BSBSMB403A Market the small business Prerequisite Research. Activity 1 Create a promotional portfolio

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1 BSBSMB403A Market the small business Prerequisite Research Before starting the activities for this unit you should do some research. This is best done when you are not logged into the e-learning application because it will require you to spend time on other internet sites. This resource explains what information you should gather and where you should look for it. Activity 1 Create a promotional portfolio Create a promotional portfolio of the following for your business. Advertising In most cases, your business will have spent money on advertising to some extent. Collect examples of all current and past advertising pieces such as: newspaper advertisements magazine articles radio or TV campaigns brochures business cards ambient advertising material: items with the business name on them, e.g. pens, cups, t-shirts, stubby holders, key rings, etc. For the items that can t be filed such as cups, t-shirts and radio announcements, write a short note outlining (if the information is available): the expected results/outcomes of the advertising campaigns: o o o when they happened the cost the result of the campaign. Publicity Your business may have, at some point, sponsored a community event, written a press release or had an editorial written by the local newspaper. Collect these (if they exist) and place them in your promotional portfolio. Sales promotions Some forms of sales promotions that are commonly used by small business are: attendance at trade shows usually exhibiting good and services volume discounts the more they buy the cheaper the price Page 1

2 contests many butchers have used a weekly prize draw for customers very effectively special events weekend retreats for customers, product information seminars, industry specific short-course training sessions, etc. coupons discounts on products over a certain spend, e.g. spend $30 and get a fuel discount at participating outlets, etc. loyalty programs can be frequent flyer points, buy ten cups of coffee get one free, etc. If your business has utilised any of these promotional tools, collect examples or write a brief description and place it in your promotional portfolio. Activity 2 Distribution channels Consider the following image: Identify the distribution channel that best describes the one your business uses, and then write a brief description of each level. Page 2

3 Now answer the following question with regard to your business and its distribution channel. What company is responsible for organising and paying for transport? At what point does the product reach your customer? Are there any groups of customers you can identify that may not have access to your product/service due to your distribution channel? Who arranges transport? Who arranges warehousing? Who pays for transport? How much? Are there any volume discounts to distributors? How much? Activity 3 Competitor analysis Create a list of your direct competition by identifying those competitors who are closest to your in business by: size number of employees sales volume of sales or turnover geographic location nearest to your business or in your sales region product width have a similar range of products as your business. Pick the two closest competitors and complete as much detail as you can on the following competitor analysis forms. Page 3

4 Note: it is not expected that you will be able to fill in all the fields on the form, but it is a good indicator of how well you understand your competition. Competitor 1 analysis Prepared by: Date: Competitor: Product/service: Location/s: Years in business: Number of employees: Dollar sales: Unit sales: Financial strength: Players: (include their ages, experience in this business, training or education, business strengths and weaknesses and any other pertinent information.) Managing director/owner: Key employees: The competition s marketing strategy: Key customers: Major products or services: Quality: Image: Pricing: Advertising themes: Promotion/public relations efforts: Significant changes (new people, products, etc.): How this competitor competes with you: Major strengths: Major weaknesses: Page 4

5 Competitor 2 analysis Prepared by: Date: Competitor: Product/service: Location/s: Years in business: Number of employees: Dollar sales: Unit sales: Financial strength: Players: (include their ages, experience in this business, training or education, business strengths and weaknesses and any other pertinent information.) Managing Director/owner Key employees: The competition s marketing strategy: Key customers: Major products or services: Quality: Image: Pricing: Advertising themes: Promotion/public relations efforts: Significant changes (new people, products, etc): How this competitor competes with you: Major strengths Major weaknesses Page 5

6 Activity 4 Competitor analysis summary List all the major strengths and weaknesses of your two competitors (what they do well and what areas are they weak in, e.g. customer service, after hours, flexibility in pricing, communication, etc.): Competitor 1 Major strengths Major weaknesses Competitor 2 Major strengths Major weaknesses Page 6

7 Activity 5 Who are your customers? 1. Describe your best customers. Age Sex Income level Occupation Type of business: (for industrial or business customers) Size 2. Where do they come from? (Check one) local regional national international. 3. What do they buy? Products Services What problems do your products solve? (Benefits) 4. How often do they buy? (Check one) daily weekly monthly sporadically 5. How much do they buy? Unit/Dollar spend Page 7

8 Average total contribution 6. How do they pay? (Check all that apply) on account EFTPOS cash cheque 7. How did they learn about your business? (Check all that apply) advertising: newspaper, TV, Yellow Pages location (passing by) word of mouth 8. What do they like about your business, products or service? 9. What would they like to see your business offer that it doesn t already? 10. How big is your market? Geographically Population Potential customers 11. What is your share of the market? 12. How do you want your market to perceive your Page 8

9 business? 13. Have they used your competitors products/services in the past? 14. Are they aware of all the products and services your business offers? 15. Does the business have regular contact/interaction with these customers? 1. Describe your second-best customers. Age Sex Income level Occupation Type of business: (for industrial or business customers) Size 2. Where do they come from? (Check one) local regional national international. 3. What do they buy? Products Services What problems do your products solve? (Benefits) Page 9

10 4. How often do they buy? (Check one) daily weekly monthly sporadically 5. How much do they buy? Unit/Dollar spend Average total contribution 6. How do they pay? (Check all that apply) on account EFTPOS cash cheque 7. How did they learn about your business? (Check all that apply) advertising: newspaper, TV, Yellow Pages location (passing by) word of mouth 8. What do they like about your business, products or service? 9. What would they like to see your business offer that it doesn t already? Page 10

11 10. How big is your market? Geographically Population Potential customers 11. What is your share of the market? 12. How do you want your market to perceive your business? 13. Have they used your competitors products/services in the past? 14. Are they aware of all the products and services your business offers? 15. Does the business have regular contact/interaction with these customers? 1. Describe your third-best customers. Age Sex Income level Occupation Type of business: (for industrial or business customers) Size Page 11

12 2. Where do they come from? (Check one) local regional national international. 3. What do they buy? Products Services What problems do your products solve? (Benefits) 4. How often do they buy? (Check one) daily weekly monthly sporadically 5. How much do they buy? Unit/Dollar spend Average total contribution 6. How do they pay? (Check all that apply) on account EFTPOS cash cheque Page 12

13 7. How did they learn about your business? (Check all that apply) advertising: newspaper, TV, Yellow Pages location (passing by) word of mouth 8. What do they like about your business, products or service? 9. What would they like to see your business offer that it doesn t already? 10. How big is your market? Geographically Population Potential customers 11. What is your share of the market? 12. How do you want your market to perceive your business? 13. Have they used your competitors products/services in the past? 14. Are they aware of all the products and services your business offers? 15. Does the business have regular contact/interaction with these customers? Page 13

14 Glossary Term Definition Vision statement A statement of what the business does and its aims. Fixed costs The bills that have to be paid whether you sell one product or a million products;: bills such as rent, loan repayments, insurance and interest, etc. These costs do not change as production levels go up or down. Variable costs A cost of labour, material or overhead that changes according to the change in the volume of production. Contribution margin The contribution that each product/service unit makes to offset the fixed costs is regarded as its contribution margin. The sales mix A method used to describe the ratio of the amount of products sold of one type (A) to another type (B). Opportunity cost The cost you incur when you chose to produce one product (A) but not another (B), i.e. you lose the opportunity to produce B. The marketing mix /4Ps Product Price Place (distribution) Promotion. SWOT analysis Strengths Weaknesses Opportunities and Threats. The analysis begins by looking at the internal strengths and weaknesses of the business and concludes with identifying the external opportunities and threats that exist in the marketplace. Market segments Slices of your market. Groups of individual customers that have particular needs and behave in a particular way when influenced by marketing stimuli (the marketing mix, product, price, place, promotion). Primary data Information you (or a colleague) collect specifically for your business purposes (e.g. discussions sales staff have with Page 14

15 customers, financial or sales figures, etc.). Secondary data Information that is collected by another organisation for their own purposes and is in the public domain (e.g. information found on websites, Australian Bureau of Statistics or industry specific magazines, etc.). SLEPT analysis Analysis of Social/cultural, Legal, Economic, Political and Technological macro-environmental forces in the marketplace. Total product concept Comprises two types of product attributes: benefits the way in which the product improves the quality of life (the part of the product that solves a problem). features the aspects of a product or service which are designed to attract the purchaser (i.e. the extra bells and whistles, packaging, colour, construction materials etc.). Ok, you are now ready to begin the unit BSBSMB403A Market the small business. Keep this document nearby you ll need to refer to your notes during the activity. Page 15