A small business differs from a big business largely on the scale of operation. A small business does everything that a big business does but only on the smaller scale with a more personal touch to the activity. Still, there are tools of big business that a small business can also use. In this article, I will talk about 3 such tools. How you use these tools will determine how much you succeed in your marketing effort.
SWOT stands for Strength, Weakness, Opportunity, and threat. Strength and weakness is internal to the product, whereas, opportunity and threats are external to the product. We use this matrix to find out strengths and weaknesses of our product, see what opportunity (matching our ability) the market is presenting, and gauge the threats presented by the market.
PLC stands for Product Life Cycle. A PLC study of your product gives you an idea about what stage your product is in, and what marketing channel and strategy to use. We divide PLC in following parts: introduction, Growth, Maturity, and Decline.
Introduction is the phase when the product is introduced to the market, and the organization is striving to create awareness about the product. Profit in this phase is either negative or low.
Growth is the phase in which the product gets acceptance, which results in increase in sales. Profits are high in this phase, and to cash in on the momentum the product has got, organization tends to invest some advertising dollars.
Maturity is the phase when sales start slowing down because most of the buyers have your product. Sales and profit has already passed its peak. Sales and profit may not be increasing but they are steady.
Some marketers divide this phase into early maturity and late maturity to figure out how close the product is to decline phase.
Decline is the phase when sales and profit both starts falling. It could be because the need of the market has changed and some better product is fulfilling that need, or because some other product is meeting the same need at lower cost.
From this phase either the product dies out in oblivion, or get reinvented, reintroduced and pushed on the growth track.
Some call it PEST while other calls it PESTEL. I have taken PESTEL because it is more complete a matrix then PEST. PESTEL is a macro-environment scanning matrix that helps a business find out how the various external factors going to affect it. PESTEL Stands for:
P: Political factors (Policy changes and how it is going to affect you)
E: Economic factors (economic growth, exchange rates, inflation, interest rates, and taxation changes are going to affect your business)
S: Social factors (How does social changes like, education, demographic, occupational, etc., going to affect you)
T: Technological factors (How advent of new technology will affect your business)
E: Environmental factors (How change in climate or rising temperature can affect your business)
L: Legal Factors (how change in legal environment going to affect your low. How much will your business suffer if the carbon emission level is set lower, and government pension plan is made mandatory for every organization, regardless of size?)
PEST matrix analyzes all the factors we discussed above except for the last two.
Tags: Big Business, Decline, Marketers, Marketing Business, Marketing Channel, Marketing Strategy, Marketing Tools, Matrix, Maturity, Momentum, Opportunity, Peak Sales, Personal Touch, Product Life Cycle, Profits, Small Business, Strength And Weakness, Strengths And Weaknesses