Small Business

Introduction

This paper analyzes the factors that determine the marketing strategies of small businesses. By definition, small businesses are those that employ less than a hundred people (In many cases, they employ people in the single digits as well) and operate in a particular geographical area that is limited in scope. Small businesses are highly susceptible to changes in their external environment and it has been found from studies that there are more small businesses that “fold up” as a percentage of the total number of them that open when compared to the big businesses. (Anglund, 2004, p.45) The succeeding sections analyze the factors that determine the marketing strategies of small businesses.

Sources of Competitive advantage for Small Businesses

Small businesses derive their competitive advantage from the way in which they leverage the cost advantage that accrues to them because of low overheads and the fact that they do not need to spend huge amounts on advertising and brand building. Small businesses typically sell products and services that are of use to customers for routine purposes. (Armstrong et al, 2009, p.156) To take an example, small businesses sell products that range from replacements of household goods and parts for these goods as well as services like handyman, concierge and other services for which there is no need to advertise on a large scale.

Further, small businesses derive their competitive advantage from the fact that their products and services are usually indispensable in the niches that they operate. For instance, the services of a handyman though not necessary everyday is nonetheless indispensable when the need arises because of the uniqueness of the service as well as the fact that the number of providers of such service in a given geographical area is usually limited. (Bannock, 2005, p.68)

Finally, small businesses thrive on the volumes to drive their bottom lines. You can find the local store or the...