Many owners of small businesses assume that taking the time and effort to come up with a strategy for marketing their firms’ goods and services is just too complex and expensive an undertaking. They assume notions of “marketing strategy” and “competitive advantage” are fancy textbook terms reserved for only the giant companies with large marketing and sales staffs. These assumptions are plain wrong. Without effective marketing strategies for small business, such firms will generate lower sales and incur more expenses as they take too many random steps down blind alleys that simply do not lead to increased revenue.

To decide on a set of plans and marketing elements that will form the small company’s marketing strategy, owners must first do some homework. They must get a sense of what the demand (potential sales and customer count) is for the product/service they sell, they must know what their relevant competitors are doing in the market, and they must know what their target market looks like. This latter point cannot be overstated—if small-business owners do not know what the needs, wants, and characteristics are of the customers and clients that they can realistically reach, they will have a very hard time communicating a meaningful value proposition to that target market.

Equipped with this information about their target market, demand, and competitors, small-business owners are ready to start making realistic action plans and setting basic policies. In the broadest sense, marketing strategies for small business are geared toward competing either through well differentiated product/service quality or through low-cost appeal. Depending on the needs of the target market, either broad strategy can work, and choosing one or the other then guides the owner’s planning for quality, pricing, distribution and delivery, and promotional communications. All these marketing elements need to be defined and planned in keeping with the major strategic thrust chosen.

The big competitors can choose to compete very ruthlessly on either price or quality, of course, so how can marketing strategies for small business be adapted to this threat? Owners should consider a niche strategy, at least while their firms are still small. Finding a profitable slice of the target market that the small business can serve with particular skill, particular attentiveness, and particular speed leverages the small business’s relative nimbleness and flexibility in a way that eases downward pressure on price and increases customer loyalty.