July 9, 2007

Expert says niche is key to small business
Cal State Fullerton marketing professor advises small businesses to be first, best or different.

JAN NORMAN
Register writer

Small businesses exist because big corporations ignore whole groups of customers.

Successful small-business owners recognize this fact and focus like a laser on one specific underserved or purposely ignored group. The unsuccessful ones try to be all things to all markets.

So says marketing expert and author John Bradley Jackson.

After a corporate career as executive at Bowne & Co. and Forrester Research and others, and ownership of his own marketing and sales consultancy, Jackson has been teaching entrepreneurial marketing at Cal State Fullerton since 2002.

One of his tasks has been guiding student teams in consulting with smaller but growing companies through the campus Small Business Institute.

"Our clients are at various stages of development. Some need help writing a business plan. Others are family owned in business 15 years," Jackson said recently. "But I noticed when the students and I sat down with the owners, they had the same problems."

That revelation led him to write the book, "First, Best or Different: What Every Entrepreneur Needs to Know About Niche Marketing" published in March through Dog Ear Publishing ($19.95. For purchasing information go online to www.firstbestordifferent.com.)

The book title comes from country singer Loretta Lynn about what it takes to succeed in the music business, but Jackson said it applies equally to small businesses.

Being different may be the best path for most small businesses, Jackson said. Only one can be first, and many competitors who come later win the market. Apple didn't make the first portable MP3 player. IBM didn't make the first personal computer.

Best is even tougher for a company to stake its success on, Jackson said. "Good to Great" author Jim Collins concludes that only about a dozen companies are really great.

"Small businesses need to do different things or do things differently" in order to have a sustainable competitive advantage, he said.

For example, Ferrari made a luxury car that is different in styling and equipment from a family minivan. Starbucks does a common thing – selling coffee – in a different way.

Jackson advises the small-business owner to lay a foundation before deciding how to be different.

"Values are the foundation of the individual," he said. "I emphasize that you can make a lot of money in business, but drug dealers can make a lot of money too. So money isn't the end game. What is important to you?"

Once the owner clarifies her values, she needs to define her business' vision and mission. Why does the business exist?

"If you have the proper vision of what you want to obtain, all the little decisions become easier," Jackson said.

The owner must understand the market.

"Traditional marketing talks about the 'four Ps': product (what you sell), place (how you get the product to the customer), price and promotion (how you get your message to the customer)," Jackson said. "Dr. Bob Lauterborn, a professor at the University of North Carolina… contends there are actually 'four Cs.' "

This approach looks at the same issues from the customer's perspective. The four elements are:

* Customer wants and needs, not what the business wants to sell
* Cost. Customers think in terms of what it will cost them to get what they want or need rather than the price of the product or service.
* Convenience. Instead of stores or catalogs through which a business chooses to distribute its products, customers look for the easiest way to buy something, and increasingly, that may be on the Internet.
* Communication. Instead of the business buying advertisements or using other means to promote its products, customers want to ask questions and have the business listen to them.

Once the entrepreneur determines the values, mission and four Cs of the business, he is ready for what Jackson calls in his book, "the most important choice an entrepreneur will ever make," which is selecting a niche or specific customer segment on which to focus.

Successful entrepreneurs serve a specific market segmented by industry, geography, market or technology. They offer unique solutions for very specific customers, he explained.

"The most common strategic marketing mistake is to think too big," he said. "If it's big enough for IBM to worry about, it's too big."