Identifying Effective Promotion Strategies for Small Retail Businesses in the state of Nevada

Identifying Effective Promotion Strategies for Small Retail Businesses in the state of Nevada

CHAPTER I: INTRODUCTION

Introduction
Given the state of the U.S. economy, it comes as little surprise that small businesses in many regions of the country are struggling to hold their ground, let alone experience any growth in business. In order to maintain a consistent focus on the issues that are to be addressed in this paper, it is beneficial to have a solid working defininition of the meaning of small business. According to the Small Business Association (SBA), “A small business concern is one that is independently owned and operated, is organized for profit, and it not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period” Examples of SBA general size standards are provided on the U.S. Small Business Administration’s website SBA.gov. For the purpose of this paper, however, the guidelines will be provided only for the retailing category:
Retailing: Annual receipts may not exceed $5.0 to $21.0 million, depending on the particular product being provided (SBA.gov, 2011). Although there is often a lot of talk about small business being at the heart of the American economy, the role of small business tends to resemble a David vs. Goliath scenario more often than not. Small business, and perhaps especially those within the retail sector, are often among the most vulnerable during an economic downturn. According to the Kiplinger Letter, “The downsizing of the American retail sector has a ways to go. Retail space vacancy rates won’t top out until at least the middle of next year (201). About 150,000 stores across the U.S. will shutter their doors this year (2009), with the pace of closures remaining high for months after overall economic growth turns around. In a more typical year, about 135,000 stores close and 120,000 new stores open. Last year (2008), however, net closures ran about 40,000 to 45,000, with both more closings and fewer openings. This year (2009) should be about the same” (Kennedy, 2009). The Kiplinger Letter further notes that during an economic downturn, strip mall stores tend to fare with much less difficulty than other free-standing retail stores. The reason for this tends to be the presence of anchor stores such as supermarkets and drugstores, which tend to bring in a steady flow of consumers. However, in 2008-2009, even the strip mall retail stores are feeling the pain of the economic struggles. Not surprisingly, some smaller retail businesses are finding it frustratingly difficult, if not impossible, to compete against big-box discounters and warehouse clubs. The proof of low consumer spending is also becoming evindent in the percentage of vacant retail property, as well as the apparent lull in the building of new retail space. Kennedy observes, “About 15 million square feet of strip mall space is set to open for business in 2010, versus 17 million square feet in 2009 and the 20 million to 25 million a year that was typical between 2005 and 2008, according to Reis Real Estate. No new enclosed mall has been built since 2006.
Over the past few years, with the sagging economy as well as the difficulties often involved in being able to keep small retail businesses solvent, it has become exceedingly important for such owners to find new and effective ways to promote and ultimately grow their businesses. If small businesses continue to fail, it is arguably a bad omen for the U.S. economy as a whole.Before focusing on the more detailed look of small retail business in the state of Nevada, it is perhaps informative to gain a clear understanding of how small business across America goes about adavancing its business forward.
Anatomy of Small Business
Despite the fact that there are obvious size and structure differences between small business and larger enterprises, small business owners must comply with many of the same regulations and business laws to which larger corporations are subjected. Maintaining adherence to all of the guidelines involved is most likely to fall on the shoulders of the business owner. Realistically, small business does not usually have a board of directors or even a management team; thus, the small business owner finds a need to wear many hats and to be a ‘jack of all trades’ in learning everything that needs to be known about the business world, and how to go about establishing a presence within it. The Small Business Administration highlights the extensive list of regulations and laws with which small business owners must comply:
• Advertising Law
• Employment & Labor Law
• Finance Law
• Intellectual Property
• Online Business Law
• Privacy Law
• Environmental Regulations
• Uniform Commercial Code
• Workplace Safety & Health
• Foreign Workers, Immigration, and Employee Eligibility (SBA.gov, 2011).
While the Small Business Administration has provided its view on how small business should be defined, there is much more information that is considered in the operation of small business. Haviland and Savych explain, “Policymakers at the federal, state, and local levels use a wide variety of approaches to define a small business, either to include businesses in special support programs or to exempt them from specific regulations. These definitions may be based on a variety of company characteristics and often depend on the specific nature of the policy or regulatory issue under consideration” (Haviland & Savych, 2007, p. 1). This would be of special interest to small business owners, for instance, in determining whether or not health insurance has to be made available to a company’s employees.
Small business as a distinct entity is a focal point for numerous government agencies, such as the Bureau of Labor Statistics and the U.S. Census Bureau, whose job it is to gather all pertinent details relevant to small business research. Haviland & Savych note, “Great strides have been made in recent years to create data sources useful for conducting research on small business and its policies. Of particular importance are new longitudinal data sets created by the Census Bureau and the Bureau of Labor Statistics, which allow for the study of business entry and exit (which is especially relevant to small business policy) as well as changes within establishments and firms to be studied over time” (Haviland & Savych, 2007, p. 38).
Policy-making and the creation of data sets might not automatically seem like issues about which small business owners need to be concerned. However, information of this nature can ultimately end up costing and, in some cases, saving such companies a significant amount of money. According to Romley and Savych, “Small-business owners and advocates have voiced concern that legal liability jeopardizes the economic viability of small businesses. In a recent survey, 44 percent of business owners with 1-9 employees were somewhat or very concerned about lawsuits (National Federation of Independent Business, 2002)” (Romley & Savych, 2008). Indeed, small companies are vulnerable as targets of frivolous lawsuits, given that small companies are likely to be more willing to settle than to carry out a long and expensive legal battle. Even President Bush weighed on in this subject, arguing that “lawsuit abuse” is bad for small business. He observed, “A judicial system run amok is one that makes it really hard for small businesses to stay in business” (Nichols, 2004).
More than two decades ago, the observations published by scholars Churchill and Lewis in the Harvard Business Review, continue to have relevance in today’s world of small business enterprise. This information is given to provide a larger context of what is involved in starting and sustaining a small business. Churchill and Lewis suggest, “While the style of the owner and financial circumstances of the business certainly are important, less noticeable factors are also at work, including business size, diversity, complexity, management style, and organizational goals. These factors are used to build a framework consisting of five stages through which small companies pass:
• Existence
• Survival
• Success
• Take-off
• Resource maturity (Churchill & Lewis, 1983).
Additionally, Churchill and Lewis further identified eight key management factors. Four factors relate primarily to the business organization, while the other four factors relate primarily to the owner. While the importance of these factors will arguably change over time as the business continues expand and evolve, all eight of these factors play an integral role in a small business’s ultimate success or failure. Over the course’s of a business’s growth and development, the factors tend to shift back and forth among three levels of significance: 1) key variables that are absolutely essential for success and must receive high priority; 2) factors that are clearly necessary for the enterprise’s success and must receive some attention; and 3) factors of little immediate concern to top management.
The following aspects are those related to the company:
• Financial resources, including cash and borrowing power.
• Personnel resources, relating to numbers, depth, and quality of people, particularly at the management and staff levels.
• Systems resources, in terms of the degree of sophistication of both information and planning and control systems.
• Business resources, including customer relations, market share, supplier relations, manufacturing and distribution processes, technology and reputation, all of which give the company a position in its industry and market (Churchill & Lewis, 1983).
The next set of factors are those that relate to the owner:

• Owner’s goals for himself or herself and for the business.
• Owner’s operational abilities in doing important jobs such as marketing, inventing, producing, and managing distribution.
• Owner’s managerial ability and willingness to delegate responsibility and to manage the activities of others.
• Owner’s strategic abilities for looking beyond the present and matching the strengths and weaknesses of the company with his or her goals (Churchill & Lewis, 1983).
In the United States alone, the Association of Small Business Development Centers estimates that there are at least 22 million small businesses throughout the country, and that number has been consistently climbing. In a single year (2009) some 800,000 small businesses were started. Moreover, it is further estimated that 53% of the nation’s entire private workforce are employed by small businesses, and likely contribute over 50% of the country’s private gross domesti product. Finally, small business accounts for 99% of all U.S. businesses (Association of Small Business Development Centers, 2011). Based such significant data, the importance of the viability of small businesses in the United States quickly comes into focus. For a small business to be developed and transitioned into a presence for consumers, a great deal of effort and commitment are required of the owners who are hoping to realize a dream, in the face of what might sometimes appear to be odds that are less than favorable when competing with larger companies within a same or similar industry. However, in order to provide small business owners with a bit more of an even playing field, so to speak, supportive measures and resources are made available from both the U.S. government as well as the private sector. The challenges of starting and maintaining a small business, especially in today’s economy, can indeed seem daunting to those who are taking the risk. Complicating the picture for the small business owner is the explosion in e-commerce and online marketing tools currently available. Unfortunately, in a rush to jump on the Internet bandwagon, many small businesses have failed to realize the advantages and benefits this medium can provide by ignoring some fundamental marketing principles that arguably can make or break a small business.
Once a business is up and running, marketing campaigns and promotional efforts become increasingly greater in importance. If a small business is going to consistently have an influx of life’s blood, it is essential that owners understand not only the economic conditions in the country, but are also able to keep a finger on the pulse of what it is that consumers want, what they are willing to pay for it, and what owners need to do to entice the consumer to move forward and make the purchase from a particular owner’s business.
Just as small businesses are unlikely to have large management teams or a board of directors, many of the ‘nuts and bolts’ tasks that serve to keep a business operational are likely to weight solely on the owner’s shoulders. Not only does each and every component or department of the business need to be developed by the owner, those same areas also have to be carefully monitored, problems fixed, and changes made. It readily becomes apparent that there is nothing ‘small’ about the effort and determination that goes in to making a small business viable and helping to grow it to reach the potential that owner set out to realize. The literature review that follows will closely examine the world of small business operations, with a specific focus on marketing and promotional techniques; although the paper will primarily address how these issues impact small businesses in the state of Nevada, it will also include a general pattern of how small business is faring across the nation.
CHAPTER II: LITERATURE REVIEW
One of the unfortunate realities in the world of small business is the significant number of businesses that fail to succeed. However, the requirements a new owner has to take on certainly serve to explain some reasons why this might be the case. There are a variety of ingredients that go into starting and maintaining a business. And just like a fine meal, if there is too much of one ingredient, and not enough of another, the meal is likely to be, at best, a disappointment and, at the very worst, a disaster. Zimmerer notes that small business owners generally are overworked and are attending to their businesses far more than the average 40-hour work week. It is not surprising, perhaps to find that almost half of new small businesses close in less than a five-year-period (Zimmerer, 2010, p. 18).
Although many small business owners may set out with a good idea, ample knowledge about the service or product on which their business will be based, and perhaps even a viable business plan, it is the case, more often than not, that a significant number of new business owners are lacking the required managerial skills required to handle every aspect of their particular business. Clearly, without a staff and a governing body to advise, support, and assist them with any and all of the tasks that need to be implemented, it is unlikely that a new business owner will be able to handle all of the details and burdens of a new business.
Perhaps frequent small business closures could be attributed to limited finances, fewer staff, a nominal number of managers, a bad location, a bad idea, or even bad timing for the marketplace. However, and regardless of the reason or combinations of such, small businesses across the nation continue to close at alarming annual rates, and the statistics have remained unchanged. Approximately 45% of new businesses close each and every year. (Zimmerer, p.16) This numbers reflect the consistent “norm” for many previous years.
Background of Small Businesses in the state of Nevada and the United States
Given the explosion in corporate growth in Nevada over the last 25 years, some observers may wonder whether there is even any room left in the marketplace for small businesses. The causes of the vast corporate growth witnessed towards the end of the 21st century have found varying explanations. One school of thought, most prominently represented by the U.S. economist John Kenneth Galbraith, sees growth as stemming from the imperatives of modern technology. In this view, the economies of scale provided by a large firm employing the range of talent needed for research and development in areas such as aerospace and nuclear energy is absolutely required. Further, only companies of this stature have the capacity for innovating industrial processes and entering international markets. Just as government has had to grow in order to meet new responsibilities, so have corporations found that producing for the contemporary economy calls for the intricate interaction of executives, experts, and extensive staffs of employees. While there is certainly room for small businesses, the kinds of goods and services that the public seems to want increasingly require the resources that only a large company can master.
Having said this, there are still opportunities and possibilites that the continuing growth of e-commerce and a presence on the Internet hold for small businesses. While an online presence might not be suitable for every small business in the state of Nevada, the small retailer, including those small retailers who sell clothing, food, music, electronics, jewelry, books, consultations, home and garden, furniture, care personal care products, gifts, cards, household items, travel services, real estate, lumber and accessories, auto parts and accessories, flowers and plants, inventions, etc, interested in a low cost growth strategy, the Internet appears to offer the greatest potential for reaching a larger market, and perhaps diversifying while remaining competitive.
However, other analysts maintain that the optimum size of the efficient firm is substantially smaller than many people believe. For instance George Romney, a former president of the U.S. company American Motors Corporation, said that an automobile company could prosper and be profitable while producing only 200,000 cars a year. Using this rationale, most of the divisions of the enormous U.S. General Motors Corporation could easily be established as separate “small businesses.” In the final analysis though, some research has shown that profit rates in industries having a large number of smaller firms are just as high as in those in which a few big companies dominate a market (Woodward, 2008 s. 4-5). Manufacturing firms produce a wide range of products. Large manufacturers include producers of airplanes, cars, computers, and furniture. Many manufacturing firms construct only parts rather than complete, finished products. These suppliers are usually smaller manufacturing firms, which supply parts and components to larger firms. Larger firms subsequently assemble the final products for market to consumers. For instance, small businesses provide many of the components in personal computers, automobiles, and home appliances to large firms that create the finished or end products. These larger end-product manufacturers are often also responsible for marketing and distributing the products. The advantages that large businesses have in being able to efficiently and inexpensively control any parts of a production process are known as economies of scale. Nevertheless, smaller manufacturing firms may serve as the best framework for producing certain types of finished products, and such smaller end-product firms are commonly found in the food industry and among artisan trades such as custom cabinetry.
Small retail businesses, on the other hand, are faced with a different set of challenges from their wholesale counterparts. By contrast, retailing requires all of the activities required to sell directly to consumers for their personal, non-business use. Retailing can take many forms: goods or services may be sold in person, by mail, telephone, television, computer-based activities known as e-commerce, or even through vending machines. These products can be sold on the street, in a store, or in the consumer’s home. While the explosion in the use of the Internet for home-based shopping has changed things somewhat, businesses that are classified as retailers continue to achieve the vast majority of their sales volume from “brick-and-mortar” store-based retailing (Kotewall & Hibbard 2010, s. 3-4).
Not surprisingly, the “brick-and-mortar” large retail competitors are not particularly open or even neutral in their response to small retail business that are trying to find a place in a consumer’s world. McGee and Rubach contend, “Environmental conditions facing organizations are often described as falling along a continuum from benign to hostile…. Hostile environments are characterized by precarious industry settings, intense competition, and harsh business climates. Hostility is an environmental dimension which, by definition, poses a threat to firm viability and performance” (McGee & Rubach, 1997). Indeed, as indicated by the earlier work of Covin & Covin (1990) and Davis, Morris and Allen (1991), the research on the hostile environment and its relationship to competitive behavior and performance – albeit often contradictory in nature and fragmented — was beginning to emerge some two decades ago.
Citing the research of Covin and Slevin (1989), McGee and Rubach contend, “The adverse effects of increased environmental hostility pose a severe threat to small businesses due to the limited resources of most smaller firms and their relative inability to survive the consequences of small managerial decisions. Competing in a hostile environment, therefore, will become increasingly important. This is particularly true for small rural retailers which face the continuing and rapid expansion of large discount chain stores into their market.” (McGee & Rubach, p. 83).
From the somewhat limited research that has become available about hostile and benign environments, McGee and Rubach note that each of the respective environments “require small firms to exhibit certain competitive behaviors in order to succeed” (1997, p. 85). The researchers further examine a scenario in which Wal-Mart was about to enter a local market:
While not totally unforseeable, the entry of a Wal-Mart into a local market is a turbulent, unsettling event (see Taylor & Archer, 1994; Welles, 1993; Ozment & Martin, 1990). Applying the ‘zero-sum game’ principle to the local market, the opening of a discount mass merchandiser, like Wal-Mart, will have a substantial impact on local trade. The new stores will take a sizeable slice of the fixed retail pie, with existing local merchants often being the losers (Stone, 1995).
From their research, McGee and Ruhbach were able to draw a number of conclusions about how small retail firms are likely to react in the face of large discount chain stores such as Wal-Mart entering into a local market. In essence, the scenario here suggests that “local merchants adopt distinct strategies to compete in the newly-created hostile environment” (1997, p. 92). Moreover, the study indicates that while competitive pricing is indeed a significant factor – one in which the small retailers cannot replicate – small retail stores are much more likely to focus on consumer’s concerns that the larger retailers often tend to dismiss or ignore. In this case, it was suggested that the superior level of service that is often achieved within smaller entrepreneurial businesses can help to overcome the cut-rate prices offered by large retailers.
Small entrepreneurial business can also serve to gain additional advantages because such businesses lack the kind of large wielding system that tends to be laden with a massive hierarchical structure. A small business is often able to make quicker decisions, which can be highly advantageous in the marketplace. In this position as well, small businesses are better able to customize offerings to consumers, gather primary marketing data for future use, and provide personalized customer service. In the David vs. Goliath type competition that is likely to exist between small retailers and larger discount businesses, each respective side is going to have certain strengths and weaknesses. For small business to prevail, the key is in determining the extent of their strengths, the things that might also make them somewhat unique in nature, and to build upon those components. This is arguably in contrast to getting caught up in the playing field that is generally ruled by the larger retailers. Merely trying to get even and keep pace in a price war with the “big dogs” is likely to yield results that will prove to be less than satisfactory to small business owners. Small business have to strive to be judged on its own merits, and not try to make itself appear to be something other than what it truly is.
In providing a larger context of how small business operates and the challenges it can often face in handling the competition with larger retail business enterprises, a general sense emerges as to how the business climate is likely to exist throughout cities, towns, and rural areas throughout the U.S. Of particular interest for this paper, however, are some of the developments in small business that have occurred, or are currently taking place, in the state of Nevada. By examining the specific pattern and trends across the nation, it is intended that investigating this research will outline some of the options and opportunities that might exist for small businesses within the state of Nevada. This information will consist of the types of resources that are avilable to assist small business owners, the various promotional techniques and methods available, as well as the emerging venues in which these business models can compete.
In an article from early in 2011, Smith starts the piece in this manner: Drive by just about any shopping center in Las Vegas and you’ll see shuttered storefronts, going-out-of-business sales, and banners advertising space available for lease. It doesn’t take a chief economist to tell us that retailers are hurting in Las Vegas and commercial real estate is in the tank. The skeletal steel framework of General Growth Properties’ stalled Summerlin mall project stands in testamentof that (Smith, 2011).
However, as the article continues, there are signs and suggestions that perhaps retailers and investors in Nevada were failing to heed the signs of a downturn in the economy. Smith contends, “Even as retail vacancy rose, developers built more shopping centers and big-box stores in Las Vegas, pushing retail inventory from almost 42 million square feet to 51.2 million square feet in five years, Applied Analysis reported” (Smith, 2011). It begs the question, Why What were they thinking One potential explanation is offered by Brian Gordon, a principal in Applied Analysis. During the period from 2003 to 2006, consumer spending patterns were significantly different than what they now are. Inspired by such spending activity, numerous retails essentially structured and expanded their businesses based on the spending patterns between 2003 and 2006. Retailers were looking for locations in which they could expand, and subsequently developers started erecting new centers. The potential for what might go wrong, actually ended up going wrong. Smith observes, “Some of those properties are going back to the bank, part of the $3.5 trillion in commercial loan losses that many analysis predicted would dwarf residential mortgage defaults. Las Vegas has been its share of prominent retail developments go into foreclosure, including Town Square on Las Vegas Boulevard and land that was planned for the Great Mall of Las Vegas… Much of the real estate-owned, or bank-owned, commercial property was built in the heyday of new development, around 2004 and 2005 [according to Frank Gatski of Gatski Commercial]. They were overleveraged and couldn’t be leased from the time they were built” (Smith, 2011).
The commercial real estate market in Nevada did not feel the same crunch that other areas of the U.S. did. In 2010, despite some omenous predictions, very little distressed commercial real estate came onto the market. Indeed, less than 10% of real estate sales in Nevada in early 2010 could be attributed to distress property sales. Subsequent data indicates that distressed property accounts for 15% of real estate transactions. There are concerns among the experts, such as economist Ross Moore, that this number could exceed as much as 20% to 25% during 2011. Based on an interview with reatail broker Mike Zobrist of Grubb & Ellis, Smith also reports, “Nobody really knows whether the commercial foreclosure wave is coming, but retail properties in Las Vegas are definitely going back to the bank. Anything built from 2007 to 2010 with pro forma rent of $2.50 to $2.70 a square foot is likely in default” (Smith, 2011).
According to Dave Dworkin, research director at Grubb & Ellis, it is unfortunate that it is largely the smaller retailers that are experiencing the struggle to keep their doors open for business. The situation is proving to be especially painful for retailers that signed leases prior to the onset of the recession. Many of those small business have leases that were signed anywhere from three to five years before the recession hit. Tenants were learning that it was to their benefit to sign new leases with their landlords, rather than run the risk of extending a lease that had already been in effect. Dworkin concludes, “Vegas needs tenants that aren’t already here to bring in something fresh,” he said. “They don’t have to open 20 stores. Try one” (Smith, 2011).
The following overall economic data for the Clark County retail industry was recently released by the Nevada Department of Taxation:
TAXABLE SALES FOR MAJOR RETAIL INDUSTRIES IN CLARK COUNTY **
Category YTD taxable sales Prior year Percent change
Motor vehicle and parts dealers $848.1 million $809.3 million 4.8
Furniture and home furnishings $163.8 million $143.1 million 14.5
Electronics and appliances $333.1 million $299.4 million 11.3
Food and beverage stores $338.9 million $342.2 million -1.0
Health and personal care $302.0 million $294.3 million 2.6
Gasoline stations $75.6 million $71.6 million 5.7
Clothing and clothing accessories $891.6 million $800.2 million 11.4
Sporting goods, hobby, book and music $132.7 million $135.2 million -1.8
General merchandise stores $799.2 million $789.2 million 1.3
Miscellaneous store retailers $318.2 million $287.5 million 10.7

** Clark County is the most populated county in Nevada; Las Vegas is the county seat.
[SOURCE: Nevada Department of Taxation (year-to-date through October 2010)]
There are a number of potential marketing strategies and promotional campaigns small business can develop to help bring attention to a particular retail store, which will be examined later in the paper. Government is highly renowned (and often criticized) for the opportunities it offers to large corporations and well-known companies. Given many of the stories that have emerged in recent years in the media, it becomes frustrating to consider why the big names and large organizations are getting help, and seemingly wasting the help that is being offered to them. Perhaps this is a bias against big business, but there is a body of small businesses that arguably suggest that they might be able to make better use if the same type of help was offered to them. Writing for Nevada Business Magazine, Jennifer Baumer offers what seems to be an encouraging idea for small business; for others, however, it might seem like a bold statement. She contends:
Nevada has traditionally been a Mecca for small to medium business sized businesses rather than a Mecca for Fortune 500 companies and, as the economy turns toward recovery, that traditional economic base should play an important role. Recovery from this recession will happen through small businesses and entrepreneurs who are ready, able and willing to start up new companies in Nevada. The organizations and services that help small businesses and entrepreneurs are often government services – not just for start-ups, but for companies looking for funding, reorganization, expansion or reform. “Everyone keeps saying the only way our economy is going to come back is through small businesses,” said Kathy Carrico,statewide training director, Nevada Small Business Development Center (NSBDC).
“They say it, politicians say it, economists say it, the news says it, if that’s reality,
then what we’re doing [at Nevada Small Business Development Center] is vitally important.” There are government services out there to help existing businesses, struggling businesses and businesses that are succeeding and want to succeed further. There are services for both entrepreneurs and those that are just getting started (Baumer, 2011).
Although this might escape the attention of many people, the fact is that the Federal government is probably the most significant consumer and purchaser of goods and services. The U.S. Small Business Administration reports, “Last year, $100 billion in Federal contracts went to small businesses. The Jobs Act contains provisions to help build on that and get more contracts in the hands of small businesses in 2011 and beyond” (Small Business Resource Nevada, 2011). The government also has the capacity to show its support in a very practical way when it considers the nature of tax relief that should be made available to small businesses. According to the U.S. Small Business Administration, there are numerous new tax cuts tht small business owners can take advantage of, including:
• The highest ever-small business expensing limits–$500,000 for 2010 and 2011.
• Carry back for qualified small businesses of general business credits to offset five years of taxes
• Zero capital gains taxes on qualified stock investments in small businesses for the 2010 tax year.
• Increased deductions for start-up expenditures for entrepreneurs for the 2010 tax year.
• Easier deductions for employer provided cell phones.
• New deductions for health insurance costs for self-employed business owners and their family members.
• Limits on penalties for errors in tax reporting that disproportionately affect small business.
• Extended bonus depreciation (Small Business Resource Nevada, 2011).
An additional aspect of the Federal government that can ultimately serve to support and strengthen small business is likely to grow out of the Jobs Act and the SBA’s International Trade Loans and Export Working Capital. The U.S. Small Business Administration contends, “Small businesses are the sector of the economy that’s best poised for growth through exporting. With the growth in new technology, new markets are opening up small businesses all the time. And since the President has made it a priority to double the country’s exports, now is a perfect time to begin exporting” (Small Business Resource Nevada, 2011).
Although trying to compete against the larger retailers might sometimes feel like an uphill battle for small business, the reality is that one of its greatest strengths is the fact that it is indeed small. Consumers are generally careful about what they are getting in return for their money whenever they make a purchase. This carefulness understandably increases even more during a time of economic downturn and instability. Certainly the economy is going to have an impact on how, where, and on what people are going to spend their hard-earned money.
The key for small business is to be able to gauge the aspects of the purchase that are most important to the cautious consumer. There is an interesting element that emerges when the economic is struggling. The U.S. Small Business Administration observes, “Studies show consumers do not always buy the lowest priced item when times are tough. They are more likel to grativate to what they perceive as ‘tried and true.’ Once they buy, they simply cannot afford shoddy quality or a bad service experience” (Nevada Small Business Success, 2010).
With less money available in general, buyers have a tendency to buy well-established brand items from companies that have a proven track record in terms of their credibility. One of the first things a new small business needs to do is to establish credibility and trust in the minds of potential buyers. Indeed, the economic downturn in this country can be seen as an opportunity for small business to focus on marketing the aspects that is of the utmost important to consumers, namely, credibility. Experts indicate that the buying public is exposed to some 2,500 marketing messages on a daily basis. Despite the barrage of information, consumers are somewhat predictable in their patterns of shopping. “Credibility drives return buyers and future purchases… Constantly projecting this business ‘credibility’ into the consumer marketplace is vital for business survival in a challenging and competitive market… Strengthening business credibility, especially when consumers may need added incentives to make a purchase, should be a priority for every small business owner” (Nevada Small Business Success, 2010).
Overview of Past Successful Strategies for Small Business in Nevada
Throughout the years, Nevada has had its share of growth and development. The casinos have certainly been a source of wealth and profit. However, small business also played a significant role in Nevada’s economic communities. On June 3, 2004, writing for the North Lake Tahoe Bonanza, reporter Jim Clark ran a headline declaring, “Nevada a Hotbed for Small Business.” The article continued:
Great news for Nevada! The Annual Gold Guide to Leading Rankings, recently published by the National Policy Research Council, has concluded that our little bit of heaven is a hotbed of business opportunity and economic ecstasy. The “Gold Book’s” findings resulted from a review of data from a variety of surveys, studies and similar sources. They note that Nevada’s unemployment rate is 4.3% as opposed to a national rate of 5.6%. Statewide taxable sales soared by 16% over a year earlier capping 21 straight months of increases (did we REALLY need that tax increase, Governor). Tourists are flooding to both Las Vegas and Reno at significantly increased rates over just last summer. As a result of all this the “Gold Guide” ranks Nevada as the NUMBER ONE STATE in providing a favorable business climate for entrepreneurs and small businesses . . . which, as everybody knows, constitute the backbone of the Republican Party (Clark, 2004).
It is interesting to try to examine what it was about the business climate in Nevada during that period of time that yielded such high and optimistic observations for small business. The Nevada Small Business Development Center (NSBDC) has been identified as playing an integral part in Southern Nevada’s economic development. Working in conjunction with the University of Nevada, Las Vegas, a highly innovative partnership was created, with the intended goal of helping the University promote economic development in the Las Vegas and Southern Nevada region (Tucker, 2004). The impact that NSBDC has had on the community is evident in these statistics:
• Over 97% of the businesses in the state of Nevada employ less than 100 people.
• Nearly 60% of Nevada employees work for a small business, representing 44,000 small businesses and over 600,000 employees, with approximately 93% of all new jobs being created by small business.
• Small businesses face an annual regulatory burden estimated at $6,975 per employee, a burden nearly 60% above those facing businesses employing over 500 employees.
• In 2002 (latest data available), the NSBDC assisted over 11,000 existing and start-up businesses through individualized business counseling, business training and workshops, environmental compliance assessments, workplace safety and health assistance and Disadvantaged Business Enterprise education and certification assistance.
• In 2002 the NSBDC assisted clients in acquiring $7.6 million of new capital.
• Clients reported 230 jobs were created and 73 jobs retained.
• The NSBDC website also received over 36,000 hits (Nevada Small Business Development Center, 2002).
The state of Nevada was arguably running on a solid number of consecutive years during which Las Vegas, in particular, was riding an escalation in tourism and population. Indeed, according to Inc., “Las Vegas topped the nation in small business growth from 1998 through 2003, according to a new report. The Nevada city saw its number of small businesses expand from 46,170 in 1998 to 73,163 in 2003, an increase of 58.5 percent, according to the State of Small Business Report by Sales Genie, a database company. The report ranked the rate of small business growth among the 100 largest U.S. metropolitan areas during the six-year period. (Aneiro, 2004).
While the casinos that line the Las Vegas strip have certainly been an attraction that has increased Nevada’s revenue, Kotkin suggests, “The Vegas boom extends well beyond the famed strip and into the surrounding suburbs. Entertainment and tourism gained 14.2% since 2002, but job growth has been even bigger in financial and professional services, and most particularly, construction, up almost 50%” (Kotkin, 2006). Vegas and Reno seem to be luring more residents and commercial enterprises away from California. Kotkin continues, “Critical as well to the region’s success has been the movement of entrepreneurs like Ron Geraty, whose Allere Medical (Inc. 500 No. 366) moved to Reno from San Francisco in 1999. Geraty has taken advantage of Reno’s lower costs and taxes to expand from 25 to 200 employees. “Coming here, we didn’t give up anything,” Geraty claims. “Only the negatives” (Kotkin, 2006).

Advantages for Small Business in Nevada
In addition to having an entrepreneur-friendly reputation, Nevada is attractive to small business owners for many additional elements. The Small Business Survival Index (SBSI) ranks the states according to the policy environment as it relates to entrepreneurship. The 2011 SBSI ranks Nevada as second among all the states, with an SBSI score of 38.531. The Small Business Survival Index highlights the following with regard to the state of Nevada:
• No personal income, individual capital gains, corporate income, corporate capital gains, and death taxes
• Low level of state and local government employees
• Low workers’ compensation costs
• High consumption-based taxes
• High unemployment taxes
• High state minimum wage (SBSI, 2011).
Despite the advantages that Nevada might have enjoyed prior to entering in to the nation’s economic downturn, the effects of the struggling economy have taken a toll on small business, not only in Nevada, but also across the entire country. In July of 2010, Nevada Senator Harry Reid offered a public statement about the difficulties being experienced by small business, in general, and within his home state as well. Reid declared, “Every day Nevada small businesses are struggling to keep their doors open. And while Democrats are fighting to give them the support they need, Republicans are pulling out all the stops to block assistance to our small business community…. Republicans need to stop betting on failure and get serious about putting our economy back where it needs to be. Democrats will not rest until America’s small businesses get the support they deserve” (Reid, 2010).
Although small business will definitely have a better chance of recovering with the assistance of the Federal government, some of the responsibility to strengthen and support small businesses is going to have to come from the owners themselves. Federal money can help to stabilize small companies as they begin to recover from the recession, but it does not rest on the government (nor should it) for a businesses ability to grow and succeed or to fail to thrive and ultimately close their doors. It will be the creativity and ingenuity of small business owners who have the dedication and the energy to revitalize business through marketing and promotional efforts. Some of these efforts might go into strategies and campaigns that have proven to be successful in the past. Some of the efforts might be directed into strategies that have yet been untested and perhaps risky to many small business owners. The way the world is doing business is for the most part in a state of flux. Figuring out how to ride the flow and to arrive at the desired outcome is going to be a formidable challenge for many small business owners. Sticking solely to old ways of doing business, without taking new chances is likely to not achieve the desired outcome; doing nothing is likely to result in failed business.
General Perspective on Small Business Strategies for the 21st Century
While it is certainly obvious that marketing strategies in the 21st century are markedly different from those used in the earlier days of promotion and marketing of small business, it is important to remember that there is new need to change to the point where the “baby is being thrown out with the bath water.” In other words, marketing techniques that have been previously utilized and have produced results should continue to be part of a business’s repertoire, so to speak. Although it is important to embrace change in an ever-changing environment, there is no reason to cast off marketing techniques that have been tried and true in the past. Writing for the website chron.com, Richards suggests, “Ultimately, successful marketing is about identifying a target market, understanding its needs, and communicating the business’ compelling messages through multiple channels. These marketing messages all convey how consumer needs can be met by the business’ products and services (Richards, 2011).
Having said that, however, it is important to gain a clear understanding of what has changed, how it has changed, and how the change might potentially impact a business and its customers. Arguably, consumers are likely to have more options, choices, and decisions to make than ever before. These changes generally fall into one of three categories:
• More communication choices: While the standard methods of communication are still available as a means of implementing a marketing strategy, television, newspapers, and radio clearly have had to make a considerable amount of room to accommodate the Internet, social media, and all that comes with it. More choices, however, can be seen as a double-edged sword. On the positive side, the capacity to reach people expands to a global level; the other side has it challenges in the sense that it can take additional time to determine which choices should be decided upon.
• More creative options: The channel or forum in which marketing messages can now be produced or broadcast allows small business owners to enhance the message they want to send in a multitude of ways, in terms of graphics, sound, and video possibilities. However, the business owner has to be careful to maintain the appropriate image to represent the brand.
• More consumer choices: Additional consumer choices more often than not become available due to the increasing amount of competition that is now in the marketplace. Businesses are no longer vying just for local consumers, but are also looking to entice customer from around the world.
• Finally, social media is a way for consumers to share all kinds of information, virtually, in the blink of an eye. A successful marketing effort can become known to millions of people in a very short span of time. Word-of-mouth takes on a whole new meaning. Conversely, if an idea or product misses the mark, consumers across the globe can also learn of that almost as quickly as it happens (Richards, 2011).
Also addressing the word-of-mouth marketing concept, Lindeman notes that technology has made information exceedingly easy to get. She further contends: Word-of- mouth marketing used to mean getting a mechanic’s name from guys at the barbershop or discovering a good restaurant over the backyard fence. These days, it comes from a blog, a website, message boards and online social networks such as MySpace.com, and it has advertisers buzzing. Because the chatter is much easier to follow in this virtual world than, say, a conversation at the salon or neighborhood barbecue, marketers are tapping into the buzz and, in some cases, even trying to start it and then track the results (Lindeman, 2007).
The point has been made that certain types of businesses lend themselves more easily to Internet marketing, and indeed, some suggest that small business fits that notion. However, the simple idea that small business might be better suited to Internet marketing, cannot preclude the possibility and probability that large competitors will also make use of the new technology and the scope it offers for reaching new customers. In the history of business, it seems as though the little guy always has to face off against larger competitors, competitors that have much more money to reinforce the strength of their names in the marketplace. Nevertheless, it is clear that small business does not always come out the loser in such scenarios. Considering some of the ways in which small business can prevail, Dylan suggests, “There are some generally accepted strategies to use when competing against larger, more established competitors. These strategies have been used successfully by companies of all sizes to drive sales and carve out a sustainable position in the market, even when up against the leading company in a given market. They apply to online commerce and traditional small businesses” (Dylan, 2007).
1. Take the “Alternative” Position: It is not necessary for a small business to directly go up against the market leader in an industry. “Survey the competitive landscape in your market and determine how you can position your business as the best alternative to the established market leader. Second place in a given market can be a very nice place to be from a profitability standpoint” (Dylan, 2007).
2. Sell what they don’t have – You! Small business owners have the opportunity to become the ‘public face’ of their business. Larger companies sometimes use this strategy; Richard Branson might be a good example in that case. However, generally speaking, larger companies are not necessarily identified with a public face. “Having a single person leading the charge to build media relationships and run the company makes it easier to transfer the goodwill that you achieve in the media over to your business activities. This doesn’t work nearly as well for larger companies, so leverage this competitive advantage and take a personal approach to building your business through publicity” (Dylan, 2007).
Small business owners need to remember that some of the best marketing strategies involve simply leveraging a built-in advantage, such as being a small enterprise. Personal credibility is also something that can be leveraged to promote small business. As technology changes, it is probable that marketing approaches are also going to have to keep pace. A successful website design company called Konoozi Web Design (2011), which is based in New York state, offers their top 10 small business marketing tips that are likely to adapt well to the marketing trends emerging in the 21st century:
• Write a small business marketing plan: Create a one-page strategy document that serves to clearly identify: what your business is, what you offer, target consumer population, specific ideas on how to go about marketing to them, and an effectiveness measurement scale to keep track of marketing efforts.
• Create an Internet presence: Figure out what you want your website to accomplish. For example, if driving traffic to the site is the main goal, consider ways to do so (eg., online coupons, social media presence, newsletters, or blogs.
• Market to please your ideal customer: Identify the type of consumer that is most likely to benefit from what the business does or what it sells. Know the demographics of your target population of consumers. Tailor your message to those ideal customers.
• Construct and manage a social media-marketing plan: First thing to remember – do not try to have a presence on every social media site. You do not want to swamp too many sites with your message or sales pitch. “You want to grow networks and engage in mutually beneficial 2-way conversations about your products and services” (Konzooi, 2011).
• Share your passion for your business: Blog about what excites you about your business as well as your level of expertise in your particular industry. It is also useful to check out the competition’s blogs and perhaps even comment on their blogs.
• Use limited time discounts or service trials: Consumers are always looking for value for their money, as well as discounts on trials for special quality products. Coupons can generate excitement and business.
• Create marketing messages that fuel natural human curiosity: The design experts at Konoozi write, “This requires creative, out-of-the-box thinking, but can really create a buzz for your small business. A local jewelry storeowner, who targets mainly to men who are buying for their wives or girlfriends, created the tagline ‘I Hate Steven Singer,’ which has been a successful, recognizable marketing slogan for his local business. And there is the famously successful Apple ‘1984’ commercial that had nothing to do with a product or its benefits; rather it created consumer anticipation and Apple’s ‘game-changing’ image that endures today” (Konoozi, 2011).
• Network with another local business to create a mutually beneficial promotion: Hooking up with another business that works well in conjunction with yours is a way to reach a larger customer base, while splitting the cost of marketing expenses.
• Develop a customer referral program: Reward customers who spread a good word on social media sites to others about the quality of your business. Customer incentives and loyalty discounts can go a long way in getting the word out.
• Make marketing a daily task: It is necessary to monitor your strategies once you have implemented them. “Commit time daily to stay current with trends and evaluate which tools work best for your small business through trial and measurement” (Konoozi, 2011).
Potential Promotional Strategies for Small Business in Nevada It is certainly true that the variety of general strategies mentioned thus far are suggested as being useful to all types of small business throughout the United States. The focus will now shift to what can be done, specifically, in the state of Nevada in terms of marketing strategies and promotional campaigns for small retail businesses. In 2010, a small business owner in Nevada created some highly innovative ideas for promoting his apparel shop in Reno by using social media as his forum. The Nevada Business Journal featured this owner’s marketing approach in their April 2010 edition. Essentially, whenever the business owner was attending community events, he reportedly uses his iPhone to take pictures of people in attendance at the event that are wearing his brand. Then, he sends one text message simultaneously to the company website, his Facebook page (which has in excess of 2,000 fans), and his Twitter page (which has more than 1,000 followers). Reporting on this small business owner’s story, Doresa Banning writes: He recently spread the word about a store sale via social media, and revenue that day was the highest ever. He advertises on Facebook for $5 a day, which yields him 15,000 to 20,000 impressions daily. Customers frequently send him photos, which end up on the store’s photo-sharing account at Flickr. The 42-year-old owner uses social media marketing to expose his apparel store in Reno with the hope of becoming Nevada’s signature brand. While daunting at first, social media now for him is easy, fun, and beneficial to his business, he said. ‘Without question, it has gotten people into the store,’ he added” (Banning, 2010).
This marketing strategy was a pretty straightforward idea that realistically required very little expense to the business owner, yet clearly enhanced his business. The goal behind the social media marketing strategy seems to be repeatedly mentioned as serving as a new opportunity to generate revenue and relationships with customers. Marilyn Crawford, CEO of a Las Vegas interactive and integrative media technology company makes this observation about social media. “It can massively affect the reputation, branding, sales and promotion of any person and any item that’s out there… the technologies let you deliver a message immediately, extend its reach around the world, contact a large consolidated group rather than a fragmented one, target individuals with personal advertising, and modify communications in real time,’ Crawford said. ‘They also allow you, in real time, to provide immediate feedback, track your online advertising and evaluate their impact. And all of it can be done at little to no monetary cost. Now you have an opportunity to take those media buys directly to the consumer’s mind, home, cell phone and Internet. It blows behavioral marketing and so–called tactics out of the water,’ she added” (Banning, 2010). The general consensus seems to be that social marketing is now part of the mainstream in the business world. Nevada businesses can benefit from incorporating social media into overall marketing campaigns.
Moreover, it is important for small business owners to understand that following the social media route only, exclusive of all other marketing strategies, is probably not the way to go. Indeed, it is suggested that for anyone opening a new store, it would be wise to have a mix of traditional offline marketing approaches, such as television and print advertising, complemented by an online marketing component. It takes some time and dedication to learning how to proceed most effectively on the social media sites. And many marketing experts caution that success should not be expected overnight. However, consider what the potential payoff might eventually be: Foley reports, “According to Internet World Stats, more than 1.3 billion people worldwide have Internet access, and in North America, more than 71% of the population is online. With more people each day using the Internet to find information, compare and purchase products, and make important business decisions, having a competitive Web site is vital for businesses both large and small…. Making the most of a company’s online presence can produce a good return on investment, but experts note that the initial investment does need to made if a firm expects to compete in the 21st century market, which is increasingly moving to the Internet.” (Foley, 2008).
There is little doubt that the shift toward online commerce will continue well into the future. This is just a sample of the statistics compiled from a number of different resources and published on the smallbusinessfacts.com website (2007):
E-commerce Buying Trends:
3/4 of online shoppers say they would not return to a website that took longer than 4 seconds to load. [Akamai, 11/2006].
Roughly 30% of the total U.S. Internet population visited blogs in the first three months of 2005. [comScore, 08/2005].
Online retailers are acquiring new customers at a 15% annual rate versus 2% for traditional brick and mortar retail outlets. [Deloitte & Touche USA, 11/2006].
U.S. consumers are expected to increase their retail online spending from $877 per consumer in 2005 to $1,512 per consumer by 2009. [eMarketer, 05/2006].
Consumers are 50% more likely to be influenced by blogs and e-mails than TV or radio advertising. [EPM Communications, 04/2006].
1/4 of all retailers offer information about their products online. [Forrester, 07/2006].
93% of consumers say they are unlikely to purchase from or even return to a website after encountering annoying pop-up ads; 89% are annoyed when they need to install extra software; 83% are annoyed when registration pages block access to online content. [Hostway, 07/2005].
2/3 of adults say they would not pay for content to avoid online advertising. However, 31% of online adults paid for content in 2005, up 5% from 2004. [Jupiter Research, 09/2005].
79% of small businesses shop online regularly. [Jupiter Research, 07/2006].
16% of consumers say they would contact a vendor through e-mail. 68% of consumers say they would use the phone number listed on a website to contact a vendor. [Nielsen/Net Ratings, 09/2006].
54% of consumers referred a friend to a vendor found online. [Nielsen/Net Ratings, 11/2006].
Online sales are growing at a rate between 20 and 25% per year. Online sales (including travel) are projected to reach $211.4 billion this year. [Shop.org, 07/2006].
1 second: the frequency new blogs are created. [Technorati, 11/2005].
93% of those who have a net worth of $10 million or more have purchased a luxury product on the Internet in the past year. [The Luxury Institute, 07/2006]. Marketing promotions U.S. online retailers are planning to use to generate revenue from loyal customers during the 2005 holiday season: 63% free shipping, 42% value-added promotion, 33% online-only sale, 33% special repeat buyer discount, 29% bundle offer, 28% early-shopper discount – 28%, 11% rebate; 22% other, 12% no special offer. [WebTrends, 08/2005].
Marketing & Advertising:
Roughly 7 out of 10 computers use pop-up ad blockers. [Arbitron/Edison Media, 10/2006].
For generating leads for direct marketing media channels, email and telephone produce the highest response rate at 2.45% and 2.60%. [Direct Marketing Association, 11/2006].
By 2011, companies are expected to spend $26 billion on Internet classifieds. [JupiterResearch, 10/2006].
66% of newer businesses that have been in operation less than 10 years use a company website for marketing, while only 51% of older businesses do so. [Kelsey Group, 05/2006].
Viral marketing campaigns produce 7 to 8 times more clickthroughs than traditional banner ads.
[MarketingExperiments.com, 11/2006].
3/4 of consumers say they can remember the brand name of a promotional item they had received within the past year. [MarketingSherpa, 02/2006].
47% of small business owners use the Internet to market or advertise their business. [Open from American Express, 05/2006].
1/4 of advertisers have stopped or slowed their pay-per-click advertising. [Outsell Inc., 10/2006].
In 2005, North American advertisers spent $5.75 billion on search engine marketing, a 44% increase from 2004. In 2010, it is projected that search engine marketing spending will reach $11 billion. [Search Engine Marketing Professional Organization, 01/2006].
64% of retailers conduct up to three e-mail campaigns per month. [WebSurveyor Corp, 10/2006].
In 1970, the average city dweller was exposed to 500 to 2,000 ad messages a day; today it’s up to 3,000 to 5,000. [Yankelovich, 10/2006].
While there is certainly no abundance of literature to suggest that the world of e-commerce is likely to completely replace the brick-and-mortar small business retailers across the United States, there is ample evidence to suggest that if small businesses want to remain competitive – against larger companies as well as those that are comparable to theirs in size and productivity – the key to future business success is learning how to make the most out of the Internet and the world of e-commerce. An article on e-commerce, published some 10 years ago in The Journal of Applied Business Research off what seems to be, in retrospect, a good analysis of what the next global frontier for small business is likely to become. Mehta and Shah suggest, “As with any new technology, there are a number of issues that need to be addressed before creating a successful presence on the Internet. The following issues must be considered to achieve success with any electronic commerce site:
• Ease of use
• Security of personal information
• Performance
• Reliability
• Integration with existing systems
• Adherence to open standards
• Access to infrastructure and market space
• Restrictions on contents.
At the time this particular paper was published, the United States Small Business Administration estimated that perhaps one-third of the 24 million small businesses in the U.S. were accepting order on the Web. Moreover, even at that time, the use of the Internet as a means by which to sell and buy merchandise and services from small businesses was already increasing. It is very interesting to look back to 1998 and 1999 and realize that only 427,000 small businesses had joined and were transacting business online. In 2001, when Mehta and Shah published their paper, it was estimated that 56% of the small businesses were online and regarded the Internet as ‘essential’ to the success of their businesses (Mehta & Shah, 2001). As previously mentioned, even though both small and large businesses are making good use of the Internet and e-commerce, the structure of such a way to conduct business appears to be particularly advantageous for small businesses. As Mehta and Shah suggest, the advantages include:
• All sites on the Internet are equal.
• The Internet is considered to be the least expensive way for small businesses to market their goods and services globally. Due to the far-reaching accessibility of the Internet, small businesses have the opportunity to reach the many millions of potential buyers that surf the Internet on a daily basis.
• The Internet allows small business to implement effective globalization strategies, which would otherwise be impossible to implausible due to the complexity and cost of doing business in foreign countries.
• Use of the Internet allows the small businesses to maintain full-scale after-sale customer services at a relatively cheap cost and to maintain contact with the customer for all aspects of business activities on a continuous basis.
• The Internet allows the small business to demonstrate a company’s products and services in a multimedia format.
• The Internet tends to reach younger, more affluent buyers.
• On the Internet small business can save on direct mail, postage, and other catalog expenses.
• The Internet will enable certain companies to dominate the electronic channel of an entire industry or segment, control access to customers, and set business rules (Mehta & Shah,2001, p. 89-90).Mehta and Shah provide another interesting notion in the idea of how information has traditionally been handled in older small business models, and how the processing of information has already been and will likely continue to be done quite differently, based on e-commerce. They contend, “The older, more traditional hierarchical structures found in many small businesses emphasize information and, more importantly, control. This is contrary to information sharing indicating that small business organizations with a flat structure are better suited to information sharing. One reason for this is that synergies of e-commerce depend on a greater understanding of the customer, which in turn requires a free flow of information, both inside and outside of the business. This produces a new type of alignment between the customer and the small business that is more customer driven than product-driven, with more interactions among departments and individuals rather than between an individual and an account representative” (Mehta & Shah, 2001, p. 91-92).
Time and time again the literature over the course of the last decade about marketing and promotion repeatedly emphasizes the seller-consumer relationship as being something more than a transaction. Cook suggests that a significant portion of businesses tend to view marketing as a one-way means of communicating, so that the seller can get a message across to a buyer. Cooks contends that if you were participating in a telephone conversation in which you were unable to hear the other end of the conversation, the content of the conversation would go unheard. With such a mode of one-way communication, there is little opportunity to gather feedback from customers, understand their needs, and tailor and appropriate response to those needs and interests. However, as Cook points out, this is the manner in which many small businesses market their services and their products. Traditionally, the routine in many marketing campaigns has been to design materials with the company message, push them out to your target population (and in some case unwisely inundate the potential consumer), and with any luck, customers will respond. Cook contends, “Marketing monologues, whether in person, in a brochure, or o a website are a sure way to scare prospects and clients away” (Cook, 2003). In order to grow a business, the tendency is increasingly focusing on creating a dialogue and eventually a partnership, in a sense, with potential customers. Cook further notes, “Starting your marketing efforts by creating a two-way conversation with prospects can help you target your marketing efforts and open the door to future business” (Cook, 2003). Moreover, Cook suggests that there are several very basic, yet significant, questions a small business owner should keep in mind in an attempt to ensure two-way communication with consumers and potential customers: 1) How often do you ask your prospects to identify their biggest problem, relative to the service or product you offer 2) How often do you survey your target market to find out what they are worried about 3) Can you list their most pressing concerns 4) Do you use this information to regularly improve your marketing strategy and materials Understanding and communicating with potential customers is only part of the equation. Small business owners also need to reflect on their own thoughts and questions about the business: 1) What’s the biggest obstacle to growing your company 2) What problems are your biggest concerns 3) What are your three most important objectives for the next month 4) What’s the decision making process in your company Cook concludes, “When your communication is two-way you’ll know what prospects and clients are concerned about and your can target your marketing to increase your business” (Cook, 2003).
An additional method suggested by Cook is the use of strategic networking to bring in more business as well as new business. Cook cautions that far too many small business owners focus on handing out business cards, and explaining the nature of their business. This approach to networking, however, has been characterized as ‘playing the lottery.’ The company might get some business from this approach, but it is basically a roll of the dice. Contacts that you might meet often lose cards or just forget about your business entirely. Instead, many successful marketers find that getting the business cards of potential clients is likely to have far more value than randomly handing out one’s own card. This can also help the small business owner gain some information about the prospective customer, and serves as a way to initiate follow-up with the consumer. Cook summarizes the goals of networking and suggests: Pull information from prospects and clients to grow your network stay in touch and regularly demonstrate the value of your products and services. Networking should be one of the core marketing tactics of most independent professionals and small business owners. Use client-centered networking to lessen your reliance on costly and time-consuming cold calling/telemarketing and advertising. Over time, this business building strategy will reward you with a steady stream of new clients (Cook, 2003b).
Throughout the state of Nevada, there has recently been a growing focus of attention on reaching the Hispanic market. Tom Carey, business leader, U.S. Commerce Department, MasterCard Worldwide was recently quote on the website HispanicBusinessNevada.com, “By any measure, that is a huge market, and recent research indicates that the Hispanic sector in the United States is growing not only in size but in economic muscle. Businesses that ignore it do so at their own peril. Businesses that embrace it successfully may be rewarded with a loyal and profitable customer segment” (HispanicBusinessNevada.com, 2011). The implications for successful marketing to this demographic are significant. Spanish SEO, a new search engine marketing firm, reports, “At more than 44 million in 2008, the Spanish-speaking population of the United States, taken by itself, would constitute the third-largest Spanish-speaking nation in the world, behind only Mexico and Colombia, and it represents nearly 10% of the world’s entire Spanish-speaking population” (SpanishSEO.org, 2008).
Projections indicate the Hispanic population is expected to reach 128 million in the United States by the year 2055. Indeed that would represent no less than some 30% of the total population of the entire nation, and this demographic is already known for its impressive economic clout. Additional statistics from Karen Pauli of the TowerGroup, notes the following significant aspects of the growing Hispanic population in America. From there, it is easy to extrapolate the potential revenue that could be generated if a marketing strategy was created and delivered in a manner that was suitable to the Hispanic population.
• The number of Hispanics in the U.S. that earn a yearly income of $100,000 and have assets that are valued around $500,000 is growing eight times faster than the number of non-Hispanics.
• By the year 2012, the purchasing power of the Hispanic population is projected to reach 1.2 trillion.
• Hispanic-owned businesses will grow by 42% from the 2003 baseline, to 4.3 million, with revenues increasing by 39% to $539 billion (Pauli, 2008).
Although not surprising, it is interesting to note just how much of a role social media is likely to play among the Hispanic consumers population. Writing for the website Hispanic Business.com, Villaneda underscores how important it is today for small business owners in particular to have Twitter accounts and Facebook pages. While it was not that long ago such access was considered to be an option for businesses, it has become an essential marketing tool in growing a business. Indeed, even Barack Obama used the power of social media as a tool in his 2008 presidential campaign. Returning to the Hispanic population, however, Villaneda reports:
• There are 13.5 million U.S. Hispanics on Facebook.
• There are 8.1 million U.S. Hispanics who have Twitter accounts.
• Fifty-five percent of influential Hispanics use social media as a way to promote and improve their business.
• As mentioned previously, the U.S. Hispanic community is growing – and Villaneda reports that is the younger generation of Hispanics is one target audience that will boost a customer base exponentially.
• The key for business owners to leverage this influence is keeping in mind that relationships are extremely important for Latinos online, especially when it comes to purchasing decisions… Because these bilingual Latinos revolve around tightly knit networks, the relationships you build with them tend to yield increased recommendations, and consequently drive more business to your company. (Villaneda, 2011).

If past trends can be any indication of what the future may hold for the viability of small business in the state of Nevada, it seems likely that established businesses would begin to experience economic recovery and growth. Moreover, Nevada is reportedly a state that is quite small business friendly, which offers itself as a positive environment for the creation and development of new business in the area. According to the U.S. Small Business Association’s Small Business profile, small businesses are an integral part of the financial well-being in the state of Nevada. Additionally, small businesses contributions are a necessity for the growing economy, as they account for almost all employer firms in the state. Indeed, the numbers speak for themselves:
• There were an estimated 177,282 small businesses in Nevada in 2004.
• Of the 51,424 firms with employees, an estimated 95.7%, or 49,209, were small firms.
• In 2004, the estimated number of employer businesses increased by 5.1%.
• The number of self-employed persons (including incorporated) increased overall by 26.8%, from 91,377 in 2003 to 115,896 in 2004.
• Non-employer businesses numbered 128,073 in 2002, an increase of 7.4% since 2001, based on the most recent data available (Sources: U.S. Dept. of Labor, Employment and Training Administration; U.S. Dept. of Commerce, Census Bureau; U.S. Dept of Labor, Bureau of Labor Statistics). Employment numbers for Nevada additionally represent the presence and support of small firms and their viability in that state:
• Small firms with fewer than 500 employees numbered 40,671 in 2002 and employed 401,565 individuals, or 42.9% of the state’s non-farm private sector.
• Net job gains among firms with fewer than 20 employees totaled 14,245, while large firms with 500 or more employees lost 251 jobs between 2001 and 2002 (Source: U.S. Department of Commerce, Census Bureau, Statistics of U.S. Businesses).
The Future of E-Commerce Marketing Strategies and Small Business The literature on small business and marketing strategies offers many different avenues to consider in trying to grow a small business. It appears that some of the traditional aspects of business and marketing strategies will continue to stand the test of time. However, key changes have already occurred and are likely to continue to evolve in the future. Although the goal remains to attract customers, increase revenue, and expand the business, the perspective from which all of this must be done is much removed from the way such business was conducted in the past. Above all else, it seems to be the case that the consumer has certainly been transformed into someone who is better informed, asks pertinent questions, and understands what is true and why might just be considered hype. Constantinides, in a 2006 paper entitled, The Marketing Mix Revisited: Towards the 21st Century Marketing, suggests:
The new consumer has been described as existential, less responsive to traditional marketing stimuli, and less sensitive to brands and marketing cues while the influence of family or other types of reference groups on the new consumer’s behavior is changing or diminishing. More researchers share the view that the modern consumer is different: demanding, individualistic, involved, independent, better informed, and more critical. A factor underlining the change is the increasing consumer power and sophistication due to wide availability of affordable personal computing power and easy access to online global commercial firms, networks, databases, communities or marketplaces” (Constantinides, 2006, p. 412-413).
As the old saying goes, “Knowledge is power,” and if there is one thing that consumers seem to have an endless source of in the world of e-commerce, it is knowledge. It is no longer easy to convince a consumer to part with his or her hard-earned money. Individuals know what they want before they go to buy, and for the most part, no longer need to rely on the experience or so-called expertise of a sales clerk in a retail store. For the small retailer that wants to grow and expand the business, it is now required that owners of small businesses have to at least keep up with the level of knowledge that consumers possess. Clearly, consumers are far less likely to buy something from someone who appears not to know what he or she is talking about. The power has shifted, the buying and selling transaction field has certainly been leveled, and perhaps caveat emptor will quickly become a thing of the past before we know it.
This obviously creates an challenge for small business marketing in that it requires marketers to think outside the box, so to speak, compared to the familiarity of the 4Ps Marketing Mix framework (or as Lauterborn dubbed it in 1990, ‘the Rosetta stone of marketing education’). This has essentially served as a toolkit for those in the position of working in marketing. Constantinides observes, “Significant cultural, social, demographic, political, and economic influences during the last decades of the 20th century, combined with rapid technological advances have radically transformed the consumer’s needs, nature, and behaviour” (Constantinides, 2006, p. 412).
Given the shifts that have taken place in the world of the retail business, mass marketing approaches are not likely to serve the needs or expectations of today’s consumers. This is especially true given the assessment offered by Patterson and Ward (2000), which characterizes the 4Ps framework as “having an offensive rather than collaborative character” (see Constantinides, p. 418). The literature on the subject makes it crystal clear that two-way communication and a cooperative partnership are what consumers are seeking when they are about to make a purchase.
The fact of the matter is that retailers might view a change of strategy to be somewhat less of a transition than other small business owners. As Constantinides explains, “Consolidation of the retailing sector, globalisation and private branding have transformed the retailing landscape. A significant power migration along the supply chain gave retailers gradually more control over the marketing process and at the same time exposed them to increasing industry competition. Trying to build up strong market positions and competitive advantages, retailers were forced to adopt more professional and proactive commercial approaches, become gradually real marketers, rather than distributors and in-store merchandisers” (Constantinides, 2006, p. 421).
It seems that the business climate across the nation is likely to be waxing and waning for the foreseeable future. Small business will feel the impact but perhaps not as significantly as larger competitors. Small business owners, in particular, who are operating in the state of Nevada, have a number of advantages on their side, based on the entrepreneur-friendly business environment that has existed, and continues to exist, in Nevada. Additionally, a number of small businesses have also partnered with the business school at the University of Nevada at Las Vegas and support of that nature is helping to strengthen small business in Nevada.
Marketing strategies, while certainly quite helpful at times, are probably not sufficient on their own to keep small business viable and competitive in the open market. For retailers, an additional strategy that could prove beneficial in growing their businesses is to introduce a new and related product line that complements their basic company brand. Creating a place in a retailer’s inventory for niche products can also serve to have a positive impact on the continued growth and development of an already established business.
CHAPTER III: METHODOLOGY

3.1 Introduction
Literature review revealed a background of small business operations within the state of Nevada and the U.S. In addition, literature identified various promotional techniques and resources available, as well as emerging venues that can assist business owners compete. One resource identified as having the potential to offer small businesses opportunities to grow at low costs is the internet as it offers businesses access to a large market and increased diversification making them more competitive. Literature has identified that for small businesses, the owner is the entrepreneur, operator and decision maker for every aspect of the business. Though the style of leadership of the owner and the financial situation of the business affects the business, other factors are at play like diversity, business size, complexity, organizational and management style (Churchill and Lewis, 1983).
A review of Literature has identified several strategies through which small businesses use to survive in a highly competitive market. Small retailers can promote businesses by focusing on consumers’ concern (McGee and Ruhbach, 1997). They can also customize offerings to consumers, provide personalized customer service and get primary data faster than larger retailers. However, literature has proven that an important factor is the ability of small businesses surviving in a highly hostile environment (McGee & Rubach, 1997; Covin & Covin, 1990; Davis, Morris and Allen, 1991), especially from large discount chain stores (McGee & Rubach, p. 83). Literature review provided several promotional strategies and resources small businesses can use to survive hostile environments. For example, the “Zero-sum game” was used by Wal-Mart as it made use of discount mass merchandiser (Taylor & Archer, 1994; Welles, 1993; Ozment & Martin, 1990). Apart from this strategy, literature reveals that in the state of Nevada, small businesses can enjoy the benefits of government services for struggling, existing and starting businesses (Baumer, 2011), since the federal government is the largest consumer of goods and services (Small Business Resource Nevada, 2011). Several services provided by the Federal government can assist in promoting small businesses, these include tax cuts, jobs Act and SBA’s international Trade loans and Export Working Capital, hence small businesses can enjoy expansion and growth through exporting (Small Business Resource Nevada, 2011).
Small businesses should also consider the fact that though consumers may be exposed to many promotional advertisements daily, they tend to follow predictable shopping patterns, therefore, businesses must strive to develop credibility and sell established brand items (Nevada Small Business Success, 2010). Moreover, small businesses in this state can enjoy the benefits of a healthy entrepreneur environment created by the government and Nevada small Business Development Center (NSBDC). Though this assistance exists literature review has proven that the owners of small businesses must strengthen and support their businesses. This is linked to the identification of a target market, understanding its needs, and communicating the business’ compelling messages through multiple channels (Richards, 2011). Therefore, owners should consider communication channels like television, newspapers, and radio and accommodate new channels like the internet and social media. They can use creative options to enhance messages like graphics, sound, and video and find more consumer choices.
This chapter details research process used in the collection, analysis and interpretation of the research questions that will assist in identifying promotional strategies found in research and linking with the above strategies from literature. According to Kumar (2005) for this dissertation to qualify as research, the process used must satisfy several characteristics. The research method used must be systematic, controlled, critical, verifiable, rigorous and empirical. Hence, the research method utilized accepted qualitative methods to solve problems. In the process of carrying out the research, new knowledge was created in the identification of effective promotion strategies for small retail businesses in the state of Nevada. The methodology selected fell within a set of research philosophy approaches. The research had a sound basis since it was establishment on research philosophical foundations. To achieve this endeavor the research tried to clarify the research objectives and rationale of the research study. Through the use of qualitative research techniques, the research process made use of methods that have been historically scientifically tested for consistency and validity. The qualitative research method discussed in this section is based on the “multiple case study”.
3.2 Research Objectives
The objectives of this chapter are:
o To identify research approaches in literature relevant to the study.
o Homework help – Discuss in details the appropriate data collection method selected, and
o Identify any assumptions, biasness, perceptions and inference made in the study.
3.3 Research Questions
Research is the “careful systematic investigation of a field of knowledge taken in order to establish facts and answer questions” (Kumar, 2005). Therefore, the first step is the identification of research questions which will assist in guiding the investigation process. Research questions were identified from fundamental objectives of the study. These questions were identified as follows:
Where the main question was obtained from the research topic
o What are the effective promotional strategies that small businesses in Nevada can use
To carry out a comprehensive research which answered the above question in totality, supporting questions were developed as identified from the objectives and the extensive literature review. The small business owner should ask the following questions;
o Does the promotional strategy carry out a broad external marketing environment analysis to evaluate macro-environment products and services will face like demographics, economic, competitive, social cultural, political and legal and technological factors Where;
• What is the target market based on Age, income, occupation, family size, marital status, residence, interests and hobbies; Customers wants, like Is the product needed for a limited time Are customers looking for quicker service Do customers want guarantees with the products Will customer come frequently or seldom Are customers looking for a wider distribution or more convenient locations
• Does the promotional strategy chosen factor in competitor analysis
• Does the promotional strategy enable the business factor in strengths, weaknesses, opportunities and weaknesses For example the effects of the recession on small businesses or benefits of a healthy entrepreneur environment created by the government and Nevada Small Business Development Center (NSBDC).
• What are the trends; Population shifts Legal or regulatory developments Changes in the local economic situation Lifestyle changes
o Are there appropriate communication channels, new emerging channels like the internet and social media and creative options to be considered in the promotion of the business
o Do compelling message promote the business and its products

3.4 Research Approach
For an effective qualitative research, several research paradigms, issues of ontology and epistemology are to be considered as identified by Flowers (2009, p.2). The reason is that these philosophical bases assist the research define beliefs, perception, assumptions and nature of reality in the methodology. These parameters assisted in the influencing the manner in which the research was carried out from the beginning to the end (Saunders, Lewis and Thornhill, 2009). A philosophical basis is vital because it assists the researcher with the methodology through;
o The refinement and specification of research method and the answering of questions, in terms of evidence identified.
o Assist the researcher critically evaluate a variety of methodologies to easily identify appropriate approach to research.
o Assist the researcher to identify and select research methods which may be out of their experience (Flowers, 2009).
3.4.1 Research Paradigms
These paradigms were used for an in depth qualitative research method since they are prevalent within the field of management science. This research opted to make use of “Positivist” paradigm since is offers research a point of view based on natural sciences. In addition, the paradigm was found useful for it is based on the testing of hypothesis founded on theory. Therefore, it created a method that was deductive in the evaluation of observable realities. According to Flowers (2009), the positivist paradigm is based on reason, validity and truth and puts attention on facts, where facts are derived from pure observations and which are analyzed through qualitative techniques (3). Therefore, this paradigm made the assumption that the identification of promotional strategies for small businesses can only be achieved through qualitative analysis of available marketing strategies in literature. Therefore, based on this approach, research only dwelt on data and information gained from facts from surveys, studies and scholarly literature obtained from libraries. This approach therefore ignores data obtained from perceptions on information.
In order to have a valid qualitative research method, this limitation was overcome by considering the “interpretivist or Constructivist” paradigm. This paradigm is founded on the basis that a difference exists between social and natural sciences, hence, people will make sense based on expectations, experiences and memories (Hatch & Cunliffe, 2006; Blaikie, 1993). Therefore, within this paradigm research arrives at meaning through the experiences of the researcher. Consequently, the interpretation of information is based on the foundation that there are several realities. For this reason, this research the focal point was on an understanding of the interpretations made by the researcher, making the research method subjective in nature and therefore adopted a qualitative data collection method. The data for the research problem was derived from interpretations made. For this research to be objective biasness from interpretations of the selected population was removed and a dynamic view was adopted that looked at several points of view.
In order for the research method to link determinist information gained from empirical scientific information of literature and the relativist information of interpretations, a “Realist” paradigm was used (Flowers, 2009, p.3). This paradigm made it possible for the research approach to have both a relativist and determinist bases, as the researcher looked into the underlying strategies and resources used for effective promotions and how these can affect small businesses in Nevada. For this reason, the research method selected analyzed available literature from various case studies in order to have different angles. The research method selected therefore had an inductive element since its analyzed data from collected studies and made interpretations on information derived.
3.4.2 Philosophical Conditions
Since the research method selected is purely qualitative it is vital to identify any assumptions, perceptions, beliefs and nature of reality in the research. According to Easterby-Smith, Thorpe and Jackson (2008) this is done to reduce the existence of personal inference from preconceived perceptions and assumptions. The condition of “Ontology” was considered since it is draws from social sciences by looking at “what makes thins up and how elements interact” (Blaikie, 1993). The approach defined the researchers views on reality in relation to objectives and subjective realities. Studies carried out by Hatch and Cunliffe (2006) prove how human beings posses deep rooted ontological assumptions which affect views on reality. This is because these assumptions are directed by inner conditions of control, power and culture which create a complex existence of our reality. For this reason any credible and valid research must identify any assumptions that may cause the research to have biasness and consequently create wrong conclusions based on personal perceptions. For this reason, several assumptions were made in the cause of this research:
o The problems of small businesses are very important given the current sate of economy.
o Researching on small businesses is vital for they are the main drivers of the economic growth in Nevada and America.
o The success of small businesses is tied to the hopes and dreams of those intrepid souls who venture into the marketplace with a good or service, in hopes of making a success of it.
o There are U.S. government and private resources are available to help small business owners grow their companies and compete with larger firms in an industry, but some industries are better suited for a small business configuration than others.
o The explosion of e-commerce and online marketing available today has complicated the picture for small businesses. In the rush to jump on the Internet bandwagon, many small businesses have failed to realize the advantages and benefits this medium can provide by ignoring some fundamental marketing principles that can make or break a small business.
o This research also made the assumption that only validated data collection methods identified by credible bodies would produce reliable information.
Apart from perceptions, it is also deemed vital that values were considered in the research. This was done through the condition of “Axiology” which is defined by Graham (2004) as the study of values. This condition was considered since it represents the pattern of choices made by humans based on religion, politics and culture or our cultural elements, which define our clothes, language, what we write, read, watch and the gods we pray and how we select friends. A critical analysis of the research method selected revealed that the research was not founded on any established beliefs and values of the researcher that would have affected the study. Therefore, the probability of biasness caused by religious, political r cultural beliefs and perceptions by the researcher were reduced to zero.
An important philosophical condition that was used in the research process was “Epistemology” which is described by (Easterby-smith, et al., 2008; Eriksson & Kovalainen, 2008) as what defines knowledge (Flowers, 2009, p.2). Eriksson & Kovalainen, (2008) describes how “knowledge in the area of research is defined in terms of what makes it up and the manner in which it was formed and argued”. Therefore, this condition was applied to this research method for it deals with the appropriateness of chosen research method and how best it can be used to gather valid information. Therefore, the research made use of valid and proven qualitative research method to offer sound information, by making use of the method of “multiple case study” of credible scholarly documents. Further credibility and validity was attained by meeting the research objectives to ensure that data and information gathered was congruent with the main objective of the research.
Therefore, the “Research approach” used in this research is the realistic paradigm based on induction. Research is carried out from different angles and from different levels; National and at the state of Nevada, for small businesses, to have various perspectives to seek valid information on effective promotional strategies. The expectation is that information gained would reveal the resources and strategies available in the market that can assist small business owners promote their businesses effectively. Assumptions of the research were based on the ontological perception of small businesses in America. The qualitative research method selected for this research was “Multiple case study” analysis over “Single case study” or “ethnographic research”.
3.5 Research Instrument
The qualitative data collection method selected for this research is the “multiple case study” from secondary sources of data. This method is used since it is validated and credible by previous qualitative studies and researches. Case study has been used as a valid and credible strategic qualitative research method. Though case studies are criticized by authors as lacking in scientific strictness and the inability to addressing generalization, this research paper reiterates this since the method is proven to be effective in complex real life situations. The method is selected since it is widely and commonly used in the fields of social sciences like management, anthropology, industrial relations and sociology (Noor, 2008). Therefore, this section proves the validity and credibility of using this method in terms of its strengths and weaknesses. Zainal (2007) discusses how case study as a qualitative research method, allows “a researcher to go beyond the limitations of quantitative statistical results and understand the behavior conditions through perception” (1). Case studies are able to carry out this function since, they “enable a researcher to closely examine the data within a specific context, as they explore and investigate contemporary real-life phenomena through detailed contextual analysis of a limited number of events or conditions, and their relationships” (Zainal, 2007, p.2). Denzin and Lincoln (1994) explained qualitative research, as “an emphasis on processes and meanings that are not rigorously examined, measured {if measured at all}, in terms of quantity, amount, intensity or frequency” (3-4).
Case study is the investigation of an entity, event, or unit of analysis, with empirical enquiry on contemporary phenomena in real life context drawn from multiple sources of evidence. Case study does not study an entire entity but rather focuses on particular issues to understand and examine processes from multiple sources of evidence (Noor, 2008). Therefore, for this research the multiple case study analysis was selected since it allows the researcher to focus on a specific real life situation, the “identification of effective promotional strategies for small businesses in the state of Nevada”. The research method is also applicable since it draws from various sources of evidence, for this research evidence was drawn from literature drawn from scholarly sources available from online libraries like the university library and Ebscohost website. This method was selected since it made it possible for the research to focus on a single particular problem in depth and draw data from rich cases on the problem.
The multiple case study method is used since it has proven to be advantageous, for it offers the researcher the ability to have a holistic point of view on certain events and have a rich picture from multiple evidences used. This advantage has been optimized for this research since according to the selected relativist philosophical approach used also seeks a dynamic view. The other advantage of case studies is that they offer research emergent and immanent properties of promotional strategies as they change very fast in the market (Noor, 2008). Case studies are richly qualitative research method for they allow a research to have a rich generalization on findings based on multiple cases. Zainal (2007) associated with another advantage of case studies, since “case studies not only help to explore or describe the data in real life environment, but also help to explain the complexities of real life situations which may not be captured through experimental or survey research” (4).
The other advantage of carrying out a qualitative research based on evidence from case studies is that, the case study allows the examination of data to be conducted in the context of its use (Yin, 1984). This implies that the research will examine information within the given situation in accordance with activity taking place. For this research this implies that evidence collected was based on stated information of tested promotional strategies and resources that exist in the American market which can be effectively used by the small business in Nevada. Zainal (2007) recommends that for this to occur, the research must explore strategies used by making observations of subjects in their environment (4). For this reason, this research looked at businesses operating in the current American business environment and how they use promotional strategies to grow. These findings are then applied to the situation of small businesses in the state of Nevada.
Multiple case studies were selected since there is proof that the research topic at hand had numerous sources of evidence (Zainal, 2007). This method was used since the rich evidence of promotional strategies and resources available in America can be applied to the case of small businesses in Nevada by pattern matching. By using multiple case studies the level of confidence in the robustness of the research method can be assured as it supports evidence obtained from literature review. The multiple case study was used since according to Yin (1993), “multiple case studies should follow a replication, not sampling scientific logic. This means that two or more cases should be included within the same study precisely because the investigator predicts that similar results (replication) will be found. If such replication is indeed found for several cases, you can have more confidence in the overall results. The development of consistent findings, over multiple cases, can then be considered a very robust finding”(33-35).
The case study method used for this research made use of descriptive research method to describe the various promotional strategies available in the market that can assist small businesses in Nevada to effectively market. Descriptive case studies allow the description of natural phenomena that occur in the data under question, for example, the different promotional strategies used by businesses in America and how these strategies can be used effectively by small business owners in Nevada. The research process first step towards this was the carrying out of an extensive literature review within the subject context to study existing evidence of available strategies and resources for effective promotion.
In order to construct a framework of the research, extensive research was carried out on this literature as well as available scholarly information from libraries to gain valuable information on the research problem. Of importance to this rich research were the opinions of academic supervisor, university staff and fellow students, which provided the research with an understanding of the topic explored. Documentary sources of data were used to supplement the convectional quantitative scientific data collection methods and assisted in overcoming the imitations of these methods. Documentary evidence used in this research acted as the method for cross validating information that was gathered from the literature review and observations made in the process of critique of literature. Documentary evidence provided this research with guidelines that assisted in the investigation process.
Literature has identified several disadvantages with case studies which will be identified and overcome within this research. There are several arguments against case studies as found in the documents of (Zainal, 2007; Noor, 2008; Yin, 1984). Yin (1984) noted that for many case studies, “the investigator was sloppy and allowed equivocal evidence or biased view to influence the direction of conclusions and findings” (21). To solve this problem, this research made philosophical considerations of ontology, axiology and epistemology to get rid of any underlying assumptions, beliefs, and perceptions, political, social, cultural and religious ideologies that may influence the direction of the research. To eliminate beliefs, perception, assumptions and nature of reality in the research, philosophical paradigms were considered. The positivist paradigm assisted the research to base information on deductive evaluation of observed realities based on facts found in theory and ignored data from perception. Since personal views and experiences interfere with information, this research sought an interpretivist paradigm, in order to have a dynamic view of literature viewed. The research made use of inductive element of the realist paradigm since its analyzed data from collected studies and made interpretations on information derived.
Secondly, case studies have been associated with lengthy documentation which is difficult to produce and conduct (Yin, 1984), especially the Ethnographic or longitudinal research method. The problem with the methods is the difficulty in organizing and managing the vast amount of information, therefore making it difficult for anyone analyzing this data to gain consistent information. For this reason, this research avoided ethnographic research method and settled for multiple case studies. Thirdly, Yin (1984) argued that the “single case study made it difficult to generalize. Therefore, case studies provided very little basis for scientific generalizations since they used a small number of subjects, some conducted with only one subject” (21).in order to overcome this short coming, this research opted to employ the use of “Multiple Case Studies” since they were based on a wide knowledge base from various documented evidence, that provided research with valid and credible results gained from the replicated results. The basis for multiple case studies is the consistency in findings on the effective promotional strategies and resources available in America that the small business in the state of Nevada can use to improve marketing and realize increased growth despite the recent recession.
An important note is that case studies are not entirely qualitative in nature, but can also be entirely based on quantitative evidence (Yin, 1984). For this research the interest is the qualitative evidence found in documents, that will assist the research describe data found in real life environment on the promotional strategies and resources available that small businesses can employ.
3.6 Research Site
Since the research method in qualitative in nature, the research site is not physical in nature. Research is carried out in America and focuses on promotional strategies and resources used and how small businesses in Nevada can effectively employ these to promote business. To this end this dissertation will mainly focus on the United States as a whole and also apply the research and findings to the state of Nevada. This site is selected since in the state of Nevada along with the rest of the United States small business is the engine of economic growth. This is because, according to the Association of Small Business Development Centers states that there are currently over 22 million small businesses in the United States and the number is growing rapidly, with over 800,000 started in 2009, alone. Small business accounts for 99 percent of all U.S. businesses. These small businesses employ 53 percent of the private work force and contribute over half of the nation’s private gross domestic product.
3.7 Research Sampling
The research chooses to study small businesses in the State of Nevada. Since, the primary limitation of the study is that not much has been written specifically concerning the identifying effects of promotion strategies for small retail businesses in the state of Nevada. To this end this dissertation will mainly focus on the United States as a whole and also apply the research and findings to the state of Nevada.
3.8 Conclusion
A qualitative data collection method is used, where a review of relevant literature on small businesses and the promotional tools and techniques used in America is carried out. This critically employed the appropriateness of “multiple case study” as opposed to “single case study” or “ethnographic research”. This is because single case study made it difficult to generalize, while Ethnographic or longitudinal research method is associated with lengthy documentation which is difficult to organizing and managing the vast amount of information. This research method selected made use of philosophical considerations of ontology, axiology and epistemology to avoid underlying assumptions, beliefs, and perceptions, political, social, cultural and religious ideologies that may influence the direction of the research. To eliminate beliefs, perception, assumptions and nature of reality in the research, philosophical paradigms were considered. The positivist paradigm assisted the research to base information on deductive evaluation of observed realities based on facts found in theory and ignored data from perception. Since personal views and experiences interfere with information, this research sought an interpretivist paradigm, in order to have a dynamic view of literature viewed. The research made use of inductive element of the realist paradigm since its analyzed data from collected studies and made interpretations on information derived.
CHAPTER IV: DATA ANALYSIS
4.1 Introduction
The research question that answered in this research was; what are the effective promotional strategies that small businesses in Nevada can use To have a comprehensive research, other questions derived from specific objectives were answered, these were; Does the promotional strategy carry out a broad external marketing environment analysis to evaluate macro-environment products and services What is the target market; Age, income, occupation, family size, marital status, residence, interests and hobbies Does the promotional strategy chosen factor in competitor analysis Does the promotional strategy enable the business factor in strengths, weaknesses, opportunities and weaknesses What are the trends; Population shifts Legal or regulatory developments Changes in the local economic situation Lifestyle changes Are there appropriate communication channels, new emerging channels like the internet and social media and creative options to be considered in the promotion of the business Do compelling message promote the business and its products
To answer these questions the research made use of the qualitative data collection method of “Multiple Case Study” and reviewed literature on effective promotional strategies for businesses in America. The research took on a philosophical approach, which was deductive, valid and credible and eliminated bias, perceptions and personal inference. In the process several assumptions were made concerning the research problem, these were:
o The problems of small businesses are very important given the current state of economy.
o Researching on small businesses is vital for they are the main drivers of the economic growth in Nevada and America.
o The success of small businesses is tied to the hopes and dreams of those intrepid souls who venture into the marketplace with a good or service, in hopes of making a success of it.
o There are U.S. government and private resources are available to help small business owners grow their companies and compete with larger firms in an industry, but some industries are better suited for a small business configuration than others.
o The explosion of e-commerce and online marketing available today has complicated the picture for small businesses. In the rush to jump on the Internet bandwagon, many small businesses have failed to realize the advantages and benefits this medium can provide by ignoring some fundamental marketing principles that can make or break a small business.
o This research also made the assumption that only validated data collection methods identified by credible bodies would produce reliable information.
4.2 Presentation of Findings
4.2.1 Literature Review Findings
A review of literature revealed that there are various promotional strategies and resources available for businesses in America. McGee and Ruhbach (1997) proved in their research that small retailers can promote businesses by focusing on consumers’ concern. They can also customize offerings to consumers, provide personalized customer service and get primary data faster than larger retailers, therefore given them a competitive advantage over large retailers. Another strategy that small scale retailers can use to compete is the “Zero-sum game” was used by Wal-Mart as it made use of discount mass merchandiser (Taylor & Archer, 1994; Welles, 1993; Ozment & Martin, 1990).
Other promotional strategies proposed is the use of “Marketing Concepts” as promoted by (U.S. Small Business Administration (SBA); Jedidi, Mela, and Gupta 1999; Ferrell and Hartline, 2010; Kotler and Kevin, 2009). These researchers have proposed that small business managers must realize that there is need for understanding and development of marketing programs for their businesses’ services and products. They proposed the use of “Marketing Concepts” found in a multitude of written literature on business management and marketing strategies. Marketing concepts here in imply the concepts of; market research, market strategy, target marketing, and the managing of market mix (Jedidi, Mela, and Gupta 1999).
SBA (2011) proposed the use of market research since it offers small businesses information about the market that assists in the effective management of marketing functions. Kotler and Kevin (2009) recommend market research, which involves the conduction of an analysis on the market activities and the interpretation of data, obtained from supplies and consumers and makes it possible for the gauging of the market environment. SBA recognizes that an effective market research can provide small retailer information on trends that affect sales and profitability like: population shifts, economic situations, legal and political developments, competitor activity and strategies, identification of opportunities and problems. Raghavan and Cafeo (2009) proposed that market research is carried out through primary or secondary methods, where Primary researches are field researches that involve an environmental assessment while the secondary research is a research that is conducted from recorded data.
The other marketing concept useful is marketing strategy, which is the identification of groups of customers or target market. SBA (2011) recommends the use of target market for small retailers as a means to better serve consumers, tailor products and services to consumer needs, and offer prices, promotional efforts and distribution services for a particular market. McGee and Ruhbach suggested that since small scale retailers cannot replicate competitive pricing like large scale retailers, they can focus on consumer’s concerns through superior level of service often overlooked by large scale retailers (1997, p. 92). Raghavan and Cafeo (2009) in their literature realized that an effective marketing strategy is based on B2C or B2B strategy, using available technology in the market, and which develops an advertising campaign and brand development system, that satisfy customers and creates consumer loyalty. Additionally, as (Jedidi, Mela, and Gupta 1999; Ferrell and Hartline, 2010) realized target marketing can assist retailers improve their promotional strategies, since it allows them to concentrate the little resources they have to a market segment rather than the whole market. SBA recommends small-scale retailers to use either geographical; like neighborhood convenience store or consumer segmentation like groups of people based on age; economic, lifestyle and preferences. Constantinides observes, “Significant cultural, social, demographic, political, and economic influences during the last decades of the 20th century, combined with rapid technological advances have radically transformed the consumer’s needs, nature, and behavior” (Constantinides, 2006, p. 412).
The fourth marketing concept is management of market mix entailing; product and services, promotions, distribution, and pricing or the 4Ps of marketing (SBA, 2011). The traditional 4Ps of marketing can be improved with two-way communication and a cooperative partnership, as recommended by (Constantinides, 2006, p. 418). Additionally, Networking is recommended as a core marketing tactic for independent professionals and small business owners, as identified by Banning (2010), where social media and marketing tools have been effectively used by small retailers in Nevada. Banning (2010) identified social media marketing tools like web based company websites, FaceBook, Twitter, and Flickr to be very effective in offering small retailers a platform to interact with clients, promote products and services, offer low cost marketing methods, and brand products and services. For example, in Banning (2010) report, the owner of Reno eNVy in Nevada, has successfully used web based technologies to reach a market via the company’s website, 2,241 fans on FaceBook and 1,010 fans on Twitter. This businessman spreads the word about a store sale through social media. He advertises on Facebook for $5 a day, which yields him 15,000 to 20,000 impressions daily. Customers frequently send him photos, which end up on the store’s photo-sharing account at Flickr. The 42-year-old owner uses social media marketing to expose his apparel store in Reno with the hope of becoming Nevada’s signature brand. While daunting at first, social media now for him is easy, fun and beneficial to his business, he said. ‘Without question, it has gotten people into the store,’ he added” (Banning, 2010). This presents a perfect example of a Nevada small scale businessman who has successfully made use of the social media to cost effectively promote his store and increase the business’s market and profit base, without necessarily hiring a marketing firm.
In addition, the literature of Mehta & Shah (2001), proved that the internet and online services are useful for businesses, the advantages of this tool include; All sites on the Internet are equal; The Internet is considered to be the least expensive way for small businesses to market their goods and services globally. Due to the far-reaching accessibility of the Internet, small businesses have the opportunity to reach the many millions of potential buyers that surf the Internet on a daily basis; The Internet allows small business to implement effective globalization strategies, which would otherwise be impossible to implausible due to the complexity and cost of doing business in foreign countries. Moreover, the use of the Internet allows the small businesses to maintain full-scale after-sale customer services at a relatively cheap cost and to maintain contact with the customer for all aspects of business activities on a continuous basis; The Internet allows the small business to demonstrate a company’s products and services in a multimedia format. Additionally, Mehta & Shah (2001) recommended the Internet since it tends to reach younger, more affluent buyers, and while on the Internet small business can save on direct mail, postage, and other catalog expenses. The Internet will enable certain companies to dominate the electronic channel of an entire industry or segment, control access to customers, and set business rules (Mehta & Shah,2001, p. 89-90).
Richards suggests, “Ultimately, successful marketing is about identifying a target market, understanding its needs, and communicating the business’ compelling messages through multiple channels. These marketing messages all convey how consumer needs can be met by the business’ products and services (Richards, 2011). According to Batra (2006) the best retail advertising is the one that give the customer with plenty of specific information, in order for them to immediately visit the retail store and buy the items (105). Therefore, Batra (2006) suggests that effective management of the retail advertisement will aim at the creation of a sense of curiosity, desire, and urgency to get the attention of the potential customer (105). Word-of-mouth takes on a whole new meaning as the small scale retailer makes use of communication choices like television, newspapers, and radio, Internet and social media, and graphics, sound, and video to enhance the messages and brand the business and products (Richards, 2011).
Dylan suggested that, “There are some generally accepted strategies to use when competing against larger, more established competitors. These strategies have been used successfully by companies of all sizes to drive sales and carve out a sustainable position in the market, even when up against the leading company in a given market. They apply to online commerce and traditional small businesses” (Dylan, 2007). These include: taking an alternative position, by surveying the competitor environment and determining the business position to take; selling what the competition does not have. In addition to this, Konoozi Web Design (2011) recommended small retailers to; have a market plan; create internet presence; please ideal consumer; construct and manage social media plan; share passion for your business; create marketing message; network with local businesses and have a consumer referral program.
There are many resources available in America for small retailers to use to promote their businesses. SBA recommends various secondary sources of market information for small retailers like; government publications from the U.S. government Printing Office, U.S. Small Business Administration publications, and the Bureau of Census for census data. Data on population trends, demographics, and business numbers can be obtained from: Catalog of U.S. Census Publications, Census of Business offering (Census of Retail Trade; Census of Wholesale Trade; Census of Selected Services; Census of Manufacturers; Census of Population), Statistical Abstract of the U.S., State and Metropolitan Area Data Book, county and City Data Book, and County Business Patters. Other Agencies offer data are: Measuring Markets, which is a guide for the use of state and federal statistical data offering information on income, sales, selected taxes, employment, and population. Additionally, there are publications that aid businesses and industries like Statistics of Income, Statistical abstract that offers statistics on National, state, county and city data and Statistical Abstract and Measuring Markets offering volumes of these statistics. As Haviland & Savych noted, “Great strides have been made in recent years to create data sources useful for conducting research on small business and its policies… Created by the Census Bureau and the Bureau of Labor Statistics, which allow for the study of business entry and exit (which is especially relevant to small business policy) as well as changes within establishments and firms to be studied over time” (Haviland & Savych, 2007, p. 38).
There are general marketing resources like: C.E. Merrill Publishing Co.; direct Marketing; Goodyear Publishing; Market Principles; Marketing (Basic Concepts and Decisions); Basic Marketing (A Managerial approach); Prentice Hall; Marketing Management (Analysis Planning and Control); Small Business Books; Business Publications; Small Business Management Principles; Successful Small Business Management; Small Business Management (A Guide to Entrepreneurship); McGraw-Hill Book Company (SBA, 2011). Additionally, SBA (2011) identified other sources of information like: Small Business Management Fundamentals; Wadsworth Publishing company; and Small Business Management (Essentials of Entrepreneurship). Moreover, the research market also offers magazines, articles, and journals like: Advertising Age; Business Week; Industrial Marketing; Journal of Retailing; Modern Packaging; Progressive Grocer; and Sales and Marketing Management. This list also includes certified marketing associations, which are listed in the Encyclopedia of American Associations, and include: American Advertising Federation; American Marketing Association; National Association of Purchasing Management; and Sales and Marketing Executives International (SBA, 2011). These secondary sources of information can be used by the small retail owners in Nevada, to carry out market research, determine trends and identify the best marketing strategy.
Apart from these strategies, literature reveals that in the state of Nevada, small businesses can enjoy the benefits of government services for struggling, existing and starting businesses (Baumer, 2011), since the federal government is the largest consumer of goods and services (Small Business Resource Nevada, 2011) and seeks to support this sector. Several services provided by the Federal government can assist in promoting small businesses, these include tax cuts, jobs Act and SBA’s international Trade loans and Export Working Capital, hence small businesses can enjoy expansion and growth through exporting (Small Business Resource Nevada, 2011). Moreover, small businesses in this state can enjoy the benefits of a healthy entrepreneur environment created by the government and Nevada small Business Development Center (NSBDC). The Small Business Survival Index highlights the following advantages with regard to the state of Nevada: No personal income, individual capital gains, corporate income, corporate capital gains, and death taxes; Low level of state and local government employees; Low workers’ compensation costs; High consumption-based taxes; High unemployment taxes; High state minimum wage (SBSI, 2011).
4.2.2 Case Study Findings
4.2.2.1 Strategies to Compete Against National Discount Chains
Achua and Lussier (2001) carried out a study to find out is strategies used by small retailers and if these strategies found in literature assisted them to compete with large retailers. The study was carried out in four small towns in SouthWest Virginia, where 62 small-scale retailers were personally interviewed via a questionnaire. The study looked into the use of the theoretical promotional strategy of Retail mixing (management of market mix) consisting of product and services strategies, pricing strategy, promotional strategy and distribution strategies. Product and services strategies entail the mix and variety of products and services on offer. 34% of the retailers had successfully used product line expansion to compete with large discount stores, with only 3% completely changing their product line and store format to compete. According to Achua and Lussier (2001) today’s consumers are very sensitive to pricing, are willing to pay premium for differentiated products and services. Hence, small retailers must seek pricing strategies as they compete with “Every Day Low Price” discounters like Wal-Mart, Kmart, and Target, through “Niche Marketing”. This survey showed that successful pricing strategies used by South-West Virginia small retailers include, 37% retailers lowered prices to match discount stores, 3% avoided price competition, 2% brought new product lines while 16% made minors changes to prices. However, the survey revealed that though the retailers could not change their pricing strategies to match and compete with those of the large-scale competitors, they laid emphasis on improvement of consumer services. The survey showed that 77% of the small-scale retailer turning to improved consumer services to compete with the larger retail stores. This is in line with literature, where McGee and Ruhbach suggested that since small scale retailers cannot replicate competitive pricing, they can focus on consumer’s concerns through superior level of service often overlooked by large scale retailers (1997, p. 92).
The survey also studied the promotional strategies of small retailers in this region. The survey revealed that 50% of the retailers increased their promotional strategies to compete with large scale retailers. These retailers successfully used communication channels with consumers to promote mix elements like; advertising, publicity, sales promotions, visual merchandising, personal selling and store atmosphere. The survey revealed that these retailers were limited in resources therefore could not promote like large scale retailers that had access to strategies like promotion mixes of advertisement, campaigns, sales, and public relations. The study showed that the small-scale retailer tried to make use of these strategies through the word-of-mouth, local event sponsorship, local radio and newspaper advertisements.
4.2.2.2 Push and Pull Marketing Strategies
Rimlinger (2011) revealed that the current economic downturn affected businesses, caused mergers, acquisitions, and franchising of businesses. The article revealed that to increase consumer loyalty during an economic crisis, businesses can use direct marketing by pushing brands to the consumer, via direct mail, or newsletters. The recommendation is that businesses: identify those triggers that make secondary consumers primary consumers; learn categories of products important to primary consumers; create custom trade regions and target clients to optimize integrated media (Rimlinger, 2011). All marketing must be tracked despite the media used. The article recognizes that in this age, consumers are addicted to mobile technology, therefore businesses should use mobile coupon advantage. For example, the iPhone and Android Smartphones have been created with an added application called “Money Mailer”, to advertise products, services and businesses. The article also identified social media as a low cost communication channel to increase communication and develop relationships between businesses and consumers. Rimlinger (2011) identified social media like Facebook, Twitter, Youtube, and Linkedln as tools that strengthen a marketing plan, where branding occurs, consumer feedback is received (15). Social Media have been identified as a useful tool for marketing strategy since they offer businesses an opportunity to analyze key target market, through the gathering of demographic data based on the number of fans and their reaction. Rimlinger (2011) has identified data obtained from social media as useful as it offers opportunities to determine other pull and push marketing strategies (16).
This article shows that a business that seeks to gain a competitive edge in today’s economy has to realize its opportunities like the availability to cost effective marketing tools like the social media applications and technologies. The article recommends that businesses makes use of the presence of such technologies to advertise, gather market information, create a marketing campaign and develop a market strategy from feedback readily available for social Media.
4.2.2.3 Empirical Investigation of Customer Orientation construct of Entrepreneurial Strategy Making
Andotra and Pooja (2008) to understand and adapt changing customer lifestyle, preference, behavior, opinions, desires, buying capacities, needs, habits e.t.c as prerequisite to strengthening and building marketplace for small-scale industries products, carried out this research. The research showed that there was a correlation between organizational marketing mix and consumer socio-demographic influences. The socio-demographic characteristics identified as influencers are gender, education, age level, income level, and nature of profession. These influence the choice of marketing mix, for; product, price, promotion, distribution, and social welfare. This survey proved that consumers’ orientation emphasized on the understanding of businesses’ target customers and is associated with product success. The marketing mix chosen for any business is determined by known consumer behavior, which is under the direct influence of socio-demographic factors indentified. By continuously satisfying these consumers with a varied marketing mix, businesses can attain a suitable competitive advantage where they provide consumers with low priced quality products and differentiated products for market niches (Andotra and Pooja, 2008).
4.2.2.4 Pricing and Marketing Strategies
Li, Sexton and Xia (2006) a survey on grocery retailers power to influence prices through marketing strategies. The researches empirical evidence showed that the price reductions for retailers were attributed to sales strategies. These retailers also promote their businesses by carrying multiple brands of products in their stores and having promotional sales. The retailers differentiated their products from those of the competitors through private labels. The study identified several promotional strategies, which can be used by food retailers to increase their competitive advantage. Li, Sexton and Xia (2006) identified these strategies as: “the holding periodic slaes irrespective of conditions in the upstream market, and the reduction of price during the peak deman periods for a product” (234). The survey found that retailers are important since they affect the upstream market, since they determin the choice of products, brands carried in the shops, sales strategies, pricing strategies and prmotional strategies.

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