Cmpare and cntrast market segmentatin and niche marketing. Hw wuld a small business wner g abut using market segmentatin and niche marketing t gain cmpetitive advantage? Market segmentatin is a useful business tl t identify new and expanded ways t imprve services and enhance revenues. This tl identifies unique subsets f the ppulatin t target fr specialized services and marketing initiatives. There are many appraches t segmentatin, including primary research, demgraphic (life stage) analysis, financial analysis, prduct purchasing pattern recgnitin and channel usage. ne way a marketer can use segmentatin is fr planning business and marketing strategy. This can rake many frms, including syndicated research samples, primary research and database research.
Hwever, if ne is trying t assess such things as marketplace psitining, cmpetitive psitining r categry cnsumptin, primary research can be used. In this setting, a segmentatin develper uses the imprtance level f attributes such as price, quality, selectin and service t determine cnsumer segments that value these attributes differently. In additin, fr sme analyses, yur cmpany is rated relative t cmpetitrs n these attributes. The segmentatin exercise will define cnsumers with similar imprtance attribute weightings and may als include infrmatin n the cmpetitrs these cnsumers frequent r value. f particular interest are yur cmpany’s relative ratings n the attributes fr each segment, the size f the segment and the ttal industry cnsumptin f each segment. nce this is determined, cmpetitive strategies can be develped t address the needs f specific segments.
A niche market is a fcused, targetable prtin f a market. By definitin, a business that fcuses n a niche market is addressing a need fr a prduct r service that is nt being addressed by mainstream prviders. ne can think f a niche market as a narrwly defined grup f ptential custmers. Why shuld a small business bther t establish a niche market? Because f the great advantage f being alne there; ther small businesses may nt be aware f sme particular niche market, and large businesses will nt want t bther with it. The trick t capitalizing n a niche market is t find r develp a market niche that has custmers wh are accessible, that is grwing fast enugh, and that is nt wned by ne established vendr already. A niche will give all marketing effrts a natural, sharp fcus.
The mre a business specializes, the mre the market will see the value f its services because they speak directly t their unique situatin. Assuming a business niche is large enugh, ne can d quite well by becming a prvider f prducts and services that cannt be fund anywhere else. Many entrepreneurs think that selling t the widest pssible market is the likeliest path t success. They are afraid t pursue a market niche because they fear they will lse business by turning away custmers. Hwever,this ‘take all cmers’ apprach is nt very effective. It is hard t stand ut when the market yur business is in is withut a distinctive set f prspects in mind. ccupying a niche means that a business will nt be cmpeting with many ther similar businesses slely n price.
Because this business will be selling prducts and services that are custmized t the specific needs and predispsitins f a select grup f peple, it can ften charge mre. These prducts and services serve a market that cannt easily find alternatives. Explain the market research prcess frm a small business wners perspective when he r she is trying t gain cmpetitive advantage. Marketing is the prcess f creating custmers fr yur services in enugh quantity and in a timely fashin t generate prfits and be successful. The prblem is that many small businesses d nt understand the basic principles f marketing, r smehw feel that cannt affrd the “luxury” f marketing and advertising. Yet, n matter hw gd yur service is, hw extensive yur referral base r hw great yur lcatin, t remain successful against yur cmpetitrs yu must develp a marketing strategy. Marketing is an investment in the future f yur business.
There are three cmpnents t develping a marketing strategy: * Segmentatin r “Wh can I sell my services t?” * Targeting r “Wh am I ging t sell my services t?” * Psitining r “Hw am I ging t sell my services?” By answering these “STP” (segmentatin, targeting, psitining) questins yu can develp a basic marketing strategy. The first step in develping a marketing strategy is segmentatin. In rder t understand wh ne can market yur services t, he/she must understand and analyze his/her industry in yur area f practice. The secnd cmpnent f the marketing strategy, targeting, defines yur cmpetitive scpe. Wh will yu sell yur services t? The final, and mst critical, step is psitining and cmmunicating marketing strategy t emplyees and custmers. As the saying ges, “First impressins last a lifetime.” ne must cncentrate n his/her first impressin encunter pints and be sure they cmmunicate yur strategy effectively.
These encunter pints include: * Wrd f muth * Telephne cntact * Emplyee cntact * External and internal signage * External grunds * The external and internal facility * Advertising * Web sites Explain the imprtance f knwing the legal requirements f an area befre attempting t pen a small business. T perate a business legally ne needs t meet all the laws fr perating a business in yur cuntry and lcal cmmunity. In the United States that means the laws f the federal gvernment, state gvernments f every state in which yu d business, and in many lcales, even city and/r cunty laws gverning business peratin. Fr the U.S. gvernment, mst businesses are ging t need an Emplyer Identificatin Number even if they dn’t have emplyees. The Internal Revenue Service (IRS) prvides clearly written dcumentatin f what is required in terms f reprting. ther agencies may als have legal requirements.
If yu a business has emplyees, it will als have labr laws that will need t be fllwed. The Small Business Administratin perates lcal ffices in every state. These ffices can be a great surce f infrmatin abut ther lcal regulatins. Nt nly are there laws and regulatins gverning the actual registratin f the business and the business name, but there may als be licenses and permits needed t perate certain types f businesses. Fr instance, a restaurant may need health department r liqur licensing, a hair stylist may need t be licensed within their prfessin, r a child care service may need t have special permits frm scial service r educatinal agencies. A cmpany wner may want t trademark their business name and/r lg.
It is wrth taking a lk at patents, cpyrights, and trademarks t find ut hw t prtect that valuable name yu wrked s hard t chse. Business wner needs t carefully chse an integral part f his/her legal structure – what kind f business des she/he wants t have. The chices are a sle prprietrship, a business partnership, a limited liability cmpany (LLC) r a crpratin. The legal structure is nt permanently binding, but there can be cmplicatins in changing s cnsider it carefully. What factrs shuld be cnsidered when a small business wner decides t advertise? Small business advertising is a science and an art. Cmpanies ften miss the fundamentals f advertising. Regardless f the size f a business an understanding f the laws f advertising can reap huge rewards. Fr mst small businesses, big advertising campaigns are just t expensive. n the whle they are usually used by large rganisatins, and aimed at a very large market.
Small businesses, by nature, have a small market and need t tailr their marketing and advertising accrdingly. Ideally, small business advertising shuld t be practical by nature and easy t implement. T be effective it shuld reach business target market its best custmers. S the first thing ne shuld d is lk at existing advertising and cmpare it with the custmer prfiles. It is wrth cnsidering whether business ads have been psitined in the places where best custmers will see them. There is n pint in wasting mney in advertising in places where it will be ignred r nt seen by the peple that need t be attracted. Business wners shuld try t identify sme cmmn factr amng his/her custmers and then see if there is any particular publicatin r venue that he/she can use t place ads.
Bibliography: Understanding segmentation: A users’ tutorial on working with strategic and tactical segments – Database Marketing Column; Direct, March 1, 2002 by Brad Rukstales Niche Marketingthe Affiliate Way – Industry Trend or Event. Home Office Computing, March, 2001 by Lisa Roberts Personal Appearance – small business advertising and marketing tips – Brief Article. Entrepreneur, April, 2001 by Jerry Fisher http://www.smallbusinessnotes.com/.