At the core of a business organization should be a focus of maintaining ethical behaviors, which are the moral principles and values that individuals or organizations live and stand by. Your small business can be ethical by doing what society defines as what is just and fair. These acts include philanthropic, ethical, legal, and economic responsibilities that should align with an organization’s practices. Companies should also engage in corporate social responsibility that demonstrates involvement and care for the community.
Bayer Corporation, which produces Yaz birth control, faced serious ethical issues. They allegedly engaged in false advertising where they stated that their birth control pills has a broad range of uses and that potentially serious side effects have been minimized. Both of these allegations were found to be false by the Food and Drug Administration (FDA). Because of this, Bayer had to spend an additional $20 million to fix their advertisements and be approved by the FDA before running them.
Here are some tips that your small business can follow:
Don’t promise something you can’t deliver
Ethical behavior starts at the top level of management…lead by example
Establish a written code of ethics that can be followed
Unethical behavior can tarnish a company’s image and reputation. If a company is unethical, they may have to spend additional money to increase their reputation to an acceptable level.
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Note: The preceding post was written and researched by students in my Honors Marketing 351, Fall 2011 class, from the Mihaylo College of Business and Economics, Cal State Fullerton University, Fullerton California. Many thanks to their time, talent, and contributions to both their career and this marketing blog. Go Titans!
“A positive credit score can improve your ability to obtain financing, and spot weaknesses among suppliers, vendors, competitors and employees.”
– Gary Stem, Small Business Review
$1 – What is a credit score?
Credit scores help a bank determine the probability that you will pay back your loan. Credit scores range between 300 and 850 with the standards of each range depicted in the diagram below. Your credit score is determined by how quickly you pay off obligations (such as loans or credit card payments), your consistency, the amount you borrow, the number of credit cards you own, and the length of your credit history. The sooner you start building a good credit score, the sooner you can start building your business.
$2 – How can you improve your credit score?
To achieve a good credit score, it is important to make the monthly payments on time. Having a late payment or missing payment can negatively affect your credit score. Also, defaulting on any loan (including student loan, home loans, or car loans) could ruin your credit. Most individuals starting a small business use their own credit score to obtain a start-up-loan. How you spend your money now will determine what funding you can receive in the future for your company. According to Stuart Atkins, you should try and only use “40% of your credit limit.” By keeping a manageable amount of credit, you can successfully pay off your debts in a reasonable amount of time and continuously increase your credit score by showing you can successfully and consistently manage your balances.
$3 – What are the effects?
A small business needs a good credit score to acquire start-up funds. With a good credit score you can obtain a better interest rate and possibly a higher loan amount. It is difficult for a small business to compete financially with other businesses if it is unable to acquire funding. A good credit score reflects positively on your business. Try to work with other companies and suppliers that also have good credit to ensure that they are reliable and will be able to meet their current and future obligations. Dun and Bradstreet (http://www.dnb.com/) can be used to view credit reports of companies. A good credit score can help a small business develop good relations with lender and suppliers for future projects.
Read more about how credit scores affect small businesses in Gary M. Stern’s article “Knowing your Credit Score Can Pay Off”
“When your debt goes up, your score goes down. When you pay a little off it goes the other way around.”
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Note: The preceding post was written and researched by students in my Honors Marketing 351, Fall 2011 class, from the Mihaylo College of Business and Economics, Cal State Fullerton University, Fullerton California. Many thanks to their time, talent, and contributions to both their career and this marketing blog. Go Titans!
For a small business, selling to a well-known retailer is key in promoting their product towards a large customer base. Retailing is all activities directly related to the sale of goods and services to the ultimate consumer. If small businesses cannot manage to open their own retail locations or make a profit by selling directly to their customers, they can always sell their products through larger retailers, such as Starbucks. Starbucks falls under the specialty store which specializes in a certain type of merchandise; in this case coffee, tea, snacks, and a relaxing atmosphere.
In the article, A Small Player Breaks Into Starbucks, a perfect example of retailing is demonstrated by Daniel Lubetzky, CEO of KIND Fruit + Nut Bars and Starbucks Corporation. Lubetzky’s retail marketing plan was to choose the proper promotion strategy, location, and presentation of the retail store, also known as the retailing mix. He persisted in selling his products to Starbucks because he believed the brand fit perfectly with his product. Both Starbucks and KIND aimed to appeal to the health conscious customer, making the implementation of KIND bars ideal.
KIND Healthy Snacks offered its product, Fruit + Nut bar, to Starbucks locations. The goal of the promotion strategy for KIND Healthy Snacks was the same for Starbucks: to help position the product in the consumers’ minds. Starbucks, as a retailer, tends to use public relations and publicity at the forefront of its promotion strategy capitalizing on giving back to the community and helping non-profit organizations. As a proper location, KIND Healthy Snacks chose a ‘store within a store.’ This is a method for smaller specialty lines to bring their products inside larger stores while expanding retail opportunities without risking investment in an entirely separate store. Although KIND Fruit+ Nut Bars is not a complete store within Starbucks, it is still a way for this specialty line to sell within the larger corporation without taking on additional risk.
A small business sometimes needs the help of a well-established organization to climb up the corporate consumer ladder. In the case of Lubetzky’s KIND bars, Starbucks was the reputable organization that lifted the brand up the ladder.
Note: The preceding post was written and researched by students in my Honors Marketing 351, Fall 2011 class, from the Mihaylo College of Business and Economics, Cal State Fullerton University, Fullerton California. Many thanks to their time, talent, and contributions to both their career and this marketing blog. Go Titans!
For small businesses, there is an inclination to have a narrow focus on persuading customers, closing sales and moving onto the next project, at the expense of delivering value to the customer. This traditional approach to selling has many drawbacks, and does not have the advantages of relationship selling.
Aggressively focusing on closing sales, instead of meeting the needs of customers, results in short term relationships and dissatisfied customers. In these situations, the objectives of the seller and those of the buyer often do not match and a win-lose situation is created. This traditional approach is also likely to result in cognitive dissonance, or buyer’s remorse, whereas relationship selling would help prevent this kind of reaction by communicating with the buyer and addressing their needs.
One key benefit of relationship selling is that both the seller’s and the buyer’s objectives are met. Instead of trying to persuade a buyer, a sales team identifies and fulfills a buyer’s need. This kind of selling results in long term relationships with buyers and consumers, that come from mutual trust developed through the delivery of valuable goods and services. Relationship selling does not just take place at the point of sale. It occurs through a series of services geared towards insuring satisfaction.
A major advantage of relationship selling is that it draws loyal customers by developing trust and delivering value. Building a base of loyal customers is important because it can be up to 10 times more expensive to attain new customers than it is to retain previous ones. A good example of a firm that has made a commitment to relationship selling is CarMax:
In this commercial, CarMax uses metaphor to demonstrate its implementation of relationship selling. A gas station customer is approached by workers who service his car and he reacts with skepticism, believing that his car is being stolen. This highlights how CarMax focuses on servicing customers and delivering value with integrity, when business-customer relations have been largely scrapped of customer service. Car Max’s website also conveys their commitment to relationship selling; their About Us section states how they emphasize “trustworthiness and ethical practices”, and hold “quality, customer service, and communication” as some of their core values. CarMax also offers extended warrantees, which help develop positive relationships and prevent customer dissatisfaction. All of these facets demonstrate how CarMax has made it a point to develop a relationship with its customers.
Relationship selling makes the seller more of a consultant and problem solver for the buyer, as opposed to a traditional seller. Positive customer-salesman relationships have been shown to contribute to the trust, loyalty and intent to repurchase among buyers. Taking on the challenge of developing relationship selling can bring many benefits to small businesses. If you make the effort to personalize sales, deliver value and foster trust with your buyers, relationship selling can help make a difference for your small business.
Comments?
Note: The preceding post was written and researched by students in my Honors Marketing 351, Fall 2011 class, from the Mihaylo College of Business and Economics, Cal State Fullerton University, Fullerton California. Many thanks to their time, talent, and contributions to both their career and this marketing blog. Go Titans!
In 1966, a small publication in Philadelphia was the first to refer to the day after Thanksgiving as “Black Friday.” Since the 20th century, Black Friday has turned into the biggest shopping event of the year, with die-hard shoppers waiting days in advance outside of their favorite stores. It wasn’t until recently that Black Friday became associated with companies “staying in the black,” or making a profit.
This year Walmart has chosen to advertise its Black Friday promotions earlier than ever. A physical catalog through direct mail and a digital catalog at Walmart.com were released this past Thursday, November 10th. Along with the catalog consumers have also been exposed to a YouTube video called “The Walmart Report,” which emphasizes Walmart’s Black Friday hours and specials:
Walmart has a strong social media presence, including highly interactive Facebook and Twitter pages. Retail giants such as Walmart look to social media as a way to increase awareness of their deals and gather customer feedback. On Twitter and Facebook Walmart already released their Black Friday deals, far in advance of TV and print advertisements. By giving “fans” of their Facebook page and “followers” of their Twitter page an exclusive first look, Walmart provided value to their customers. The early Black Friday buzz has been substantial for traditional media and online coverage to an overwhelming popularity among bloggers. Sites such as Blackfriday.com even threw a Twitter party so fans could discuss the deals after they were announced.
In terms of pricing strategies, most retailers use Black Friday as an opportunity to implement a sales-oriented pricing strategy. Once Thanksgiving is over, consumers tend to start shopping heavily for the holidays. Retailers use Black Friday and the weekend to lower prices and maximize their sales. The companies hope to increase their market share and clear out large amounts of stock at low profit margins to increase total revenue.
With its already low prices, Walmart is implementing a status quo pricing strategy. While Walmart may be able to beat competitor’s low Black Friday prices, they are settling with matching them. Walmart recognizes that stores will be flooded with customers on Black Friday, so attempting to beat competitor’s prices will not increase store traffic. Leaving prices above those of competitors, however, will turn customers away.
Walmart faces a plethora of competition in the retail industry. With Black Friday, they are also competing with consumer electronic giants such as Best Buy and Fry’s Electronics. One main strategy Walmart is using is to open at 10pm Thursday night instead of traditionally midnight or early Friday morning. In fact, this strategy can generate more sales because consumers will go to Walmart before shopping at competitor’s stores. Walmart has also developed a dual-time strategy, where some products are sold at 10pm and electronics at 12am. While waiting for the big discounts on electronics, consumers will buy the other items on sale.
It is clear that social media and pricing strategies have played a monumental purpose in achieving sales and maintaining customer relationships. If used correctly, companies can become extremely successful in their industry just like Walmart.
Comments?
Note: The preceding post was written and researched by students in my Honors Marketing 351, Fall 2011 class, from the Mihaylo College of Business and Economics, Cal State Fullerton University, Fullerton California. Many thanks to their time, talent, and contributions to both their career and this marketing blog. Go Titans!
