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ROLE OF MARKETING IN SME – III

Product Mix

It refers to number of products offered by a company. It is not uncommon to find small firms selling ultiple products. Product mix is done to optimize profits.

Advantages of product mix

1. It enables the firm to serve different segments of the market.
2. It gives steady sales & profits to the firm.
3. The firm can keep all its bases covered.

Demerits of Product Mix

1. It makes greater demand on firm’s resources in the form of increased investment in production facilities and inventory.
2. Marketing Problems.

The firm should weigh the pros and cons of a wider versus narrow product mix. The ultimate decision would rest on such considerations as the available resources, existing and future market opportunities and strategies of competitors. Phillips kotler has suggested the following indicators of firm’s sub optional product mix;

1. Disproportionately high percentage of total profits from a few products;
2. Insufficient product breadth to exploit sales force;
3. Excessive productive capacity on a chronic or seasonal basis;
4. Steadily declining sales or profits.



Read more: MGT601 - SME Management - Lecture Handout 34

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GUIDE LINES FOR APPROACHING LENDERS – II

What a Bank Needs to Know About You

This section discusses the information lenders may need to have before they can assess your request for finance. As stated earlier, it is good to policy to be as open and transparent with your bankers or financial advisers as you can. This will enable them to grasp the full situation and to give you appropriate advice. To withhold important information, such as your possible liabilities with other lenders or the fact that you have already pledged your assets, may cause difficulties at a later stage.

General Credentials

If the leader you have approached does not already know you well enough, it is best to have some general background information ready. This may include the following:

1. Letters of introduction
   If you are relatively new in business and not yet known in your business community, you may find it worthwhile to seek the sponsorship of someone respected by other business people who is sufficiently acquainted with you to be able to give you a reference. A short letter, setting out your achievements and testifying to your good character and integrity, is a traditional method of introduction. Its effect will be positive if the referee is a person well regarded in the business community.
2. Your Profile
   This is a resume or curriculum vitae, setting out your educational achievements, professional training, qualifications and experience, and your employment record and achievements. It is a helpful introduction to you and need not be longer than a page or two. If you are a newcomer to the business community, your profile will help your bank to assess your capacity for conducting trade, producing goods and services for export, and managing people. You may also want to attach to your profile any certificate or reference from former employers if you feel this will help to show up your experience and capacities, especially if the employer is known and respected, and has written favorably about you.



Read more: MGT601 - SME Management - Lecture Handout 21