U.S. Small Business Administration                          MT-2



              MARKETING FOR SMALL BUSINESS: AN OVERVIEW


                         Marketing Series

_________________________________________________________________

This publication was edited by SBA staff members. Contributors to
the text were James L. Brock, College of Business, Montana State
University, Bozeman, Montana; Keith K. Cox and James E. Stafford,
Professors of Marketing, University of Houston, Houston, Texas; 
and Art Palmer, Doctoral Student, University of Houston, Houston,
Texas.

While we consider the contents of this publication to be of 
general merit, its sponsorship by the U.S. Small Business
Administration does not necessarily constitute an endorsement of
the views and opinions of the authors or the products and 
services of the companies with which they are affiliated.

All of SBA's programs and services are extended to the public on 
a nondiscriminatory basis.
_________________________________________________________________

                     TABLE OF CONTENTS

INTRODUCTION

THE MARKETING CONCEPT

MARKET RESEARCH

MARKETING STRATEGY

MANAGING THE MARKET MIX

MARKETING PERFORMANCE

BIBLIOGRAPHY
     U.S. Government Publications
     U.S. Small Business Administration
     Bureau of the Census
     Other Agencies

APPENDIX: INFORMATION RESOURCES
_________________________________________________________________

INTRODUCTION

One of the greatest needs of managers of small businesses is to
understand and develop marketing programs for their products and
services. Small Business success is based on the ability to build
a growing body of satisfied customers. Modern marketing programs
are built around the "marketing concept" and performance, which
directs managers to focus their efforts on identifying, 
satisfying and following up the customer's needs: all at a 
profit.

The Marketing Concept

The marketing concept rests on the importance of customers to a
firm and states that:

   1. ALL company policies and activities should be aimed at 
      satisfying customer needs, and

   2. PROFITABLE sales volume is a better company goal than
      maximum sales volume.

To use the marketing concept, a small business should:

   *  Determine the needs of their customers (Market Research);

   *  Analyze their competitive advantages (Market Strategy);

   *  Select specific markets to serve (Target Marketing); and

   *  Determine how to satisfy those needs (Market Mix).

Market Research

In order to manage the marketing functions successfully, good
information about the market is necessary.  Frequently, a small
market research program, based on a questionnaire given to 
present customers and/or prospective customers, can disclose
problems and areas of dissatisfaction that can be easily 
remedied, or new products or services that could be offered
successfully.


Market research should also encompass identifying trends that may
affect sales and profitability levels. Population shifts, legal
developments, and the local economic situation should be 
monitored to enable early identification of problems and
opportunities. Competitor activity also should be monitored.
Competitors may be entering or leaving the market, for example. 
It is also very useful to know what your competitors' strategies
are (i.e., how they compete).

Marketing Strategy

Marketing strategy a\encompasses identifying customer groups
(Target Markets), which a small business can serve better than 
its target competitors, and tailoring its product offerings,
prices, distribution, promotional efforts and services towards 
that particular market segment (Managing the Market Mix). 
Ideally,  the strategy should try to address customer needs which
currently are not being met in the market place and which 
represent adequate potential size and profitability. A good
strategy implies that a small business cannot be all things to 
all people and must analyze its market and its own capabilities 
so as to focus on a target market it can serve best.

Target Marketing.

Owners of small businesses have limited resources to spend on
marketing activities. Concentrating their marketing efforts on 
one or a few key market segments is the basis of target 
marketing. The major ways to segment a market are:

 1.  Geographical segmentation -- specializing in serving the 
     needs of customers in a particular geographical area (for
     example, a neighborhood convenience store may send
     advertisements only to people living within one-half mile of
     the store).

 2.  Customer segmentation -- identifying and promoting to those
     groups of people most likely to buy the product. In other 
     words, selling to the heavy users before trying to develop 
     new users.

Managing the Market Mix

There are g\four key marketing decision areas is a marketing
program. They are

   *  Products and Services,

   *  Promotion

   * Distribution and 

   * Pricing.

The marketing mix is used to describe how owner-managers combine
these four areas into an overall marketing program.

Products and Services -- Effective product strategies for a small
business may include concentrating on a narrow product line,
developing a highly specialized product or service or providing a
product-service package containing an unusual amount of service.

Promotion -- This marketing decision area includes advertising,
salesmanship and other promotional activities.  In general, high
quality salesmanship is a must for small businesses because of 
their limited ability to advertise heavily. Good Yellow Page
advertising is a must for small retailers.  Direct mail is an
effective, low-cost medium of advertising available to small
business.

Price -- Determining price levels and/or pricing policies
(including credit policy) is the major factor affecting total
revenue.  Generally, higher prices mean lower volume and vice-
versa; however, small businesses can often command higher prices
because of the personalized service they can offer.

Distribution -- The manufacturer and wholesaler must decide how 
to distribute their products. Working through established
distributors or manufacturers' agents generally is most feasible
for small manufacturers. Small retailers should consider cost and
traffic flow as two major factors in location site selection,
especially since advertising and rent can be reciprocal.  In 
other words, low-cost, low-traffic location means you must spend
more on advertising to build traffic.

The nature of the product/service also is important in locational
decisions. If purchases are made largely on impulse (e.g., 
flavored popcorn), the high traffic and visibility are critical. 
On the other hand, location is less a concern for products/
services that customers are willing to go out of their way to 
find (e.g. restaurant supplies). The recent availability of 
highly segmented mailing lists (purchased from list brokers,
magazines, or other companies) has enabled small businesses to
operate anywhere -- and serve national or international markets.

Marketing Performance

After marketing program decisions are made, owner-managers need 
to evaluate how well decisions have turned out. Standards of
performance need to be set up so results can be evaluated against
them. Sound data on industry norms and past performance provide 
the basis for comparing against present performance.

Owner-managers should audit their company's performance at least
quarterly. Lists of things to look for and of danger signals are
given in some of the books recommended in this Bibliography.

The key questions to ask are:

1.  Is the company doing all it can to be customer-oriented?

2.  Do the employees make sure the customer's needs are truly 
    satisfied and leave them with the feeling that they would
    enjoy coming back?

3.  Is it easy for the customer to find what he or she wants and
    at a competitive price?
_________________________________________________________________

BIBLIOGRAPHY

The information presented here is necessarily selective and no
slight is intended toward material not mentioned. Publishers are
invited to notify the SBA of relevant publications and other
sources of information for possible inclusion in future editions.
This bibliography may be reprinted but not used to indicate
approval or disapproval by the SBA of any private organization,
product or service.

U.S. Government Publications

The publications cited in this section are books and pamphlets
issued by federal agencies and listed under the issuing agency.
Some are free; others cost a nominal fee. GPO (Government
Printing Office) publications can be ordered from the
Superintendent of Documents, U.S. Government Printing Office,
Washington, DC 20402. When ordering a GPO publication, give the
title and series number of the publication and the name of the
agency. You can also order by calling (202) 783-3238. Contact GPO
for current prices.

Publications should be requested by title and any identifying
number. Most libraries maintain listings of currently available
federal publications. Some keep selected government publications
for ready reference through the Federal Depository Library
System.

U.S. Small Business Administration
Washington, DC 20416

SBA issues a wide range of management and technical publications
designed to help owner-managers and prospective owners of small
businesses. For general information about the SBA, its policies
and assistance programs, contact your nearest SBA office.

The Small Business Directory, a listing of currently available
publications and videotapes, can be obtained free from SBA, P.O.
Box 15434, Fort Worth, TX 76119, or from any of SBA's field
offices. The directory contains a form that can be used to order
a particular title.

Bureau of the Census
Department of Commerce Washington, DC 20233
(Contact the Public Information Office for a more complete
listing of publications.)

Catalog of United State Census Publications. Published monthly
with quarterly and annual cumulations. A guide to census data and
reports. This catalog contains descriptive lists of publications,
data files and special tabulations.

Census of Business. Compiled every five years (years ending in 2
and 7). Organized in the following three units:

   Census of Retail Trade (1987). This report presents statistics
   for more than a hundred different types of retail 
   establishments by state, standard metropolitan statistical 
   area (SMSA), county and community (population over 2,500). It
   includes data on the number of outlets, total sales, 
   employment and payroll. Updated each month by Monthly Retail
   Trade.

   Census of Wholesale Trade (1987). Statistics for more than 150
   types of wholesaler categories. The data detail the number of
   establishments, payroll, warehouse space, expenses, end-of-
   year inventories, legal form of organization and payroll.
   Updated each month by Monthly Wholesale Trade.

   Census of Selected Services (1987). Provides statistics 
   similar to those reported by the Census of Retail Trade for
   retail service organizations such as auto repair centers and
   hotels. Does not include information on real estate, insurance
   or the professions. Updated monthly by Monthly Selected 
   Service Receipts.

Census of Manufacturers (1987). Compiled every five years (years
ending in 2 and 7). Reports on 450 different classes of 
manufacturing industries. Data for each industry include
information on capital expenditures, value added, number of
establishments, employment data, material costs, assets, rent and
inventories. Updated yearly by the Annual Survey of
Manufacturers.

Census of Population (1990). Compiled every ten years. Presents
detailed data on population characteristics of states, counties,
SMSAs and census tracts. Demographics data reported include age,
sex, race, marital status, family composition, employment income,
level of education and occupation. Updated annually by the 
Current Population Report.

Statistical Abstract of the United States. Published annually.
This is a useful source for finding current and historical
statistics about various aspects of American life. Contents
include statistics on income, prices, education, population, law
enforcement, environmental conditions, local government, labor
force, manufacturing and many other topics.

State and Metropolitan Area Data Book. A Statistical Abstract
supplement (1986). Presents a variety of information on states
and metropolitan areas in the United States, on subjects such as
area, population, housing, income, manufacturers, retail trade
and wholesale trade.

County and City Data Book. Published every five years to
supplement the Statistical Abstract. Contains 144 statistical
items for each county and 148 items for cities with a population
of 25,000 or more. Data is organized by region, division, state
and SMSA for income, population, education, employment, housing,
banking, manufacturing, capital expenditures, retail and
wholesale sales, and other factors.

County Business Patterns. Annual. Contains a summary of data on
number and type (by SIC number) of business establishments as
well as their employment and taxable payroll. Data are presented
by industry and county.

Other Agencies

Measuring Markets: A Guide to the Use of Federal and State
Statistical Data. GPO. Provides federal and state government data
on population, income, employment, sales and selected taxes.
Explains how to interpret the data to measure markets and
evaluate opportunities.

Selected Publications to Aid Business and Industry. Listing of
federal statistical sources useful to business and industry.
Statistics of Income. Annual. Published by the Internal Revenue
Service of the Treasury Department. This publication consists of
data collected from tax returns filed by corporations, sole
proprietorships and partnerships, and individuals.

State Statistical Abstract. Every state publishes a statistical
abstract, almanac or economic data book with statistics for the
state, its counties and cities. A complete list of these
abstracts is in the back of each volume of the Statistical
Abstract and Measuring Markets.

General Marketing Books

Charles E. Merrill Publishing Co.
Columbus, OH  43216

Direct Marketing, 1986, Katzenstein, Herbert and William S. Sachs

Goodyear Publishing Company
1515 Sunset Boulevard
Pacific Palisades CA  9272

Marketing Principles.  Enis, Ben M.

Houghton Mifflin Company
1 Beacon Street
Boston MA 02107

Marketing: Basic Concepts and Decisions. Pride, William M. and O.
C. Ferrell

Irwin, Richard D.
1818 Ridge Road
Homewood, IL 60430

Basic Marketing: A Managerial Approach. McCarthy, E. Jerome and
William D. Peaucreault Jr.

Prentice Hall, Inc.
Englewood Cliffs, NH  07602

Marketing Management: Analysis Planning and Control. Kotler, 
Philip

Small Business Books

Business Publications, Inc.
4347 S. Hampton Rd., Suite 210 
Dallas TX  75224

Small Business Management Principles. 1985. Sondeno, Stanley R.

Successful Small Business Management. Tate, Curtis E., L.C.
Megginson, C.R. Scott and L.R. Trueblood.

Houghton Mifflin Company
1 Beacon Street
Boston MA  02107

Small Business Management: A Guide to Entrepreneurship. 
Siropolis, Nicholas C.

McGraw-Hill Book Company
1221 Ave. of the Americas
New York NY  10036

Small Business Management Fundamentals. Steinhoff, Dan.

Wadsworth Publishing Company
10 Davis Drive
Belmont Ca  94002

Small Business Management: Essentials of Entrepreneurship. Klatt,
Lawrence A.

Magazines and Journals

The following magazines and journals publish many articles in the
marketing area that can be useful for business people.

Advertising Age.  Weekly. Crain Communications, 740 Rush St.,
Chicago IL  60611.  Weekly news of advertising agencies, 
campaigns and current issues in advertising.

Business Week.  Weekly. McGraw-Hill, 1211 Avenue of the Americas,
New York, NY  10020. General magazine for businesspeople. 
Frequent articles are carried about practical marketing decisions
in a variety of industrial situations.

Industrial Marketing. Monthly. Crain Communications, 740 Rush 
St., Chicago IL  60611. Specialized magazine for industrial
advertising situations. Frequently publishes for various
industries.

Journal of Retailing. Quarterly. New York University, 202 Tisch
Hall, Washington Square, New York, NY 10003. Publishes articles 
on various retailing topics, as well as book reviews and research
studies.

Modern Packaging. Monthly McGraw-Hill, 1221 Avenue of the 
Americas, New York 10020. Presents articles on annual packaging
trends as well as new packaging developments.

Progressive Grocer. Monthly. The Butterick Division, American Can
Company, 708 Third Avenue, New York, NY 10017. Describes current
merchandising trends in retail food stores, and issues an annual
report on the grocery industry each year.

Sales and Marketing Management. Semimonthly. Sales and Marketing
Management, Inc., 633 Third Ave., New York, NY 10017. Many 
articles address sales management problems.  Subscription 
includes the annual "Survey of Buying Power" which estimates 
buying power in the United States based upon population, Income 
and retail sales.

Marketing Associations

Many small businesspeople interested in marketing activities 
should be aware of the following associations. For a more
exhaustive list of associations, see the Encyclopedia of American
Associations, available at most libraries or universities.

American Advertising Federation, 1225 Connecticut Ave., NW,
Washington, D>C>  20036. Membership comprises people in 
advertising agencies, media, and advertising management, who seek
to further the understanding of advertising.

American Marketing Association. 222 S. Riverside Plaza, Chicago 
IL 60606. Members generally come from marketing management,
researchers and educators.  The principal objectives are to
disseminate knowledge about marketing and to foster additional
research in the marketing discipline.

National Association of Purchasing Management. 11 Park Place, New
York NY 10017. Primarily composed of purchasing agents and other
types of buyers who are interested in the dissemination of
information about efficient purchasing management.

Sales and Marketing Executives International. 380 Lexington Ave.,
New York NY 10017. One of the largest marketing associations, 
with members primarily from sales and marketing management. Holds
frequent seminars, workshops and clinics throughout the United
States.
_________________________________________________________________

APPENDIX: INFORMATION RESOURCES

U.S. Small Business Administration (SBA)

The SBA offers an extensive selection of information on most
business management topics, from how to start a business to
exporting your products.

SBA has offices throughout the country. Consult the U.S. 
Government section in your telephone directory for the office
nearest you. SBA offers a number of programs and services,
including training and educational programs, counseling services,
financial programs and contract assistance. Ask about

     *     SCORE: Counselors to Americas Small Business, a 
           national organization sponsored by SBA of over 11,000
           volunteer business executives who provide free
           counseling, workshops and seminars to prospective and
           existing small business people.  Free online counseling
           and training at www.score.org. 

     *     Small Business Development Centers (SBDCs), sponsored
           by the SBA in partnership with state governments, the
           educational community and the private sector. They
           provide assistance, counseling and training to 
           prospective and existing business people.

     *     Womens Business Centers (WBCs), sponsored by the SBA  
           in partnership with local non-government organizations
           across the nation. Centers are geared specifically to 
           provide training for women in finance, management,
           marketing, procurement and the Internet.

For more information about SBA business development programs and
services call the SBA Small Business Answer Desk at 1-800-U-ASK-
SBA (827-5722) or visit our website, www.sba.gov. 

Other U.S. Government Resources

Many publications on business management and other related topics
are available from the Government Printing Office (GPO). GPO
bookstores are located in 24 major cities and are listed in the
Yellow Pages under the bookstore heading. Find a Catalog of
Government Publications at http://catalog.gpo.gov/F 

Many federal agencies offer Websites and publications of interest 
to small businesses. There is a nominal fee for some, but most 
are free. Below is a selected list of government agencies that 
provide publications and other services targeted to small 
businesses. To get their publications, contact the regional 
offices listed in the telephone directory or write to the 
addresses below:

Federal Citizen Information Center (FCIC)
Http://www.pueblo.gsa.gov 
1-800-333-4636
The CIO offers a consumer information catalog of federal
publications.

Consumer Product Safety Commission (CPSC)
Publications Request
Washington, DC 20207
http://www.cpsc.gov/cpscpub/pubs/pub_idx.html 
The CPSC offers guidelines for product safety requirements.

U.S. Department of Agriculture (USDA)
12th Street and Independence Avenue, SW
Washington, DC 20250
http://www.usda.gov 
The USDA offers publications on selling to the USDA. Publications
and programs on entrepreneurship are also available through 
county extension offices nationwide.

U.S. Department of Commerce (DOC)
Office of Business Liaison
14th Street and Constitution Avenue, NW
Washington, DC 20230
http://www.osec.doc.gov/obl/ 
DOC's Business Liaison Center provides listings of business
opportunities available in the federal government. This service
also will refer businesses to different programs and services in
the DOC and other federal agencies.

U.S. Department of Health and Human Services (HHS)
Substance Abuse and Mental Health Services Administration
1 Choke Cherry Road
Rockville, MD 20857
http://www.workplace.samhsa.gov 
Helpline: 1-800-workplace. Provides information on Employee
Assistance Programs Drug, Alcohol and other Substance Abuse.

U.S. Department of Labor (DOL)
Employment Standards Administration
200 Constitution Avenue, NW
Washington, DC 20210
The DOL offers publications on compliance with labor laws.

U.S. Department of Treasury
Internal Revenue Service (IRS)
1500 Pennsylvania Avenue NW
Washington DC 20230
http://www.irs.gov/business/index.html 
The IRS offers information on tax requirements for small
businesses.

U.S. Environmental Protection Agency (EPA)
Small Business Ombudsman
1200 Pennsylvania Avenue NW
Washington, DC 20480
http://epa.gov/sbo
Hotline: 1-800-368-5888
The EPA offers more than 100 publications designed to help small
businesses understand how they can comply with EPA regulations.

U.S. Food and Drug Administration (FDA)
5600 Fishers Lane
Rockville MD 20857-0001
http://www.fda.gov
Hotline: 1-888-463-6332
The FDA offers information on packaging and labeling requirements
for food and food-related products.

For More Information

A librarian can help you locate the specific information you need
in reference books. Most libraries have a variety of directories,
indexes and encyclopedias that cover many business topics. They
also have other resources, such as

     *     Trade association information
           Ask the librarian to show you a directory of trade
           associations. Associations provide a valuable network
           of resources to their members through publications 
           and services such as newsletters, conferences and
           seminars.

     *     Books
           Many guidebooks, textbooks and manuals on small
           business are published annually. To find the names of
           books not in your local library check Books In Print,
           a directory of books currently available from
           publishers.

     *     Magazine and newspaper articles
           Business and professional magazines provide 
           information that is more current than that found in
           books and textbooks. There are a number of indexes to
           help you find specific articles in periodicals.

      *    Internet Search Engines

In addition to books and magazines, many libraries offer free
workshops, free access to computers and the Internet, lend skill-building tapes and have catalogues and brochures describing continuing education opportunities.
