Everyone predicted the demise of Bass Bakery in Baker, Louisiana.  Walmart came into the area and destroyed several small businesses. Bill Bass, the bakery’s longtime owner, knew he needed to do something different.  He saw his friends who were in business ignored Walmart; his friends banked on loyalty from their past customers. They were disappointed.  Bill called in his five sons to develop a plan. 

Bobby, who was his youngest son and who had graduated with a marketing degree, talked to his father about implementing three different marketing strategies.  One strategy was to sell 2-3 days-old baked goods to low-cost customers; a differentiation strategy was to sell premium-priced goods with home delivery to affluent customers; a niche strategy was to sell local berry products that Walmart could not offer. With no options left, Bill implemented his younger son’s plan.  This combination of strategies worked so spectacularly that Bass Bakery became more profitable than ever before.

How are you going to stay in business if you do not make significant adjustments?  Today’s small businesses need to retool their business strategies. Marketing plays a critical role. Yet, poor planning can hurt a business’ attempt to make a profit. Dr. Frank Rothaermel, the author of Strategy Management, writes: “A business strategy, therefore, is more likely to lead to a competitive  advantage  if it allows a firm to either perform similar activities or offer similar products or services at lower costs.”  This article examines how small businesses should formulate a marketing strategy that is tailored to their intended customers. 

The pandemic continues to wreak havoc on the U.S. economy. Small businesses are no exception. According to a 2020 survey of more than 5,800 small businesses, the pandemic has caused massive dislocation among this business sector. The survey found that 43% of businesses had temporarily closed, and nearly all of these closures were due to COVID-19.  Thus, businesses that have not made sufficient adjustments in their planning and strategy are at a disadvantage.  Sadly, some individuals start a business with lots of passion and knowledge, but without a plan. With good planning, many businesses can avoid the pitfalls that drive some businesses to failure.

Successful businesses implement a marketing strategy. Dr. Michael Porter outlined three types of generic strategies: low cost, differentiation, and niche-focused. The low-cost strategy allows a business to use low pricing to stimulate demand and gain market share. This strategy requires companies to maintain especially tight control of their costs. An example of the low-cost strategy in the fast-food industry is McDonald’s.

The differentiation strategy is an approach in which companies attempt to set their products or services apart from their competition. Businesses must find ways to distinguish their products from other similar products by developing uniqueness through product design, features, quality, or other noticeable factors that attract customers.  For example, Burger King attempts to distinguish itself from McDonald’s and other competitors by offering flame-broiled burgers. 

Finally, businesses can employ a niche strategy that targets a specific sub-group of customers or focus on serving a particular area. Most small businesses want to protect themselves from too much competition by targeting a specific group of buyers.⁵ Although large organizations may have more financial resources, their size makes it difficult for them to adjust to market forces. Therefore, being small and nimbler has its advantages. 

To formulate the appropriate marketing strategy, small business owners must address the following questions:

• What are the specific customer segments? 
• What markets do you currently own and what is the future outlook for those markets?
• What are the customer needs, wishes, and desires that you can serve?
• Why do you want to satisfy these customers?
• What is the value of your product/service to customers?
• How do you distinguish your products from those of your competition? 
• How do you plan to satisfy these customers?

In closing, the pandemic and the financial crisis have ruined many small businesses.  Unfortunately, some business owners have not adjusted.  Yet, changing customer expectations and stiff competition have put more pressure on small businesses. Successful small businesses want to stay ahead of their competitors.  Nike Emeritus Chairman Phil Knight explains, “I may be over the top on this, but I just don’t want to be like my competitors. I want my people to believe that whenever our competitors succeed, we will be less able to do all the things we want to do.”  This article discussed how and why today’s small businesses must go about crafting a marketing strategy that is tailored to their intended customers. An effective marketing strategy can be a game-changer for small business owners.  Let’s pray that it is not too late.

© 2021 by D. D. Green

About Dr. Daryl Green:

Dr. Daryl Green provides consulting, guidance and management training for today’s small businesses. He holds the Dickinson Chair in the College of Business at Oklahoma Baptist University. He has assisted more than 100 organizations across the nation in the region with marketing and management expertise. If you would like more information about this article or business assistance, please contact Dr. Green at drdarylgreen@gmail.com or visit http://www.drdarylgreen.com.

Hilton Smith, a 60-year-old business owner, was a staple in his local community. His store of 100 years had passed 6 generations of owners. The business had seen good times and bad times. While his youngest son (a business degree) tried to help his dad adjust to the changing landscape, Hilton rejected these ideas, including having a website and developing a social media presence. Hilton barked at the idea of interacting with his customers virtually instead of in-person. Covid-19 hit the community. Lockdowns occupied. Hilton put a sign on his front door: “CLOSED INDEFINITELY!”

Bringing in a New Year creates a sense of renewal and opportunities. Yet, many small businesses have a ‘wait and see’ attitude riddled by uncertainty and unpredictability of the future. Most organizations have limited resources and must be cautious about their business growth. However, if small businesses were given a master list of areas to improve based on market forces, these companies would be in a better position for the upcoming year. This article examines the seven critical trends that small businesses should consider in the economy to better manage market disruption in their organization.

With the uncertainty of a new presidential administration in the United States and the lingering impacts of Covid, many organizations should rethink their business strategies. Small businesses are no exception.  According to a business study conducted between March 28 and April 4, 2020, small businesses have been heavily damaged by the lockdowns due to Covid-19.  In an analysis of more than 5,800 small businesses (reaching a network of 4.6 million small businesses), the research highlighted the damage caused by the pandemic. At this juncture, 43% of businesses had temporarily closed, and nearly all of these closures were due to COVID-19. Respondents stated that they had temporarily closed, largely pointed to reductions in demand and employee health concerns as the reasons for closure. In fact, the businesses, on average, reported having reduced their active employment by 39% since January. All industries have been impacted.  

Why evaluate emerging trends as a small business? Many larger companies can withstand the destructive nature of disruption in the marketplace. However, small businesses are more vulnerable. While incremental change is often slow and predictable, disruptive change can be characterized as rapid and unpredictable. These traits of disruption bring uncertainty into the marketplace. Managers worry. With market disruption, experience can be seen as a liability. McKinsey expert defines market disruption as “a profound change in the business landscape that forces organizations to undergo significant transformation rather than steady incremental changes.” Historical examples can be found in transportation (i.e., horse carriage to the automobile) to communications (i.e., telegraph to the Internet). Furthermore, the fact that nearly 9 of every 10 Fortune 500 companies in 1955 are gone today demonstrates the significance of market disruption. Yet, savvy businesses can take advantage of disruption if they understand the principles. Dr. Clayton Christenson, the author of The Innovator’s Dilemma, argues the opportunity brought by disruption: “Disruptive technologies typically enable new markets to emerge.

Looking ahead to 2021, there are seven trends that small businesses should consider. Yet, nearly a year after this pandemic, the full impacts on the U.S. economy are not fully clear. Small businesses should review the following trends to capture new, unmet customer needs in the future:

• Global Market – We are connected! Small businesses can tap into resources worldwide, whether searching for new customers in emerging markets or locating talent for hire. According to the Global Trends 2030: Alternative Worlds, individual employment will accelerate due to globalization.
• AI and Automation – Artificial intelligence is a disruptive technology. Companies can avoid the high expense of labor through automation. According to a 2013 Oxford University study, nearly half of American jobs are at risk of being taken over by computers by 2033. Small businesses can leverage technology by empowering their employees to utilize AI where appropriate so that that technology is not viewed as a negative.
• New Work Model – 2020 brought in the explosion of working from home due to Covid-19.  Employees already wanted to have more flexibility in life. They got it from employers. Companies responded by offering 70% of full-time workers the ability to work from home!
• Freelancing – Freelancing is part of the gig economy. It goes much further than Airbnb and Uber. In the gig economy, businesses hire independent contractors to perform individual jobs, called “gigs.” The total freelancing income is almost $1 trillion. With the gig economy, small businesses can find the necessary talent without the burden of full-time employees.
• Digital & Ecommerce – Covid-19 ushered the digital economy.  If companies did not have a digital platform in 2020 with the lockdowns, they did not exist.  According to the Internet World Stats, there are currently 4,208,571, 287 internet users. Small businesses cannot afford to miss this continuing trend of digital platforms.
• Changing Career Landscape – Due to market disruption, the employers’ needs continue to evolve, especially driven by automation and technology trends. Employers cannot afford to utilize unmotivated employees. They want self-starters. The National Association of Colleges and Employers (NACE) has identified eight competencies associated with career readiness. Sadly, most students are not aware of employers’ expectations of career readiness competencies. With that said, small businesses will need to keep up with the changing workforce in the United States.
• Continuous Learning – Keeping up with the latest trends and disruption requires a learning culture in organizations. Therefore, a trained employee pool is essential, especially during disruptions. With the numerous non-traditional learning platforms like Udemy and MOOC, individuals can stay up to date and advance their skills. Small businesses should be embracing this trend.

Today’s small businesses and entrepreneurs must retool themselves, given the potential impacts of Covid-19 have the necessary capacity to change their way of thinking because of their passion. Disruption will be the word of 2021 as organizations consider the impacts of Covid-19 in 2020. This article discussed the seven critical trends that small businesses should consider in the economy to better manage market disruption in their organization. While larger organizations may survive the impacts of market disruptions, most small businesses cannot. By taking the necessary steps to understand these market trends and maximize capturing unmet needs in the market, small businesses can make a positive investment in their future. Let’s pray that it is not too late.

© 2021 by D. D. Green

About Dr. Daryl Green:

Dr. Daryl Green provides consulting, guidance, and management training for today’s small businesses. He is the Dickinson Chair at Oklahoma Baptist University. He and his students have assisted more than 100 small businesses in the region with marketing and management expertise. If you would like more information about this article or business assistance, please contact Dr. Green at drdarylgreen@gmail.com or visit http://www.drdarylgreen.com.

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“The Impact of COVID-19 on Small Business Outcomes and Expectations” by Alexander W. Bartik, Marianne Bertrand, Zoe Cullen, Edward L. Glaeser, Michael Luca, and Christopher Stanton

“What is Market Disruption?” by Becky Kelderman