The University of Wyoming is an equal opportunity/affirmative action institution.

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MARKETING

Bill TaylorNortheast Area

Community Development Educator

University of Wyoming

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What is marketing?

Marketing is everything you do to promote your business, from the moment you conceive of it to the point at which customers buy your product/service and begin to patronize your business on a regular basis.

Jay Conrad Levinson – Guerrilla Marketing

HANDOUT: Slides

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The Marketing Process

• Research– Gather information about industry,

customers, competitors, and market potential.

• Market Analysis– Helps you decide on strategies

• Market Plan– Implementation of the strategies

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Analyzing the Customer

• Determining your customer “profile”– Demographics – physical characteristics

which segment people• Age groups, income levels, number of

homeowners, shift workers vs. salaried professionals, ethnic and racial groups

– Psychographics – mental characteristics which motivate people to buy

• Vegetarians, interested in the arts, outdoors oriented, confident, fearful

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Analyzing the Customer (cont.)

• Who is your customer?– Is the type of customer your business

generally attracts the customer you want to attract?

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Researching Your Customer

• Primary– Phone surveys– Personal interviews– Intercept (randomly

selected people)– Written surveys– Focus groups– Publication inserts

• Secondary– Library references– Trade associations– US Census & other

governmental data– Computerized

databases

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Determining Your Market Area

• Geographical boundaries and size– Geographical scope– Assumptions can make or break your market– What about shipping and advertising?– Target customers are different from

Newcastle to Gillette to Rapid City

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Determining Your Market Area (cont.)

• You want to start a business that offers linked computer services specifically for doctors and hospitals.

Town A – 5000

•One small hospital facility for emergency treatment only

•Five local physicians

Town B – 50,000

•25 miles away from town A

•Two major hospitals

•20 local physicians

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Competitive Advantage

• Price• Quality• Expertise• Customer service• Store layout• Store appearance• Selection• Advertising• Reliability

• Products/Services offered

• Image/Reputation• Location• Sales method• Management• Credit policy• Stability

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Think outside the obvious…

• The obvious customer isn’t the only customer.

• The obvious competitor isn’t the only competitor.

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Determining Trade Area and Target Market

• Determining the number of people in your trade area who “fit” your customer profile.– Target market – a sub-segment of the overall

trade area• Have specific characteristics

– What percentage of this “target market” will actually respond with a purchase?

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• Seeking out and capitalizing on pockets of opportunity.– Usually small, specific customer base that has not

been reached – they have a need you can fill.

– A marketer can become a big fish in a small pond…• Competition is less intense.• Lower costs of reaching the market.• Greater potential to achieve dominance.

– Niche markets may be less stable or long-lived– May be too small to provide sufficient gross sales

Niche Marketing

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Determining Market Potential

• Who will buy & how much will they spend?– Accuracy of your market research is important.

• Customer profile• Competition identified• Size of trade area

– The amount of your resources available for development and marketing will have a strong effect on which customers you target, who you take on as competition and what size of trade area you intend to market to.

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Projecting Sales Volume1. Total number of people (or businesses) in

your trade territory.2. Total number in trade territory who fit

customer profile.3. Estimated $ amount spent by customers on

products.4. Equals total annual market potential.5. Your estimated % share of this market.6. Equals your projected annual market

potential.

HANDOUTS: Mkt Analysis Wksht & Resources

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The Five “P”s of a Market Plan

• P #1 – Products or Services– What do they (your products) or you (your

services) do?– What makes yours’ unique or special?– Who will buy them?– When will they buy them?– How much will you charge?

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The Five “P”s of a Market Plan (cont.)

• P #2 – Packaging– The way your business is presented to the

marketplace.• Image of business• Consistency of presentation in all

communications• If you see golden arches you always know what

to expect.

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The Five “P”s of a Market Plan (cont.)

• P #3 – Place– Where do you do business?– Location can impact customer availability

and customer service– Location needs to “fit” the customer

expectation– Your position in the distribution chain affects

your decision about location– A gift store in the industrial section probably

won’t have much of a draw

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The Five “P”s of a Market Plan (cont.)

• P #4 – Pricing– What influences price?

• Cost – pricing from “bottom up”– Raw materials, labor, overhead, taxes, profit– Comparison to competition, market position

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The Five “P”s of a Market Plan (cont.)

• P #4 – Pricing (cont.)– What influences price? (cont.)

• What is the market willing to pay?– Seasonality– Convenience– Elasticity of consumer

» Milk (grocery store – convenience store)» Computer programmer ($15/hr - $100/hr)

• Demand – “top down” pricing– Analyze the range of acceptable prices

» Set price» Analyze costs» Is there adequate profit?

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The Five “P”s of a Market Plan (cont.)

• P #4 – Pricing (cont.)– What influences price? (cont.)

• Perceived value– What does your psychographic profile tell?

» “Worth” of $50 pair of name brand jeans to a rancher?

» Image pricing positions your product/service based on perceived value – BMW vs. Chevy

» Price/quality relationship

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The Five “P”s of a Market Plan (cont.)

• P #4 – Pricing (cont.)– Common pricing mistakes

• Failure to allow for waste, inventory shrinkage, damaged goods

• Not adjusting prices yearly• Ignoring cost of replacing equipment (depreciation cost)• Understanding cost of getting and keeping customers• Underpricing special services – e.g. product variation, extra

services• Not including an owner/manager salary

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The Five “P”s of a Market Plan (cont.)

• P #5 – Promotion – No matter how much time and effort is put

into the product, pricing, and placement, the whole process is likely to fail without good promotion.

– “Top of Mind Awareness”• Communicates a message• Builds an image• Creates awareness

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The Five “P”s of a Market Plan (cont.)

• P #5 – Promotion (cont.)

Don’t tell me about your grass seed, tell me about my lawn!

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Promotion

• Promotional Mix– The combination of tools used to promote

products or services• Personal selling• Word of mouth• Public relations• Sales promotion• Advertising

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Promotion (cont.)

• Personal Selling– Face-to-face presentation & promotion of

products/services– Searching out prospects– Providing follow-up

• Word-of-mouth– Consumers talking about products/services they

have liked or disliked– One of most effective promotional tools– Targeted to satisfied customers

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Promotion (cont.)

• Public Relations (PR)– Listen to the public– Develop policies & procedures that are in the

public interest– Inform people that you are being responsive

to their needs• E.g. health concerns, environmental concerns,

concern for children, etc.

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Promotion (cont.)

• Public Relations (PR) (cont.)– Publicity – a function of PR

• …any newsworthy or interesting information about an individual, product, or organization.

• …that the media distributes to the public.• …that is not paid for, or controlled by, the

sponsor.

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Promotion (cont.)

• Public Relations (PR) (cont.)– Publicity (cont.)

Advantages

•Free

•Hard-to-reach audiences

•Various media coverage

•Believability

Disadvantages

•No control

How, when, where, how many times, if

•Info may be altered

•Good vs bad

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Promotion (cont.)

• Sales– Short-term activities that stimulate consumer

purchasing and supplement other promotional activities.

Displays Bonuses Premiums

Gifts Trade showsDemonstrations

Contests Incentives Exhibits

Samples Rebates

Coupons Catalogs

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Promotion (cont.)

• Advertising– Paid, nonpersonal communication through various

media, by organizations or individuals, who are in some way identified in the advertising message.

– Expenditures in order• Newspaper – 25%• Television – 22%• Direct mail• Yellow pages• Radio• Magazines• Outdoor

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Promotion (cont.)

• Elements of Effective Promotion– Who? The right audience

• Your targeted market segment

– What? The right message• The tone that best suits the image & product• The information your target market segments

want to hear– Benefits of your product/service– Your competitive advantage

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Promotion (cont.)

• Elements of Effective Promotion (cont.)– Where? The right place

• Where your targeted market segments look for information

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Promotion (cont.)

• Marketing misconceptions– Companies control the market

• …“If we build it, they will come.”

– Once you have developed a market approach that works, you have mastered marketing.

• …remember when IBM was synonymous with computers?

– There is a magical market bullet that works for everyone.

• …there is no “one right way” to market any product or service.

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Promotion (cont.)

• Marketing misconceptions (cont.)– Marketing and selling are the same thing

• …selling is only one aspect of the marketing process.

• …businesses that focus their efforts solely on creating sales run the risk of disaster.

– Marketing is the same as advertising• …advertising is just one part of the marketing

process.

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Time – A Key(Judith A. Barry, Cornell University)

Are you getting the most out of your marketing strategy?

• Time costs money– Value of time used is often underestimated

• Is return to time adequate to pay for the time invested? If not, why are you doing it?

– Analyze skills• Introverts get worn out being with people all day –

Is the right person doing the marketing?

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Time – A Key (cont.)

• Think of using a middleman– Using the skills and experience of external people

may save money and time– Again, assess your skills – is your time better spent

in development and production?• “Time costs money, but my time is free.”

– Wrong! All time costs money. You could always be doing something else.

– If you get sick someone will have to be paid to do the same job.

– Even if lifestyle is an important ingredient, remember: the bills must be paid.

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Time – A Key (cont.)

• Where to get more time?– As development, quality control, and production

takes more time how can additional time be given to the important task of marketing?

• Strategic planning is necessary– Looking at the big picture

– Setting important goals and operations first

– Assigning the best sets of skills to the most appropriate tasks

– Reducing, cutting back, changing, expanding with long-term goals in mind

The University of Wyoming is an equal opportunity/affirmative action institution.

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QUESTIONS?