ED Term Paper Final

8/4/2019 ED Term Paper Final

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A ReportOn

Production & Marketing strategy of small Business

Submitted ByGroup of

SL. No. Name ID

01. Md.Anisul Islam 10335174

02. Syed Mazba Uddin 10335135

03. Shiuly Sarkar 1033517504. Md. Arifur Rahman 10335176

05. Mahtabul Alam 10335173

42nd Batch

School of Business

MBA programUniversity of Information Technology & Sciences

Chittagong

This term paper is submitted for the partial fulfillment

of the requirement of MBA award

Date of Submission: September 08, 2011


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A Report

On

Production & Marketing strategy of small Business

Course Title: Entrepreneurship Development

Submitted to

Rumana Tasrin Khanam

Lecturer

School of Business

MBA program

University of Information Technology & Sciences

Chittagong.

Prepared by

SL. No. Name ID01. Md.Anisul Islam 10335174

02. Syed Mazba Uddin 10335135

03. Shiuly Sarkar 10335175

04. Md. Arifur Rahman 10335176

05. Mahtabul Alam 10335173

42nd batch

School of Business

MBA program

University of Information Technology & SciencesChittagong

Date of Submission: September 08, 2011


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Letter of Submission

Date September 08, 2011

To

Rumana Tasrin Khanam

Lecturer

School of Business

MBA program

University of Information Technology & SciencesKhulshi, Chittagong.

Subject: Submission of Term Paper on Production & Marketing strategy of small Business

Dear Madam,

This is the most excellent time when we have the overwhelming experienceof submitting the term paper on Production & Marketing strategy of small Business as

a requirement of RMBA Program. This report has been attempted to focus onthe above mentioned topic exclusively which will give full fledged idea

concerning the same. We have tried our best to gather relevant informationfor constructing a complete term paper as outlined. The preparation of thisterm paper enables us to a great extent to complement out the theoretical

knowledge with practical analysis. We have tired to prepare this term paperwith best of our skill to make it as sound to go through the accompanyingterm paper & evaluate it how far we have been successful in the endeavor.

We should like to express our profound gratitude for your kind and conscious

guidance in preparing our term paper in the given time. We sincerely believethat you will find this Study very interesting, informative and enlightening.

Thank you very much for your kind co-operation.

Sincerely,

Group members


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Acknowledgement

At the very first we are expressing our gravitated to almighty Allah for whose kindnesswe are sound mentally and physically enough to prepare this term paper.

Its a great pleasure for us to work with the term paper based on a topic Production &Marketing strategy of small Business This is very much significant today. We hopeworking on this topic will help us to gather various experience to practical field.

We wish to express our gratitude, sincerer application to our honorable teacherRumanaTasrin Khanam whose massive support supervision and advice was support us inpreparing this term paper than we should like to then the various authority to give usmany information. Without their support as well as help this paper could never have been

completed, we should like to offer a specials that thanks Mr. Maruf, Mr. Rahman , Mr.Shujon, & Mr. Riaz for their cordial support & coordination to complete ourterm paper.

Group members


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Preface

Term paper is the pre requisite for the post graduation in MBA classroom discussionalone cannot make a student perfect in handling the rest business situation; therefore, it isan opportunity for the student to know about the real life situation through this program.The topic of our term paper is Production & Marketing strategy of small Business

The term paper is basically divided into various chapters. In term paper discuses aboutDefinition, Advantages, Disadvantages, Characteristics, Various strategy, Problems,suggestions, some marketing strategies with Conclusion.

Group members


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Content

DEFINATION

SOMEOTHERDEFINITIONS:

DEFINITIONSINTHE CONTEXTOF BANGLADESH

CHARACTERISTICSOF SMALL BUSINESS ENTERPRISES

ADVANTAGES OF SMALL BUSINESS

DISADVANTAGESOFSMALLBUSINESS

Small Business Strategies

Competitive strategy: how-to compete?

How to achieve overall cost leadership

Advantages and disadvantage of industry-wide strategies

Product Market Mix Strategy

Offensive Defensive StrategiesSome Marketing strategy for small business

Common Problems of small Business

Suggestions

Conclusion

References


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DEFINATION:

According to Small Business act 1934, A business which is independentlyowned and operated and not dominant in its field is a Small Business.

Bolton Report on the commission of the inquiry on Small Business firms,1977,Small firm is one that has a relatively small share profits market.

Stoner, Freeman, & Gilbert, 1995, Small Business refers to business locallyowned and managed, often with very few employees working at a singlelocation.

US Government, A Small Business is one with fewer than 500 employees.

According to executive committee for national economic development,A SmallBusiness one of which process at least two of the following characteristics:

-Managers are the owners, -Capital supplier and the owner is individual or a small group, -Worker and the owners are local, market may not be so. -Relatively smaller compared with the biggest unit of the industry [Sales,

employees etc.]

From all of the above definitions we can make a general definition of Small Business. A

business not dominating in its field, does not engage in any new marketing, workers arelocal, working at a single location, produced units are relatively small in size, and oftenall organized by the owner or his family members.

Now-a-days there are a lot of Small Business firms are operating in verity of fields. Weget our daily necessaries from the grocery shops. One takes food from a restaurant orfrom a first food shop. Some shops are selling cloths, books, electronics etc. Hair cuttingsaloon, laundry, automobile and electronic mechanic, travel agent all of them are servingus in different ways. A doctor, engineer or a lawyer give us different consultationservices.

SOMEOTHERDEFINITIONS:

Curtis E. Tate, Jr. and his co authors in their book Successful Small Business

Management (1982) define small business as An organization with a name, a place of

operations, an owner, and one or more workers other than the owner.


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The Federal Reserve Bank of USA says small business is one which is independently

owned and operated but is not dominant in its field. In the Small Business Act of 1953,

the US Congress gave the same definition of small business.

DEFINITIONSINTHE CONTEXTOF BANGLADESH:

Small industry means an industrial establishment or unit which is rum mainly by hired

labor and not using mechanical motive power but does not normally employ more than

50 workmen and whose land, building and machinery does not exceed Tk.150, 00,000 in

value in either case. E. Pakistan Small Industries Corporation Act of 1957.

CHARACTERISTICSOF SMALL BUSINESS ENTERPRISES:

There are many characteristics of small business. Some of which are described in thefollowing paragraph:

Unity of Individuals and the Organization

The strength of small business is that individual employees retain their personalidentities, yet support the unity of the organization. Employees understand and committhemselves to corporate objectives.

High Individual Motivation

Individuals are highly motivated for further exertion and organizational development.Though pay for performance is a principal motivator in a small business, comfortable andsocial life related workplace plays a role of the social motivator.

Owners as Managers

In most of the small businesses, owners are responsible for managing the firm. Theemployees are hired on owners discretion. Owners are responsible for taking any and allmanagement decisions.

Streamlined Communication

With simple and petit structure of the organization, good and effective communicationare maintained with and among employees. This keeps the organization more susceptibleto changes in the business arena.

Supportive climate for Organizational Integration


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Management including supervisors keeps close relations with subordinates. They offertraining, encouragement and counseling to subordinates for problem solving. Employeesare provided with challenging and enjoyable workplace.


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ADVANTAGES OF SMALL BUSINESS:

The small business has many advantages over its larger counterparts. It does not haveaccess to huge resources, numerous employees strong financial backup, or theprofessional management of the big businesses, but it does posses some distinct

advantages that are only its won. Because of small percentage of income that goes foroverhead and non-revenue-producing activities, there are still some functions that can beperformed more efficiently by small business enterprises than by large ones.

Growth

Small business helps entrepreneurs develop as an individual and expand their personalabilities. Their growth might have been hampered had they been employed under theguidance of a supervisor in any other organization. Ambition also motivatesentrepreneurs and makes them hang in there.

Provides self employment opportunities

Small business helps people provide job for themselves. Sometimes employmentopportunities are limited in big industries. There are losing big firms that are frequentlycutting back, closing plants, and laying off people. This creates unemployed people insociety who are otherwise capable of performing various jobs. The area of small businesscan provide a much-needed source of new employment. This shows the importantcontribution the smaller firms are making to their respective notional economics.

Flexibility

Large corporations often lack the flexibility of small business because of the complexorganizational structure, established bureaucracies, and high overhead costs. Decisionmaking in the small business frequently depends on only one or two persons. Themanagement and the workforce in the small business may be more adaptable to changethan those of the large corporation. They can react more quickly to changing marketconditions or to modify a product for a customer more easily than could a large business.

Better Inter-personnel Relationships

Both managers and staff in the small business are treated as individuals. Managers aregiven freedom and decision making and provided with variety of responsibilities. Staffsare encouraged to innovate there by reducing boredom in the workplace. Lines ofcommunication are direct between owners and employees.

Independence

Small businesses give its owners the liberty or independence to come go as they please.Owners of small business enterprises have a degree of freedom that are not customary formanagers in most big corporations this freedom encourages self-motivation. Often thisfreedom of small business owners means the right to work harder and longer hours thanthey would if they were employees of big business. However, the psychological andfinancial satisfaction arising from enterprise ownership is powerful rewards for the risksof going into business for oneself.


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Quick decision

As the owner of the business does all in all in that particular concern, the owner doesdecision-making mostly. So the decision is taken relatively quickly because he or shedoes not have to discuss other people or superiors to take the decision.

DISADVANTAGESOFSMALLBUSINESS:The small business has their share of disadvantages too. These disadvantages havemultiplied in the current years due to increased management problem in recent years.

Inability to cope with growth

Sometimes, the factors that are advantageous to small business turn in to seriousdisadvantage when it is time to grow. Growth often requires the owner to give up certainauthority. Similarly, growth also requires specialized management skills, which the

owner may lack.

Management problem

Effective and efficient management is very important for the smooth running of any kindof business. A new businessperson often has the knowledge and skill to produce a good but will lack the necessary kills of planning organizing, staffing, directing andcontrolling. Yet the small business owner is often forced to become a generalist inmanagement since he or she cant afford to employ a specialized person having necessarymanagerial skills. Also they do not give the subordinates enough responsibility tomanage.

Shortage of working capital

Shortage of working capital is the most predominant limitation of small business. For thislimitation, they cannot take the advantage of economics of scale. They cannot take theadvantage of discounts given for bulk purchases. This leads to the inability to cope upwith their larger competitors in new facilities, equipment, tools, and methods.

Lack of coordination

Another disadvantage is the lack of coordination between production and marketing. That

is the failure to balance and coordinate these to critical functions. It is important for smallbusiness to keep judicious balance among:

Having too few products so that the orders of potential customers have to be turneddown.

Having too big inventory as to bear too much inventorying and maintenance cost.


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Diversifying too fast. The advantage of diversification and the advantages of productspecialization should be balanced.

Lack of effective selling techniques

Small businesses usually dont have the access to specialized person at marketing. So,they lack in scientific market research, specialty advertising and personal selling. As aresult sales are comparatively lower than the larger enterprises. Location of the headoffice and the accessibility does affect the sale to certain degree.

Situation Leading to Formation of Small Business:

The formation of small business is a result of certain situational advantages it enjoys.

These advantages help small businesses to be a part of any economy. Apart from relaxed

government policy, the followings are the situations where small businesses have an edge

over their bigger counterparts.

ntroducing new product or idea

There is always a risk involved in introducing a new idea or product. In case of a radical

innovation, market reaction and consumer acceptability need to be tested. It is therefore,

preferable to introduce the product through a small firm, which ensures less risk factor on

investment.

Having a Local Market for the Commodity offered

In certain form of business, operation in a larger market is not economically viable. For

instance, it will not be economical for a restaurant to sell its product to a large market.

Such scale of operation exceeding the local demand would cause inefficient use of

resources. Therefore, a small firm does better in a small scale.

Availability of Limited Market

When the market is limited, small business is the best choice. In a monopolisticcompetitive market there is little possibility to grab a substantial market share. In suchcase, small business offers better returns.


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Small Business Strategies

For a business, the purpose of small business strategies should be to seizecompetitiveadvantage for the long term. The three main small business strategiesasproposed byMichael Porter are cost leadership, differentiation and focus -these three business

concepts are now the cornerstones of any business strategy.We will at these threestrategies individually.

As part of the small business strategies - competitive strategy isessential for theorganization to survive. Hence we will also look at the mostimportant competitive tacticsand strategies.

Strategic choice: Having determined the gap that needs tobe filled to achieve budgeted performance we can look at the alternative small business strategiesthat can beimplemented to fill the gap.

There are broadly three categories of strategic choice:

a. The competitive strategies are the strategies that the organization will pursue forcompetitive advantage. They determine how you compete.

b. Product-market strategies determine where you compete and the direction ofgrowth.

c. Institutional strategies determine the method of growth.

Competitive strategy: how-to compete?

Competitive advantage is anything that gives one organization anedge over its rivals in

the products it sells and the services it offers. A firmshould adopt a competitive strategyto secure a competitive advantage.

The management guru Michael Porter states that there are threegeneric competitivestrategies.

They are:

1. Cost leadership being the lowest cost producer in the industry as a whole;2. Differentiation is the exploitation of a product or service which the industry as a

whole believes to be unique;

3. Focus involves a restriction of activities to only a part of the market (a segment)through;a. Providing goods and/ or services at lower cost to that segment (cost-focus)b. Providing a differentiated product or service to that segment (differentiation-focus)


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They are graphically illustrated in figure below:

Cost leadership and differentiation are industry wide small business strategies. Focusinvolves segmentation but involves pursuing, within thesegment only, a strategy of costleadership or differentiation.

Cost leadership

A cost leadership strategy seeks to achieve the position oflowest cost producer in theindustry as a whole. By producing at the lowestcost, the manufacturer can compete onprice with every other producer in theindustry as a whole. By producing at the lowestcost, the manufacturer cancompete on price with every other producer in the industry,and earn unitprofits, if the manufacturer so chooses.

How to achieve overall cost leadership:

a. Set up production facilities to obtain economies of scale;b. Use the latest technology to reduce cost and/or enhance productivity (or use cheap

labour if available).

c. In high technology industries, and in industries depending on labour skills for product design and production methods, exploit the learning curve effect. Byproducing more items than any other competitor, a firm can benefit more from thelearning curve and achieve lower average costs.

d. Concentrate on improving productivity.e. Minimize overhead costs.f. Get lower cost sources of supply.g. Relocate to cheaper areas.


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Differentiation

A differentiation business strategy assumes that competitiveadvantage can be gainedthrough particular characteristics of a firmsproducts. Products may be categorized as:

a. Breakthrough products offer a radical performance advantage over competition,perhaps at a drastically lower price.

b. Improved products are not radically different from their competition but areobviously superior in terms of better performance for a similar price.

c. Competitive products derive their appeal from a particular compromise of costand performance. For example, cars are not all sold at rock bottom prices, nor dothey all provide emaculate comfort and performance. They compete with eachother by trying to offer a more attractive compromise than rival models.

How-to differentiate

a. Build-up a brand image (e.g. Volvo cars supposed to be safer than any other car)b. Give the product special features to make it stand out.c. Exploit other activities of the value chain.

Advantages and disadvantage of industry-wide strategies

Advantages Cost Leadership Differentiation

New entrantsEconomies of scale raise entrybarriers

Brand loyalty and perceiveduniqueness are entry barriers

SubstitutesFirm is not vulnerable as its lesscost-effective competitors to thethreat of substitutes

Customer loyalty is a weapon againstsubstitutes

CustomersCustomers cannot drive down prices by further than the mostefficient competitor

Customers have no comparablealternative

SuppliersFlexibility to deal with costincreases

Higher margins can offsetvulnerability to supplier price rises

Industry rivalryFirm remains profitable whenrivals go under through excessiveprice competition

Brand loyalty should reduce pricesensitivity

Disadvantages Cost leadership Differentiation

New entrantsTechnological change will requirecapital investment or make

production cheaper for competitors

New entrants can differentiate too

Substitutes Sooner or later customers becomeprice sensitive

CustomersCost concerns ignore productdesign or marketing issues

Customers may not value thedifferentiating factor

SuppliersIncrease in input costs can reduceprice advantages

Differentiation may require specialistinputs

Industry rivalry Competitors can benchmark their Competitors can copy


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processes or cut costs

Focus or niche strategies

In a focus strategy, a firm concentrates its attention on one ormore particular segments or

niches of the market, and does not try to serve theentire market with a single product.

a. A cost-focus strategy: aim to be a cost leader for a particular segment. This typeof strategy is often found in the printing, clothes manufacturer and car repairindustries.

b. A differentiation-focus strategy: pursue differentiation for a chosen segment.Luxury goods are the prime example of such a strategy.

Advantage of focus

a. A niche is more secure and a firm can insulate itself from competition.

b. The firm does not spread itself out too thinly.

Drawbacks of a focus strategy

a. The firm sacrifices economies of scale which would be gained by serving a widermarket.

b. Competitors can move into the segment, with increased resources (e.g. theJapanese moved into the US car market, to compete with Mercedes and BMW)

c. The segments needs may eventually become less distinct from the main market.

Which strategy?

Although there is a risk with any of the generic small business strategies, Porter arguesthat a firm must pursue one of them. A stuck in themiddle strategy is almost certain tomake only low profits. This firm lacksthe market share, capital investment and resolveto play the low cost game, theindustry-wide differentiation necessary to obviate the needfor a low costposition, or the focus to create differentiation or a low cost position inamore limited sphere.

In practice, it is not simple to draw hard and fast distinctionsbetween generic strategies here are some of the problems:

a. Problems with cost leadership

i. Internal focus. Cost refers to internal measures, rather than market demand. Itcan be used to gain market share: but it is the market share that is important notcost leadership

ii. Only one firm. If cost leadership applies cross the whole industry, only one firmwill pursue this strategy successfully.


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iii. Higher margins can be used for differentiation. Having lower cost does notmean that you have to charge lower prices or compete on price. Being a costleader gives the company freedom to choose other competitive strategies.

b. Problems with differentiation the assumption here isthat the differentiated good

will always be sold at a higher price:

i. In practice a differentiated product may be sold at the same price as competingproducts in order to increase market share.

ii. Differentiation against which competitor? Do they compete on the same basis?Are the same market segments covered? Are some of the questions not covered.

iii. Source of differentiation this can include all aspects of the firms offer not onlythe product. Restaurants aim to create an ambience as well as serving food ofgood quality.

Focus small business strategies probably have fewer conceptualdifficulties, as it

compares well against ideas of market segmentation. Inpractice many companies followthis strategy.

Product Market Mix Strategy

Product Market Mix Strategy - Ansoff drew up a growth vector matrix, describing acombination of a firms activities in current and new market, with existing and newproducts. The product-market mix strategy is illustrated in diagram below:


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Current products and current market: market penetration

Market penetration: the firm seeks to:

a. Maintain or increase its share of the current market with current products.b. Secure dominance of growth markets.c. Restructure a mature market by driving out competitors.d. Increase usage by existing customer.

Present products and new markets: market development

a. New geographical areas and export marketsb. Different package sizes for food and other domestic items so that those who buy inbulk and small quantities are catered for.c. New distribution channels to attract new customers (e.g. organic foods sold insupermarkets not just specialist shops)d. Differential pricing policies to attract different types of customer and create newmarket segments.

New products to present markets: product development

a. Advantage Product development forces competition to innovate, new comers to the

market might be discouraged.b. The drawbacks include the expense and the risk.

New products and new markets: diversificationDiversification occurs when a company decides to make new products for new markets.It has to have a clear idea of what it hopes to gain from diversification. There are twotypes of diversification, related and unrelated diversification.

a. Growth - new products and new markets should be selected which offer prospects forgrowth, which the existing product market mix does not.b. Investing surplus funds not required for other expansion needs: but the funds could

be returned to shareholders.c. The firms strengths matches the opportunity if outstanding new products have beendeveloped by the companys research and development department. The profitopportunities from diversification are high.

Related diversificationHorizontal integration refers to development into activities which are competitive with


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or directly complementary to a companys present activities. Sony with its playstationstarted to compete in computer games.

Vertical integration occurs when a company becomes its own;a. supplier of raw materials, components or services (backward vertical integration)

b. Distributor or sales agent (forward vertical integration), for example: where amanufacturer of synthetic yarn begins to produce shirts from the yarn instead of selling itto other shirt manufacturers.

Advantage of vertical integration

a. To secure supply of components or raw materials with more control. Supplierbargaining power is reduced.b. Strengthen the relationships and contacts of the manufacturer with the final consumerof the product.c. Win a share of the higher profits.

d. Pursue a differentiation strategy more effectively.e. Raise barriers to entry.

Disadvantages of vertical integration

a. Over-concentration - A company places too many bets on a same end-market productb. The firm fails to benefit from any economies of scale or technical advances in theindustry to which it has diversified. This is why in the publishing industry most printingis subcontracted to the specialist printing firms, who can work machinery to capacity bydoing work for many firms.

Unrelated diversification - conglomerate diversification

Unrelated diversification or conglomerate diversification is very unfashionable now butit has been a key strategy for many companies in Asia.

Offensive Defensive Strategies

Offensive Defensive Strategies - considering strategic options from a competitor ratherthan customer orientation is referred to as competitive marketing strategy. Kotler andSingh identified five offensive and six defensive strategies these are named aftermilitary strategies.

Offensive warfare

1. Frontal attack This is the direct, head on attack meeting competitors with the sameproduct line, price, promotion, etc. Because attack is on the enemys strengths rather thanweakness it is considered the most risky and least advised strategy.


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2. Flanking attack The aim here is to engage competitors in those products marketswhere they are weak or have no presence at all. Its overreaching goal is to build aposition from which to launch, an attack on the battlefield later.

3. Encirclement attack Multi pronged attack aimed at diluting the defenders ability toretaliate in strength. The attacker stands ready to block the competitor no matter whichway he turns the product market. Product proliferation supplying different types of thesame product to the market. Market encirclement consists of expanding the products intoall segments and distribution channels.

4. Bypass attack This is the most indirect form of competitive strategy as it avoidsconfrontation by moving into new and as yet uncontested fields. Three type of bypass arepossible; develop new products, diversify into unrelated products or diversify into newgeographical markets.

5. Guerilla warfare Less ambitious in scope, this involves making small attacks indifferent locations whilst remaining mobile. Such attacks take several forms. The aim isto destabilize the competitor by small attacks.

Defensive warfare

1. Position defence static defence of a current position, retaining current product

markets by consolidating resources within existing areas. Exclusive reliance on a positiondefence effectively means that a business is a sitting target for competition.

2. Mobile defence A high degree of mobility prevents the attackers chances oflocalizing the defence and accumulating its forces for a decisive battle. A business shouldseek market development, product development and diversification to create a strongerbase.

3. Pre-emptive defence Attack is the best form of defence. Pre-emptive defence is

launched in a segment where an attack is anticipated instead of moving into related ornew segments.

4. Flank position defence This is used to occupy a position of potential futureimportance in order to deny that position to an opponent. Leaders need to develop andhold secondary markets to prevent competitors from using them as a spring board into theprimary market.


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5. Counter offensive defence This is attacking where the company is being attacked.This requires immediate response to any competitor entering a segment or initiating newmoves.

Some Marketing strategy for small business

1. Focus On One Contact

Marketing Strategy For Small Business: Target one decision maker you'd like to meetand invite him to share his expertise. Ask for a (very) short article for your newsletter or aquick phone interview for your podcast. Follow up by sending, or better yet dropping bywith a copy of your finished production with a thank-you and of course, moreinformation about your product & services.

2. Create Relevant Content

Marketing Strategy For Small Business: Promote your business online via creatingcontent areas on your website that would attract users and position your business andbrand as a source of valuable knowledge. Creating these content pages does not requireany additional budget, but they do require time and creativity. For example, a childrenclothes store can dedicate a page to Tips on keeping your child busy on school vacationand through that page, attract parents to the site.

3. Write For Trade Magazines

Marketing Strategy For Small Business: If you want people to call you, there is

nothing like writing an article for a trade magazine (for B2B) or local magazine (forB2C) to gain credibility and exposure. You can demonstrate your expertise and positionyourself as the go-to person for your product or service. This strategy generates responsesfrom people who are the ready-to-buy stage.

4. Google AdWords On The Cheap

Marketing Strategy For Small Business: Run market research on the cheap by usingGoogle Adwords to target an audience, with the landing page being a question survey. Asnappy question to attract people, along with Google's Geo-targeting can provide greatresults, for next to nothing.

5. Sponsor Your Local Sport Teams

Marketing Strategy For Small Business: Sponsor a local sports team. For less than thecost of a 1/4 page ad in a local paper, you can buy team uniforms for a local soccer,basket ball, baseball or other sports teams. This a sure fire way to get the team, and theirfriends, family and fans that your business is a genuine part of the local community. It's a


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great PR technique too, as your local press will be very interested that you're taking thisaction and will probably send a photographer round to photograph you with the team andtheir new strips!

6. Its All Keywords

Marketing Strategy For Small Business: Statistically, 3 out of 4 internet users live inNorth America, making exposure on the web critical. Having a website that is keywordoptimized for what your small business does and where you are located works as anonline brochure as well as a 24 hours a day sales person for your services and products.

7. Get Out Of The Dark Ages

Marketing Strategy For Small Business: Business owners should look beyond thebrick and mortar and reach out to a bigger audience with the web. Establishing a presenceonline is key, whether it's by creating an interactive, regularly updated site or blog, or by

building informative yet informal profiles on social networking sites like Facebook orTwitter. Opening communication channels online will not only increase brand awareness,it'll also boost your company's rank on search engines, and prove that you're a businessthat "gets it" and doesn't live in the dark ages.

8. Go To The Chamber

Marketing Strategy For Small Business: Make yourself the expert in your field.Volunteer to teach seminars through your local Chamber of Commerce about your areaof expertise. Your business will receive promotion through the event itself, as well asthrough all marketing for the event. Your association with the Chamber will boost your

credibility, as well.

9. Create An E-News For Your Biz

Marketing Strategy For Small Business: As a relatively new start up, it may soundold fashioned in todays Twitter world, but having a great e-news with valuable contentis key for our business. E-News is more than a sales pitch, rather, the opportunity toposition your business as an expert, provide relevant information, and to add anotherlayer in relationship building. Building a strong database with a focus on media/bloggers,giving your clients the opportunity to subscribe, and publishing frequently (but notobtrusively) is still one of the best, and least expensive, marketing tools in our arsenal.

You would be surprised how often your content is tweeted on twitter, covered bybloggers, or open the door to a more extensive PR pitch.

10. The "Wow" Factor

Marketing Strategy For Small Business: Marketing gurus often refer to it asdifferentiation. Academics who fancy themselves as marketers theyre the ones who


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write marketing text books prefer to call it a USP, your Unique Selling Proposition.What theyre both taking about is more correctly described as Wow! Whatever it isthat separates your Stuff your products or services from the similar Stuff yourcompetition is selling, thats your Wow!, what makes your Stuff better.

11. Leverage Online Forums

Marketing Strategy For Small Business: Many communities now have onlineforums/bulletin boards that offer varying levels of paid memberships. Purchase amembership that allows you to advertise your business and USE IT. Page with highesttraffic in this specific area ... www.Paulding.com ... business advertising membership$150/year. Every time you post with your business ID, your business name (and webpage link) is put in front of potential customers. Post about your specials, sales, whathave you. (Be VERY careful to remember that every post is representative of yourbusiness.)

12. Charity Donations

Marketing Strategy For Small Business: My #1 PR tip for small businesses: FOCUS,FOCUS, FOCUS. Pick one or two charity organizations or causes and donate only tothem for the year. Create a letter that says why you chose the organization(s) so whenyou get inundated with requests for large donations, you can politely and formally sayNO and still send a respectful message that you are committed to the community. Youllsave a ton of money on $50 year book ads and donations to the latest event that is NOTyour target market.

13. Hand Written Follow Up Cards

Marketing Strategy For Small Business: Believe it or not, I have found a lot of successwith the good old fashioned hand-written follow up card. Whether it's to say thank you,that it was a pleasure meeting, or that I'm simply looking forward to a future businessrelationship, I am much more likely to hear back from that lead than someone who Isimply met and didn't write to follow up with. How many hand written cards do you getin the business world these days? Almost none...it's an extremely personal effort thathelps you stick out and remain memorable in your clients' mind. It seems simply andold-fashioned but it works.

14. Buzz Marketing At Trade Shows

Marketing Strategy For Small Business: Best tip, resist the urge to look/sound likeyour bigger competitors. To create buzz at a trade show for a client and demonstrate howother competitors waste customers' time, we strapped a big clock to a gurney and walkedit around the show floor with two EMT types. T-shirts with the URL and booth numberwere the only "branding." Buzz = conversation, conversation = participation.


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15. Personalized Gifts

Marketing Strategy For Small Business: Identify a unique, personalized gift to giveyour target customer's customer on the target customer's behalf. Example: A small,boutique hotel recommends a restaurant. The restaurant gives the diner a free dessert,

compliments of the hotel! Everyone wins.

16. Guest Blogging

Marketing Strategy For Small Business: Visit blogs that attract your ideal customersand offer to write a guest post in exchange for a link and a byline.

17. Tell Memorable Stories

Marketing Strategy For Small Business: A convincing (and free) marketing strategyyou can use to 'tangibilize' your service is by telling storiesgive specific and practical

examples of what you have accomplished for clients. Use real-life examples of projectsyou completed, specific problems you solved or successes you achieved. If you're a newentrepreneur, create a realistic scenario about how you would help your ideal clientovercome a typical challenge. Relate your story through articles, blog posts, publicspeaking or by publishing a special report.

18. Participate in Trade Associations

Marketing Strategy For Small Business: Business-to-business professional serviceorganizations get the most bang for their buck when they impress prospective referrerswith their capabilities. One of the best ways to do this is through active involvement at

trade associations where prospective referrers' congregate. This participation enablesthem to a) increase their visibility and b) gain the opportunity for the consistent andfrequent interactions it takes to build lasting relationships."

19. Inspire Customers To Call You

Marketing Strategy For Small Business: Send a postcard mailing monthly instead of ahard copy newsletter. Cost self printed is $0.46 ea. including the stamp. Title - 100reasons to call us - list 8, the 9th - call to meet for coffee, - 10th is .."more to come". Listyour skills, talents, tasks and ask questions - we've used it for a fun contest and sent a$10. gift for all correct answers and a $ 2.00 gift for participating. They read the card!

20. Enter A Business Award Competition

Marketing Strategy For Small Business: There is nothing like entering a businessaward competition to strengthen the reputation of your small business. Winning an awardcan catapult your reputation within your industry and with the sales audience you aim toattract. Many competitions cost nothing to enter except for the time it takes to prepare


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your entry. Who awards business prizes? Professional and trade organizations, chambersof commerce, Better Business Bureaus, universities even churches. Keep your eyesopen for opportunities. They are all around. And remember, there is a secret all awardwinners share: They have taken the time to prepare well-written entries. Cant write well?Then pay someone who can to prepare your entry or barter services if youre trying to

save money. The rewards for winning a business award can last seemingly forever. Bragabout winning on your website; send a letter to clients; post the award in your office orstore so whoever comes in will see it. And of course, send out a press release and getyour picture in the paper!

21. Network Your Networks

Marketing Strategy For Small Business: Networking with friends who then networkwith their friends. When trying to spread the word about my company, I have e-mailedeveryone I know and told them to e-mail everyone they knowand so on. Iveexpressed that I am a one woman business and desperately need the support of myfriends. I do believe that woman share an unspoken sisterhood and are more likely tohelp eachother outeven without really knowing the other person. I have receivedunbelievable support, tips, and advice from people to date that I have never met face toface. The power is in numbers6 degrees of separation. Someone ultimately knows

someone that can help you outand believe it or notwill want to.

22. Share Your Expertise Freely

Marketing Strategy For Small Business: Let the public know what you're an expert atand use that to boost your credibility and value. Publish tips, share your expertise throughpublic speaking, even try pitching the media... make it super easy for people to associateyou and your business with excellence and expertise in your field.

23. Never Stop Growing Your Network

Marketing Strategy For Small Business: Expand your network of contacts and potential clients. Ask your best, most powerful, most influential friends or businessassociates to introduce you to the five people they think you should meet to expand yourbusiness. Take each of the contacts out for coffee and get to know them. Discuss yourplans and future goals, tell them about why your business is special and ask for their


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advice. You will be amazed at how these new contacts will pay off ten-fold withrecommendations to you for new business and innovative ideas you hadn't thought of.

24. HARO Gift Bags

Marketing Strategy For Small Business: Each Friday in the second edition ofHAROthere are Gift Bag Requests. You can find decision makers with events that have a matchfor your product or service. Once both parties agree that there is a fit it can lead to qualitynetworking and future business opportunities.

25. Free Soap

Marketing Strategy For Small Business: give away soap products on Twitter. First Iask a question about a product on my web site or Blog. The first person to answer winssoap. The I write Be Sweet, please retweet upon receipt on the envelope so they will goon Twitter and say thanks. Pretty simple but a good way to get people to your site, blogand give a shout out for your products.

26. Network With The Media In Your Niche

Marketing Strategy For Small Business: Maintain relationships with media contactsthat cover your industry, even when you dont have news for them. Check in with themevery month or so and ask how you can help them as an expert in your field. When youdo have news, its that much easier to get them to print it!

27. Work For Free

Marketing Strategy For Small Business: I volunteer for the local public broadcastingstation as on-air talent and to answer phones. If you are part of a group, you can answerphones during one of their pledge periods during one of their more popular shows they

will mention your groups name. When I am on the air, my name and/or org. getannounced as part of the introduction or if you are creative you can weave in what you dowith what you are saying about the program if there is a sensible link.

28. Be Transparent, Tell Your Story

Marketing Strategy For Small Business: The best way to get noticed in today's marketis to tell a personal story. The media is dying for news as they lay off thousands at
http://www.helpareporterout.com/http://www.helpareporterout.com/


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newspapers across the country. Have ready-to-run articles prepared to send off at aminutes notice will create a great relationship with papers. They'll consider you a sourceof valuable information!

29. Build That List

Marketing Strategy For Small Business: Use opt in email marketing to talk to yourbest customers the ones that want to hear from you and have signed up to receive yourmarketing messages and offers. Be sure to deliver relevant, unique and valuable messagesto their inbox. This can build loyalty, drive sales and cut other costs.

30. The Low Hanging Fruit

Marketing Strategy For Small Business: When I opened my law firm I treated older,more experienced attorneys to lunch and asked that they consider referring me smallercases they didnt have time to handle. With every successful referral I sent a thank you

card enclosing a Starbucks (or their favorite restaurant) gift card thanking them for theirsupport. This helped me start my practice and build a client base without having to spenda lot on advertising.

Common Problems of small BusinessAs we got some real life idea now we will try to find out where the problems actually lie.

In Bangladesh there are a lot of Small Business firms but all of them can not succeed intheir business. It is very hard to operate and make a business profitable here. It is also notvery easy to start a new Small Business firm. In this part we will try to identify the keyproblems that a Small Business firm faces in its establishment and operating period.

The major problem a Small Business firm faces in its establishment period is the problemfor capital or sufficient financing problem. The key to a Small Business success restsmostly on the ability of the entrepreneur to raise adequate amount of fund forinfrastructural development as well as meeting the day to day working capital needs. Oneof the first questions any potential entrepreneur must ask is, "How do I get the money"?The type of the business may be anything but the money necessary for finance is must.

Without necessary fuel (money) no ship (Small Business firm) can run. Plant or fixedasset, financial needs include purchasing land and buildings, machinery and equipments,furniture, vehicles etc all of these require a huge amount of money. In a country likeBangladesh it is not very easy to arrange a satisfactory capital to buy all these. As it isabout Small Business, there is no chance to raises the capital from share market. Onlypersonal and family funds and personal loan from the friends are major source. But in thisway it is very hard to raise a sufficient amount of capital.


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As we use to see Bank as a financing agent, it is very normal to think that one can get aloan easily from the bank. But the true story is far from this imagination. It is really ahard job to get a loan from a commercial bank for a Small Business firm. It is almostimpossible for an inexperienced entrepreneur to manage a loan from a commercial bank.

There are a lot of formalities and paper works need to be completed to get a loan. If anyone wants to apply for a loan he must show some influential guarantor, a certificate ofcitizenship, character certificate, certificate of previous business experience, a letter ofpermission for the business from authority etc. with the application paper. Sometimes it isalso necessary to make (?) please the associated officials of the bank. All of the workneeds to be done before getting the loan. After doing all these no one can assure about theloan to be sanctioned. There are some other inner story too. Actually banks and otherfinancial institutions are not really interested about giving a loan for a Small Businessfirm. But they are ready to help the BANKRUPTS.

There are some other sources for finance - micro credit by NGO, charitable foundation,

bond, Small Business financial bank, trust company, mutual fund etc. From all theseexcept NGO none of them have any good record of financing Small Business. But thereare some problems with NGO. Although they claim that they have a very high percentageof returning loan back but its only the one side of the coin. The other side says quitedifferent a story. Sometimes they distribute loan to very much needy entrepreneurs in ahigh rate of interest. It is also often said that some NGOs practice some unfair way to gettheir loan back. They create much pressure to refund the loan. Sometimes they take awaypersonal property of the loan receiver on force if he is unable to pay back the loan. A fewdebtors even got suicide enabling to refund the loan.

Lack of necessary raw material is another problem. Everyone need run and run for rawmaterials. Here we don't have a definite supply chain of raw materials and the producers.Entrepreneurs are ready to pay necessary money for it but there is no instable supply.Sometimes there is nothing found when necessary, sometimes all are very high in priceand sometimes adequate raw materials are in the market and it is more than necessary.

Another major problem of Small Business development in Bangladesh is lack ofnecessary government plannings to up this sector. 31 years already have been passedafter our independence. But still today we suffer from sufficient planning. Company andSmall Business is very different. So this sector needs a special attention from thegovernment. The procedure of distributing loan is not very easy. Still there is no plan thathow many Small Business firms is to be financed each year. Government finished thereduty by installing a few training center for potential entrepreneurs. But the centralcontrolling is inadequate. There is nobody to monitor the whole activities. No one tosuggest that how many entrepreneurs should be trained for what.

Every business needs some power supply and some other public utility services.


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Electricity, Gas, Water, Telephone etc. are some prerequisites for a business. InBangladesh only the sufferer know how tough it is to get those connections. You need topay a handsome amount o bribes to a invisible hand. In case of telephone you might haveto wait for more than years to get connected. All these hazards are hampering the SmallBusiness sector in Bangladesh.

Political and social instability is another big problem. Whether it is a giant company or aSmall Business the success of a business is greatly dependant on the political and socialstability of a country. Every business firm is dependant on production or purchasing andselling. This is the blood stream of a Small Business firm. If any of these two is stoppedno Small Business can exist. It is possible for a giant company to stop all its operationsfor a couple of months and then start it again. But a Small Business firm can not do this.In Bangladesh our political and social climate is not stable at all. There is a condition ofpre-war between the ruling party and the opposition. Always they are face to face witheach other. Very often they call Hartal and strikes. Such a loss can not be sustained. Inthe period of 1991-1996, 173 days of Hartalwere been called in total. It was 140 in1996-2001 sessions. This is almost impossible for a small business firm to continue itsoperation in such a condition. They can not sustain this loss.

Now a days terrorism is becoming the cancer of Bangladesh. Above discussed politicalinstability is the reason for it. This terrorism is also hampering this Small Business verymuch. Toll collectors are very daring and create pressure on the businesses to collectillegal tolls. As the Small Businesses already suffer from lack of financing it is similar todeath to them when they have to please the toll collectors. There are terrorists and tollcollectors all and everywhere in Bangladesh. If one tries to launch a Small Business firmhe needs to pay these tolls in a number of places. Otherwise those people may stop itsoperation and sometimes more. One need to pay for it while buying or constricting ahouse, purchasing raw materials, transporting to the factory, selling a good; in all places.There are also weekly, monthly or special tolls in any religious festival one need to pay.Terrorists are becoming daring day by day. In recent times they kidnap entrepreneurs andbusinessmen if they dont get the money. This condition is a serious obstacle for thedevelopment of Small Business in our country.

Now lets have a look at some internal management problems of Small Business firms.From any giant company to a cottage shop good management is a must for success. It is achallenging job to manage a Small Business firm here as they need to compete with giantcompanies. Management people should know all the arts of management. In our countryhigher study on business management is a new concept. Bachelor degree in businessadministration is being awarded form IBA for eight years. So a lot of managementpersonnel of Small Business firms are without any formal management study. They arenot capable of managing, specially a Small Business firm. They cannot take appropriatedecision in the right moment. These under trained people create a lot of problems.

-Cannot identify target market or target customer. -Does not plan. -Believes advertising is an expense not an investment.


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-Only primary knowledge of pricing policy and strategy. -Cannot identify trading area. -Cannot delegate. -Believes loan would solve every problem.

All these problems are usually created by an unskilled management people. And it is it ismore that skilled people are not available in the market.

Another common problem of Small Business development in Bangladesh is problem ofdistribution of goods. It is natural that a new product needs to go through a strongcompletion from other similar products. Small Business firms suffer from lack ofdistribution as they cannot compete with the giants. Another point is about our customers.They are very conservative and very much brand loyal.

These are the major problems that our Small Business firms usually face while operating.

Suggestions

Here we are giving some suggestions that may be helpful to improve the Small Businesssector in Bangladesh.

As capital is the major problem for Small Business development in Bangladesh specialemphasis should be put here. Commercial banks should finance Small Business by givingthem loan in low interest and for long term.

NGOs are very active in this sector. There activity should be spending all over thecountry.

Government should make definite plan to boost up this sector. Youthdevelopment department should be more activate. Their fund needs to beincreased and rules should be more flexible.

Special ministry can be made to coordinate all this.

Government can give some subsidies to boost up this sector.

Taxation rules should be more flexible for Small Business.

It should be assured that the Small Business firms will get sufficient raw materialsin lower cost.

Political and social instability should be maintained. Terrorism must be sustainedand keep under control.

Red tapism must be abolished. Corrupted officials need to be punished and replaced.


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It must be assured that the Small Business firms will get public utility service connectionwithout any delay and bribe.

A syndicate can be made to help the entrepreneurs and to support this sector.

Conclusion

As we discussed all these it is clear that there are a lot of problems that Small Business isfacing. It has many positive effect and some drawbacks too. We cannot build some giantcorporations like Microsoft or Sony Electronics overnight. But we can launch a SmallBusiness firm easily. We can employ a number of unemployed people in this sector. Intodays super market's and giant corporation's world as Small Business is still alive andtransacting thousands of million of taka each year it can be said that Small Business firmcan take a very important role in our economic development. So in my opinion theprospect of Small Business in Bangladesh is very bright.

References:

1) 'A Study on East Asian Economy'; by World Bank; page: 31 - 407;

Publisher: University Press Limited; 1981.

2) 'Developing Careers on Small Business'; by Monjurul Akhter; page: 1 - 34, 67-286;

Publisher: Maola Brothers; 1998.

3) 'Entrepreneurship and Lives of Successful Entrepreneur'; by Dr. A. R. Khan; page: 2 -

165;

Publisher: University Press Limited; 1986.

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