Small Business Needs to Do Term Paper

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" (2008) Hoagland asks the final question of whether the marketing message "...provide[s] an immediate offer? (2008) Hoagland states that the marketing plan, if it is to be effective must contain: (1) a marketing message that has the element that (2) interrupts; (3) engages; (4) educates; and (5) offers.

The work entitled: "Beating Goliath" published in the Smart Business Magazine relates the story of Mike Abt and his success in keeping his electronics business ahead of the big-box competition. The report states that Mike Abt "as the president of Abt Electronics, the largest single-store electronics and appliance dealer in the United States, besting the competition is his passion. From beating the big-box retailers on price to having an exceptional Web presence and creating an engaging in-store experience, Abt has used traditional and not-so-traditional techniques to draw customers in and keep them coming back." (Wurzinger, 2006) Wurzinger states that it is a well-known fact that in the retail business, the easiest way to attract customers away from your competition is by offering the best practice." (2006) the way to achieve this is by making purchases in bulk, which is generally quite a challenge to the smaller business operations. The Abt Electronics store, while being only a single store has a showroom covering "350,000 square feet, making it large enough to move inventory en masse and allowing it to buy in build and negotiate deals with vendors." (Wurzinger, 2006)

According to Mike Abt the method he uses to keep prices low are through savings in "operating and marketing costs." (Wurzinger, 2006) Abt states that compared to his competitors he has "very little overhead...We spend under 1% advertising and the average person in our industry is spending 7% advertising." (Wurzinger, 2006) Abt states that advertising through the method of "having good word of mouth" is how Abt Electronics realizes the largest savings. Furthermore, the efficiency realized by having only one location saves a great deal in expenses and Abt states: "people drive to us, we don't build stores where they are." (Wurzinger, 2006) Furthermore, there is the company's attitude regarding maintenance and upkeep because Abt Electronics does not "outsource the care and maintenance of its delivery trucks, repair services on the products it sells or its own building maintenance. By doing it all on its own the company saves money and passes those savings on to the customers." (Wurzinger, 2006) Also stated as a factor is that with the company's single store format the company is enabled to a greater level of flexibility and "by remaining small, it is able to adapt to the industry changes more quickly than its competitors can, and its' also willing to take risks." (Wurzinger, 2006) Abt states that the business owner or manager has to be aware in that it is necessary to know what is going on the industry in relation to products and services. It is this "openness to change" that resulted in Abt Electronics presence on the Internet Abt states that his company is "really into information and sharing, and we knew that in the old days, appliance people would go to books and look up specs. We did it first just to get information to the salesman so they could give it out to the customer. Then outside people came to it. We were one of the few appliance guides." (Wurzinger, 2006)

Wurzinger states: "Recognizing the sites draw, in 1997 the company expanded from an online product information guide to a complete online appliances and electronics store." (2006) in order to overcome the fact that on many consumers sites concerning shipping charges resulting in cancelled orders, Abt Electronics has the practice of charging one flat shipping rate to anywhere in the continental United States. Abt Electronics has realized success due to the strategies related in addition to being able to reach consumers throughout the United States. This has enabled the store in external growth through business expansion to other states without having to open a second store. Additionally, the company can sell more inventory that it has room to store. The report states that Abt relates that customers who visit online prior to their visit to the store is approximately 80% of the total customer-base of Abt Electronics. Online shopping at Abt Electronics provides a streamlined manner of shopping for customer as well. Abt Electronics motto is: "The answer is yes to any reasonable request" meaning "that if the customer wants something reasonable...the company does it, no questions asked." (Wurzinger, 2006) Proper delegation of authority is key for Abt Electronics as the employees are empowered to satisfy their customers honoring all reasonable requests without having to obtain supervision's agreement. Customer service is a key ingredient as well in the strategy and plan of Abt Electronics as providing the customer a positive memorable experience is what it takes to have customers returning again and again to the store.

In June 2007, United Hemispheres magazine published a report entitled: "Small Business, Big Impact" which states: "A variety of trends are converging to debunk the 'bigger is better' myth. One of the most powerful is the backlash against big-box chain stores and impersonal corporations. Recent statistics certainly make a compelling economic case for locally owned and operated businesses. Civic Economics, a Chicago-based consulting firm specializing in sustainable economic development, performed a series of "Livable City" studies in Austin, Texas; Toledo, Ohio; and Maine's midcoast region. They found that local merchants routinely generated three times as much local economic activity, adjusted for revenue, as chain stores." (Fredman, 2007) Additionally stated is: "For every $100 consumers spent with a local firm, $68 remained in the community, compared with $43 from a chain firm. For every square foot occupied by a local firm, the local economic impact is $179, compared with $105 for every square foot held by a chain firm." (Fredman, 2007)

Capitalizing on these types of statistics when advertising is important for informing consumers and bringing consumer support to small businesses throughout the United States. As of 2005, the U.S. Small Business Administration states that the United States has "reached a new high of roughly 26 million..." small businesses in existence. It is necessary to consider the perceptions of consumers as related to small business owners as it is stated that "the perception of these small business owners as 'hippie throwbacks' who just want to get out of the mainstream is off the mark..." (Fredman, 2007) in fact, the report states that in reality "Many are sophisticated entrepreneurs who are balancing financial and lifestyle concerns and who are beating the big guys on their own turf." (Fredman, 2007) it is reported by one business owner in this study that half of his time is spent on "nonprofit work" and the report states that "many local owners similarly devote their extra hours to community organizations, and they find that in their efforts to live a more meaningful life, they get back as much as they give." (Fredman, 2007) the author of the work entitled "The Small Revolution: How Local Businesses are Beating the Global Competition" that it is possible for small businesses to leverage the knowledge of local individuals in order to "provide personalized goods and services. The results is customer relationships built on trust that can last longer than those dependent on deeper discounts." (Fredman, 2007)


This work has reviewed literature in the area of small business and its' competition against the 'big box' retailers such as Wal-Mart and K-Mart. The literature reviewed has demonstrated various strategies, which have been found to be effective for small businesses in competing against the big box companies. While this work had intended to present this information in three sections and specifically management, marketing and service, the research has demonstrated that it is not realistically possible to divide these three categories neatly because each category blends over into the other two strategically.

It has been noted in this study that the small business should not avoid locating near the big box retailers and that it is in fact to the advantage of the small business to do just that. Secondly, it is critically important that the small business stay abreast of the competition's sales advertisements, product-base, and other aspects of the big box store. In other words, the small business needs to know the competition well because it is impossible to compete unless the company knows what it is competing against in terms of products and services.

Development of a strategic plan has been noted in this study to be critically important. Next, the business must know that the use of that plan in guiding the business is just as important. Management needs to really know how the business wants customers to be treated and to this end the work of Mizer has been reviewed which relates that management should "think Mayberry" and require that all employees…

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