Small businesses thinking big

The latest Marketing Trends Survey shows that smaller businesses are more positive about using marketing than larger companies, which seem to believe they can rely on their size the bring success

The Chartered Institute of Marketing’s latest Marketing Trends Survey, conducted by MORI (MW October 13), reveals intriguing differences between the attitudes of large and small businesses.

The UK’s smallest companies are the most likely to consider marketing essential to success, the most inclined to invest in marketing, and the quickest to recognise the importance of having a marketer in the boardroom. While 49 per cent of businesses with a turnover of more than &£100m say that marketing is regarded as a high priority, this figure rises to a substantial 88 per cent in organisations turning over less than &£1m.

Smaller companies are also the most likely to support marketing with hard cash. Companies with a turnover of less than £1m spend just over ten per cent of turnover on marketing, significantly more than the national average of 7.2 per cent. A third of marketers in small companies claim it is difficult to secure funding for marketing, but, by contrast, two-thirds of those in the largest organisations find obtaining a marketing budget problematic.

And it is in small organisations where marketers are most likely to be represented at board level. More than three-quarters of the smallest companies have a marketer on the board, but this figure falls to 37 per cent in companies with a turnover of between &£51m and &£100m, and just over half (51 per cent) in companies turning over more than &£100m.
On average, UK businesses are expecting sales growth of about 6.5 per cent. The financial services sector is the most upbeat, expecting sales growth of 8.5 per cent, while the public and charity sectors are expecting sales to grow by less than seven per cent. More than one-third of respondents say their sales plans are challenging or unrealistic, but 13 per cent expect to over-achieve their targets.

More than half of the respondents say the economic climate will improve or remain unchanged over the next 12 months. Forty per cent say they believe we are facing a downturn, 45 per cent say that little will change, and 13 per cent say they expect improvement. Again, the financial services sector is the most confident – 58 per cent expect an improvement.

But when it comes to predicting the future about their own organisation, marketers believe that they will fare better: 53 per cent say that business will improve. It would appear that while this survey is less bullish than past studies, marketers remain confident about their own ability to succeed. Marketers also believe that the London Olympics will boost the UK economy: 78 per cent say that the event will have a positive impact.

Advertising accounts for the lion’s share of marketing spend, with just under 15 per cent of marketing budgets earmarked for advertising activities. This is closely followed by direct mail (12.8 per cent), while sponsorship and internal marketing rank bottom, accounting for only 8.9 per cent and 7.8 per cent respectively. Sponsorship is also the area where the biggest cuts are planned; spending on sponsorship looks set to be cut by one per cent. Online marketing will see the biggest increase (2.6 per cent).

On the issue of staffing levels, only 11 per cent of those questioned say their company plans staff cuts, while 25 per cent will be employing more people over the next 12 months. Meanwhile, when it comes to their careers, three-quarters of marketers say formal training has helped them to significantly deepen their understanding of their profession.

Less than half (42 per cent) believe women still find it hard to achieve senior positions in marketing, but, interestingly, 62 per cent of women say the odds are stacked against them. Younger people are more likely to believe that women still struggle to achieve their full potential, and while half of under-35s say that a glass ceiling exists for women, less than a third (30 per cent) of the over-55s agreed.

Most marketers do not believe that youth is more valuable than experience – while 17 per cent said that they believe marketing to be a young person’s profession, more than two-thirds disagreed.

The main findings of this survey point to a need for larger organisations to reassess where marketing stands in their priorities – they cannot rely on their size for success, brand building is essential. It is also interesting to note that, while marketers are expressing caution over the state of the economy, the outlook is far from bleak as the Olympics is expected to be a fillip.

Trends is edited by Nathalie Kilby. Christine Cryne, chief executive at the Chartered Institute of Marketing contributed to this week’s Trends Insight

Paul Gostick, International Chairman Chartered Institute of Marketing

Marketing is vital to business success in all economic climates and it is important to maintain investment through all stages of the economic cycle.

The 2012 Olympics will provide a new focus and a raft of opportunities. Over a third of companies say they will be undertaking some marketing activity around the games. As might be expected, in the South, where the games are being held, nearly half of all companies are planning an Olympic campaign, but companies in the North are also making preparations to cash in on the Games being held in England.

Demand for well-trained marketers will hot up as 2012 draws closer and the survey reveals that formal marketing training makes a difference. One might argue that those whose CVs include sound marketing qualifications to support their practical experience will be well placed to make the most of this opportunity for business success and career progress.

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