SME business'

Introduction

Marketing is one of the terms in academia that does not have one commonly agreed upon definition. However “in a nutshell it consists of the social and managerial processes by which products, services and value are exchanged in order to fulfill individual's or group's needs and wants”(www.wkipedia.org). Small and Medium Enterprise (SME’s) are defined as businesses with less than 250 employees. SME’s play an important role in marketing as they are recognised as making a major contribution in innovation and employment. This piece of work will be focusing on two SME companies: Ludlow Thompson and Douglas and Gordan. We will aim to identify the nature of the marketing environement within which both of these companies operate, we will also analyse the internal and external marketing problems and develop solutions for overcoming such problems. Finally we will apply appropriate marketing techniques to these two companies contexts.

Identify the nature of the marketing environment within which they operate

Ludlow Thompson is an independent residential estate agency established in 1993 with nine offices across London. Ludlow Thompson sold/let £880 million worth of property just in last year alone (April 05-April 06). They are also the leading edge internet estate agency. “Which means they can find, let and sell property to more people than ever before.” (www.ludlowthompson.com). It manages a substantial portfolio of residential developments in and around the south east and west of London and they continue to attract new clients daily. Their services include selling, letting, renting, buying, buy-to-let and financial services.

Douglas and Gordon, established in 1958 is a London firm that offers a comprehensive residential property service including estate agency, property management and professional services, they have 15 offices in central and south west of London. They opened up their new head office based in Warwick Square in May 2001. In 2006 the number of properties sold increased by 28% over 2005 level.

These two estate agents do not engage in any other business practices, their main aim is to deliver the best possible service to both landlords and tenants giving clients peace of mind. Their highly trained team has a broad skill base, which enables them to supply the relevant professional support at every stage of each transaction.

Ludlow Thompson manages a substantial portfolio of residential development in and around the South East and West of London. They continue to attract new clients daily, ranging from private land loads and residential management companies to local, regional and national house builders (ludlowthompsom.com). Douglas and Gordon as an SME believe that team work is the key to achieving the very best price for them. They like to maintain the highest professional standards by conforming to the guidelines of the industry’s leading organisation (Douglas and Gordon.com).

Both estate agents operate in a fiercely competitive marketing environment.

The marketing environment refers to the “forces that directly and indirectly influence an organization’s capability to undertake its business. A business has no direct control over these forces but they shape the manner to which the business functions and is able to satisfy its customers”. (www.tutor2u.net).

Components of the marketing environment for Ludlow Thompson and Douglas and Gordon

Macro-environment (factors that influence the organization but are out of their direct control)

Government legislation

Small scale firms have little impact on their surrounds and have limited power to modify envirnmental ...

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Both estate agents operate in a fiercely competitive marketing environment.

Components of the marketing environment for Ludlow Thompson and Douglas and Gordon

Macro-environment (factors that influence the organization but are out of their direct control)

Government legislation

Small scale firms have little impact on their surrounds and have limited power to modify envirnmental forces to their advantage. “Classic economics would suggest that they accept their industry’s price and that their output has no impact on the overall market for their goods and services. In addition, they will seldom be able to exert a strong influence on suppliers, the legal fraternity, politicians or the local community” (Carson D 2005 pg 62).

Competitors – people already in the market
New entrant competitors- people just entering the market
Technology changes- must be able to adapt

The Internet has affected just about every company in the world and has also had a huge impact on the Estate Agents. A study conducted by Peter Bolton king, BBC News showed that 60% of the buyers reffered to the internet before making their purchases. As a result, they were able to know which company would give them a better deal.

Micro-environment

-Landlords that deal directly with estate agent. Supply the properties

-customers

- The 3i group plc is shareholders in Ludlow Thompson

Internal environment

availability of resources – are their enough funds available
allocation of responsibility

Marketing management ability to develop and maintain successful transaction with its target customers, market and public are affected by these competitive forces. This competitive marketing environment offers both opportunities and threats where this affects the company’s behaviour as a company. One opportunity could be the innovation of their services. All SME’s want change in order to grow. Growth being the ability to cope with change, is determined by new sales. In order for these new sales to be generated, marketing activity such as innovation can take place. These two companies are innovative. Their management data systems are computerised to support customers in providing an efficient service such that the customers are able to get what they want, when they want it.

Analyse the internal and external marketing problems and develop solutions for overcoming such problems

Analysis of internal and external problems for Ludlow Thompson

Regarding Ludlow Thompson, some of the internal problems faced by this company are that of training purposes, communication barriers and pre-judgment of their clients.

“Two major factors of marketing are the recruitment of new customers and the retention and expansion of relationships with existing customers.” (www.wikipedia.org) Training staff is essential for any company, as this will affect both the recruitment of customers and also the expansion of customers. Training staff impacts greatly, not only on the performance of the individual but also on the performance of the company as a whole. If staff are not trained customers will not be satisfied with the level of service the company provides. As a result customers will seek a better quality of service elsewhere. Ensuring staff are well trained is a simple and effective way to overcome this problem.

Communication barriers were a problem that was encountered by the group when we visited Ludlow Thompson estate agent. The barrier was between the estate agent dealing with our situation and the landlord. The estate agent was informed that we were looking for a 3 bedroom flat with double beds; however on arrival we found it was in fact to be a 3 bedroom flat with two double beds and a single bed. The estate agent was very apologetic and promised to have the situation sorted out as soon as possible. A way to overcome this problem would be for the estate agent to make sure they are attentive to detail and to double check with customers that they have the right information.

Prejudging two members of our group is considered to be another internal problem of Ludlow Thompson. It seems to be that the way someone presents him or her self, impact greatly on the level of service received. When two members of our group came in dressed casually, there was reluctance from the estate agents to take on the case and the group members were kept waiting for a very long time. However, on observing someone else who was formally dressed, it was apparent that this had an effect on the service received. Overcoming this problem may seem hard as it is not a reflection on the company but on the individual.

Some of the external problems faced with Ludlow Thompson are that of their competitors, environment, and customers. For any company to prosper it should know its environment, its customers and who their competitors are. More funds have to be available to do all this because in an SME estate agent, there are limited resources to put the company on the map like other estate agents. Competitition is vital for companies because in analysing the competition they are able to see what their competitors are doing right and they can also see what they are doing wrong. Competition allows them to stay focused and sets a high level of quality for them to exceed- something that they would not be able to do if there was no competition. Competition also allows them to meet the demands of the market.

Analysis of internal and external problems for Douglas and Gordon

Internal problems include the lack of specialised expertise which can place small firms at a disadvantage. This is evident, in a situation where a client does not get the right information or if a client is not satisfied with the way he or she was served. Simply put, they will not return to the company.

As with Ludlow Thompson, external problems are that of competition, since competitors are a threat, the company needs to know who their competitors in order to perform better than them. It is important to know the performance of individual businesses to identify the financial strengths and weaknesses of competitors in terms of profitability, efficiency and employee performance. Douglas and Gordon as a company should be consistent in terms of quality of service provided and most of all if the company knows its market well, it will run effectively and grow.

Apply relevant and appropriate marketing techniques to your chosen firms contexts

In professional usage, the term marketing has a meaning which recognises that it is namely customer centred.

For a marketing plan to be successful, the mix of the four "Ps" must reflect the wants and desires of the consumers in the target market. The four “Ps” of the marketing mix are product, pricing, promotion and placement.

Product is the actual goods/service that is being provided.

Pricing refers to the process of setting a price for the product, however this does not have to be monetary, it can be what is exhanged for the product or service.

Promotion is the methods that are used to promote and advertise the product.

Placement which refers to how the product gets to the cutomer. The fourth ‘P’ is also called place because it refers to the means by which a product is sold.

Where the product is a service, there is an extended marketing mix, known as the 7 ‘Ps’. This includes the standard 4 ‘Ps’ and another 3 ‘Ps’. These are: people, process and physical evidence.

People refers to the person/persons coming into contact with the customers.

Process includes the process involved in providing the service and the behaviour of the people.

Unlike a good, a service cannot be experienced before delivery, so physical eveidence is how a person experiences this.

Ludlow Thompson incorporates the 7 ‘Ps’ in their processes.

Where the product is concerned they make it very clear what service they provide. They provide a variety of services to suit their customers needs ranging from “selling, letting, renting, buying, buy-to-let and financial services”(www.ludlowthompson.com).

The price is set by the client and then the estate agent find property accordingly.

Regarding promotion they advertise their services through billboards, tubes/ trains, text and e-mail alerts, newspapers and through their websites.

Regarding placement, they have 9 offices across london and are also a leading internet estate agent.

The staff had a professional attitude and offered a proffesional atmosphere however it was apparent that they were not well trained. Also there was just one person dealing with our claim and we had direct contact with this peron. They acted as a go-between between ourselves and the landlord.

Ludlow Thompson provides physical evidence through testimonials and virtual tours.

Douglas and Gordon also incorporate the 7 ps into their processes. They make it clear what service they provide. Their sevices include buying, selling, renting, letting. As with Ludlow Thompson, the price is also set by the client and then property is found accordingly.They advertise their services through brochures, magazines and the website. They are situated in 15 offices across London. Their staff are well trained and had a formal attitude towards their clients.

Douglas and Gordon provides physical evidence through testimonials and photographs (taken by professional photographers).

Conclusions

Both Ludlow Thompson and Douglas and Gordon operate in a fiercly competitive market environment. They are driven by sales.

It is essential to know your marketing environment. Having a good network will help market properties to a greater number of buyers and tenants. In addition to this, efficiency is the key to success, therefore if a company is efficient it will prosper and grow. Know the way to present your property. Looks can kill or kickstart a sale. First impressions count, therefore make sure your property is well protected.

Bibliography

accessed 19th March 2007
accessed 26th March 2007
accessed 19th March 2007
accessed 26th March 2007
Carson. D, et al (1995) marketing and enterpreneuship in SMEs. University of Ulster at Fordanstown.
Randall, Geoffrey (1994) Effective Marketing