray to the targeted segment in such a way that it appears attractive to the customers.

The following variables should b assured for positioning the product or service:1) What image the company wants to project2) The pricing strategy3) The packaging of the product4) How competitors project themselves5) The type of product6) Product Lifecycle

Elements of

Marketing Mix

The strategies formed are finally implemented and regular monitoring and

evaluation is required, so that the strategies yielding positive results are further

strengthened and strategies not giving good results are diluted. It is also important

to periodically review the marketing strategies considering the dynamic nature of

external environment and hence the vulnerability of the internal environment.

Increasing competition from within the small scale sector as well as from large

industries with established brand names and marketing setup

Consumer awareness, even in rural and semi urban areas, for quality goods

The need to set up distribution networks for reaching out widely dispersed markets

Inability of the SSI units to exploit the export markets

Implementing, Monitoring and Review

Some of the factors which contribute to the marketing problems of the small scale industry in recent days are:

S. No. Marketing Problems Percentage1 Low Quality 71.05%

2 Price Fixation 60.03%

3 Improper Positioning 42.11%

4 Improper Segmentation 50%

5 High Cost of Marketing Personnel

55.26%

6 Sales Promotion 60.53%

7 Distribution Channels 73.68%

8 Non Availability of Packing Material

65.79%

9 Competitors 89.47%

(SOURCE: Asian Journal of Marketing & Management Research Vol.1 Issue 1, September 2012)

Marketing Problems Faced