3.2.4 Reasons for staying small

Question 1

What is a small business>

Answer 1

-Small + medium sized businesses (SMEs) is any business w fewer than 250 employees.
-Micro-businesses are businesses with 0-9 employees.

Question 2

What are the benefits to a small business of differentiation?

Answer 2

-Creates value; highlights quality/durability.
-Non-price competition; will focus on other ways of attracting customers, e.g. taste + style.
-Brand loyalty; can gain customer loyalty.
-No perceived substitute; one that focuses on quality + design may give the impression that there are no suitable substitutes in the mkt.

Question 3

How are USPS beneficial to a small business?

Answer 3

-It’s a way of promoting the features of the product/service of the business; quality, customer service, delivery, price, technical features or functions.

Question 4

What is the benefit to a small business of flexibility in responding to customers’ needs?

Answer 4

-A small business can gain significant comp adv over larger companies if it responds quickly to customers needs.

Question 5

How can a small business be flexible in responding to customers’ needs?

Answer 5

-Carrying out research into opinions, looking at customers websites.
-Gaining feedback; forums, polls, users, groups online communities.
-Track social media discussions about the products.
-Collect data on customer transactions.
-Collab w customers to produce new products/services.

Question 6

How can a small business survive through customer service?

Answer 6

-Consumers appreciate businesses that give them more for their money, especially when times are tough.
-Efficient service, fast delivery + flexible payment terms will help to persuade customers to spend with them rather than a competitor.

Question 7

How can a small business survive through E-commerce?

Answer 7

-Small businesses can sell successfully through 3rd party websites, e.g. EBay + Amazon.
-Large consumer base shop on internet.
-E-commerce is always growing.