In order for your business to succeed, you generally need to promote your products or services to the same buyers that your competitors are targeting. Even if your business is one-of-a-kind, you still need to tell target buyers that your business exists with some kind of advertising or promotional communication. Public relations (PR) activities are another way to promote the image or reputation of your product. PR is similar to promotion and advertising, but can be more indirect, since some or all of the publicity a company's products and services receive from public relations activities may not be controlled by the company.

For a single small store with direct sales to buyers/end users, going through the exercise of deciding on appropriate distribution and sales force choices may yield new sales and volume gains. For example, Teddy Bear's Flower Shop research finds that most of its customers are located within a radius of a half to one mile of the flower shop.

In some cases, a small business can pursue distribution into several different channels. However, most small businesses must prioritize distribution channel and sales force options over several years of growth and evolving resources for the company. For example, food supplements and vitamins are sold through a multitude of channels, including:

Distribution systems may evolve over time as a business grows and changes. Consider a small one-store family restaurant named Alice's, with delicious, unique, homemade salad dressings (e.g., Pomegranate Vinaigrette, Rum-Raisin-Orange Ranch, Blue Cheese Catalina). Initially, the dressings were only available to customers eating at Alice's. Then customers begin requesting bottles to buy. Initial sales and distribution of Alice's Salad Dressings were from the restaurant to walk-in customers. The product was packaged in a 32-ounce canning jar with a handmade label.

A small company must work harder at focusing limited resources, especially with distribution and sales force options. In some cases, the only sales force option is for the owner to do it himself or herself, as in a small retail shop, or consulting/service businesses.

Obviously, financial resources and cost-effectiveness are important in considering distribution and sales force options. What can you afford, and what will give you the most bang for your buck?

Our independent architect who specializes in designing residential homes, Life Designs, has a strengths, weaknesses, opportunities, and threats (SWOT) list that includes:

Once you have selected and developed a unique product or business idea, correctly positioned and targeted it to buyers, and developed your packaging and pricing, the selection of distribution channels and sales representation is key to successful marketing.

Strength and weakness analysis is an internal company exercise to gauge your ability to compete effectively. Opportunity and threat analysis is an external exercise centered on competitors and the external environment that affect a company's ability to compete effectively. Taken together, they are referred to as SWOT analysis.

Small businesses may face a particular difficulty in identifying their directly competitive selling channels, not usually in identifying where target buyers buy competitive products.

Whole Planet Beverages, Inc., wants to determine the correct product pricing for a new 12-ounce bottled flavored tea beverage distributed through DSD (Direct Store Delivery) distributors. The optimum price will:

Final pricing levels for products should have flexibility for both increases and discounts to customers. Price increases may be inevitable because of component, ingredient, and processing cost increases. The market may or may not absorb price increases without decreasing volume effects.

In addition to the primary goal of making money, a company can have many different pricing objectives and strategies. Larger companies may utilize product pricing in a predatory or defensive fashion, to attack or defend against a competitor.

Consumer goods experts suggest the estimated cost of goods should be no more than 15 percent of the suggested retail price because:

Retailers and wholesalers need to consider the issue of markups in their pricing structure, and manufacturers or other product producers need to be aware of the average markup in their industry.

The probability of significant sales volume differences at different prices depends upon the price elasticity of the market and number of similar competitors.

The most common errors in pricing are:

Many product categories have significant evolution and life cycles that may affect pricing decisions.

Small businesses may have products that would appeal to many different markets or channels of distribution in a single market. However, when you have limited resources, it's often best to select a single distribution channel or a limited number of distribution channels that offer:

The closer your product resembles competitive products, the smaller the price differences that buyers will tolerate. And the less the product differences between brands, the greater the probability is that the category is price-elastic, and that brand-switching will occur when products go on sale.

If demand for your product or service changes significantly with slight changes in price, the product category is considered to be elastic with respect to price. If no significant volume changes occur, even with significant price changes, the category is inelastic.

In setting prices for your product or service, one of the first calculations you must do is to estimate approximately how large your potential sales volume could be, based on a reasonable assessment of your potential market share in the product category, at different price levels. Knowing the size of the existing market is critical to determining if there are enough customers to establish and grow a business.

The ideal price for any product or service is one that is acceptable to both buyer and seller.

A precise definition of your target buyer is key to designing a package that reflects your buyers' values and will attract buyers to it on the shelf, or wherever else your products or services are available. Knowledge of the target buyer's lifestyle as reflected in the buyer's activities, opinions, interests, and demographics can be manifested in the package names, label design, package copy, and other key communication points.

Packaging can be simple cardstock tags printed or stamped in black ink (e.g., on machinery, tools, clothing, etc.), or unique, one-of-a-kind containers that are more valuable than their product contents (e.g., imported, hand-blown crystal oil and vinegar cruets).