Explains small company context, and hopefully provides argument of why sometimes marketing best practices are not followed.

1. Marketing and sales
in small business
environment
@Stenio Ferreira for Successful Marketing: Basics to New Directions
by Susan Snowden at UoC Graham School | Fall/12

2. Presentation Goals
• Challenges faced by a small CPG company
• Consequences of solving these challenges
• Tool to target profitable customer segments
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 2/13

3. Context: my background
• Computer Science (2003)
• Marketing Certification (2008)
• Professional Communications
Certification (2008)
• MBA (2011)
• PMP (2011)
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 3/13

4. Context: company “SmallBiz”
• Has been in business for less than 10 years
• Between 10-20 employees
• $10-20 Million annual revenue
• Branded and private label consumable
products
• Small company!
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 4/13

5. Context: main challenges
• Cash flow constraints
• Shelf space
– Buyer relations
– Price
– Innovative (?)
• Price increases – costs , prices expected to
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 5/13

6. How we create products
Ideal orderly world Small Business realities
Vs.
Customer-centric, market research, Retailer-centric, industry knowledge,
test panels, brand strategy ask friends, names on a package
Key takeaway: In our fast paced world, need to take shortcuts. How to
minimize risk: industry experience, mockups, online sales.
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 6/13

7. Product creation process
• Product A(Q4/2008)
– Origin: buyer request
– Brand: afterthought
– Results: surprisingly successful (explorers vs exploiters)
• Product B (Q2/2012)
– Origin: new partner opportunity
– Brand: independent’s channel brand extension
– Results: good reception, ingredients and pricing strategy need
revision
• Product C (Q2/2012)
– Origin: let’s make a product with this exotic ingredient!
– Brand: mass merchandise brand
– Results: TBD, has potential
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 7/13

8. Retail channels we serve
Channels we serve
Independent stores Grocery stores type 1 Grocery stores type 2 Internet sites
(through
distributors)
Solving channel conflict:
Solution Drawback
Different brands Brand dilution
Different configuration Increased warehouse costs
Different packaging Increased inventory costs
Key takeaway: use creativity to solve problems, but understand the
consequences.
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 8/13

9. How we sell
• Grocery stores type 1 & 2: Rep groups specialized in key
accounts
• Independent stores through distributors:
– Rep groups targeting distributors
– Territory managers to pull products from distributors
• Online:
– Inhouse online sales department
– Rep group
Marketing Budget? Tradeshows, trade publications,
marketing allowances
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 9/13

10. Online strategy - sales
B2C site B2B site Popular retail site
(company owned) (company owned) (3 rd party)
Efforts vs payback analysis
Who? What? Why? How? Where? AVG Ticket cost/100 hits conversion result
Final customers natural products Content, Trust Blogs, twitter B2C site $60.00 $400.00 0.50% $30.00
Price coupon site, google Popular site/ B2C site
mass products Cant find email, call Popular site/ B2C site
Power customers natural products Price google, wholesale resouces B2B site $200.00 $200.00 2% $400.00
mass products
Stores natural products Price, trust, brand(?) Phone, trade ads B2B site $800.00 $100.00 60% $48,000.00
distributor, google B2B site
mass products Looking for variety tradeshow(?) ?
Result is ((100 hits*conversion)*avg ticket)-cost for 100 hits)
Key takeaway: use data and estimates to determine which consumer segment and
strategy to pursue.
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 10/13

11. Main challenges
• Cash flow constraints – Private label, brands(?)!
• Shelf space
– Buyer relations – Rep groups!
– Price – Low margins!
– Innovative (?) – Buyer-centric!
– Price increases – costs , prices expected to
Be creative! Product evolution, package configuration, new items
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 11/13

12. Summary
• Small businesses need to balance flexibility with
business experience
• Understand tradeoffs of not following marketing
theory – brands, customer centric development,
channel conflict.
• Be clear on which audience you want to serve –
profitable after you analyze revenue vs expenses
to reach them
Goals >> Context >> Challenges >> Product Creation>> Product Sales >> Solutions >> Summary 12/13

13. Thank you!
• Twitter:
@stenio123
• Blog:
www.avocadorunner.com