Do Small Businesses Understand Marketing?

I recently attended the Global Pet Expo in Orlando. I've been consulting for the event sponsor, the American Pet Products Association, for several years now, so I'm always at the show.

During my three days I had the opportunity to interview several dozen exhibitors, including a lot of small companies, many of them new both in business and at the show.

Besides getting feedback about the industry, the association, and the show I was available to answer marketing questions. But as I've seen year after year, many of these small businesses simply did not understand marketing at all. I found myself giving a lot of brief Marketing 101 presentations. And, sadly, for many of the newer exhibitors, it would probably be too late.

Why does this problem exist? It usually comes from the fact that many have never run a business before, so they don't know that they need to know about marketing. It starts with good intentions. Very often an individual has a particular problem or challenge. A pet owner may want to affect their dog's behavior in some way. They go to the local pet store looking for help, don't find it, and then come up with their own unique solution. 

They build this new solution. It's rudimentary, but works. Friends, family, and neighbors exclaim what-a great-idea-you-should-go-into-business-for-yourself-and-sell-it! The new inventor listens to those people who have never built a business, sinks a ton of money into designing and producing the product, maybe even patenting it (all too often using retirement money), and then looks for a place to sell it.

The big industry trade show is usually where they start. Thinking that several thousand buyers will be in attendance (knowing, of course, these buyers will instantly fall in love with this new product), the inventor spends a bunch more money to exhibit. They get a 10X10 space, set up a couple of tables, print a few thousand four-color brochures, hang a sign over the gray pipe-and-drape, and set out a few sample products. Sometimes, the new exhibitor will set up a small video demonstrating their new invention. Then they stand back and wait for the rush of excited buyers and maybe even a bunch of orders.

99% of the time not much happens. Why? Is it because they have a bad product? To be perfectly honest, there are some who have no chance, or the hill is too steep. Their idea might be a good one, but it fails to catch fire -- maybe the actual market is too small, the price is too high, it's too difficult to explain, or they're aiming at the wrong market. It could be any number of reasons.

For most companies it boils down to a lack of marketing knowledge and understanding. Yes, the inventor and their well-meaning friends and families are in love with their new product, but so what? Enthusiasm is a good trait to have, but that only goes so far. When I meet with these new businesses, I'll usually ask a series of marketing questions:

• What research did you do to determine if there was a market for your product? Who is that market?

• Can you reach that market efficiently and cost-effectively?

• Do you have a written marketing strategy?

• Where have you tested this? For example, if you're selling to retailers, have you done any store tests? If it's a consumer product, how many people besides your inner circle have also tested this?

• How did you come up with the pricing?

• What are your production & shipping capabilities? 

• If you land a big fish, can you handle the size of the orders? Can you handle the potential size of the returns? (In the pet market, that would a company like PetCo or PetSmart.)

• Are you adequately financed?

• If this doesn't work, will you be financially damaged? Irreparably?

These, obviously, aren't all the questions any business should be able to answer, but if you can't answer these, everything else is pretty much moot.

This problem is so prevalent, I'm planning to start a down-and-dirty series of marketing teleseminars or webinars for small businesses. Maybe a monthly program designed to educate small entrepreneurs how to put a rock solid marketing plan together, as well as how to actually use all the tools available. In other words, a What To Do & How To Do It marketing course. It could also include sharing new ideas and questions among subscribers.

What do you think? Would you have an interest in this? Tell me what you think! You can send an email to me at steve@twohatmarketing.com, or by clicking on this link:

Yes, Steve I'm Interested

(BTW, notice how I'm doing market research BEFORE producing and offering the product?)

Comments

[Vicki Lynne Morgan]

Steve, I agree completely with your observations.

As a speaker, trainer, certified guerrilla marketing and selling coach, and consultant, I have spent thousands of hours with small business owners from many industries, including the pet industry.

As a pet industry manufacturers' representative for over 30 years, as well as a counselor and instructor for the New Jersey Small Business Development Center, I have seen firsthand that many people, with a passion for their product, often have no clue as to how difficult it is to launch and sustain a profitable business.

I also walk around the APPA and Backer shows totally amazed at the lack of marketing and showmanship. Those who are not successful often blame the show management, when, in fact, they did not set goals, properly prepare, did little to attract qualified prospects, and lacked a follow-up system. Turnover of new exhibitors in my industry is well above the national average.

Constant learning is mandatory. Exhibitors must engage in on-going education to meet the ever-changing challenges in marketing and selling in today's aggressive marketplace.

I've had the good fortune to help many exhibitors who counsel with me or attend my trade show marketing classes. Their subsequent results far exceed their expectations.

[Richard Erschik]

Nice post Steve. You know me. I could respond in volumes. But in brief, the people in the companies you mention should read the short book "The E-Myth Revisted" before they attempt to hang a shingle.

[Evan Burroughs]

Hi Steve,

Since you did not have a link that says "Sorry Steve, I am not interested and here is why" I will let you know what I think here.

My impression is that you would be reinventing the wheel. In my experience working with my local SBDC I got the startup information and support I needed there along with the connections to my fellow local business owners.

In reading your blog and the Marketing Stimulus Package I tend to think that your information would go right over your target audiences head.

My suggestion would be that you push the SBDC's as the place for folks to get started. Then when they get some basic knowledge under their belt they can better assimilate what you have to say.