Entrepreneurship I 3.01

Develop marketing strategies to guide marketing tactics

A combination of the four elements of marketing – product, price, place, promotion

Marketing Mix

Product

PricePlace

Promotion

Marketing Mix: Product Product: the goods, services, or ideas a

business will offer its customers. Marketers conduct research and use their

creativity to figure out what customers need and how they will meet those needs

Marketing Mix: Product Marketers ask themselves questions such as:

◦ Should we offer one product-or more than one?◦ Is the product a good, service, or idea?◦ Does the product have special features?◦ Does the product have multiple uses?◦ What resources are necessary to research and develop the

product?◦ What level of quality should be produced or provided?◦ Which brands should be used?◦ How should the product be packaged?◦ How might the product affect the firm’s image?◦ How might customers view this product in relation to others?◦ Should we offer a warranty, maintenance contract, or other

support services?

The place element can make or break the buying experience. Getting a product in the right place at the right time is all about creating convenience for the customer.

Marketing Mix: Place

Consider the following:◦ Which firms to buy the product from◦ When to buy the product◦ How much of the product to order◦ Where to make the product available◦ How to process customer orders◦ Which firms to involve in the process◦ How to answer customer questions◦ How to coordinate all of the steps involved

Marketing Mix: Place

Promotion refers to the various types of communication that marketers use to inform, persuade, or remind customers about their products.◦ Advertising◦ Personal selling◦ Publicity◦ Public relations◦ Sales promotion

Marketing Mix: Promotion

Consider the following:◦ Which messages to send◦ Which media to use◦ When they want messages delivered◦ How often they want messages

delivered◦ How to coordinate communication

efforts◦ How to evaluate results

The ultimate goal of promotion is to generate a positive response from customers.

Marketing Mix: Promotion

Price is the amount of money a firm asks in exchange for its products.

To be successful, a good balance between customer value and satisfaction, as well as company cost and profit must be found.

Marketing Mix: Price

Determine company pricing objectives:◦ Getting their product into more customers’ hands.◦ Helping customers view their firm as distinct from

competitors◦ Bringing in the amount of income they need or

want.◦ Raising the product’s value in the customer’s eyes◦ Matching the product’s value with what customers

expect to receive

Marketing Mix: Price

Determine how to accept payment:◦ Cash, debit, credit, check, or combination

Marketing Mix: Price

Goal: An objective you plan to fulfill Determine where your business/firm needs to

be by a particular date and set goals◦ Example: A family-style restaurant wants to increase

sales. They set goal to increase annual sales by 10% over last years sales. This goal is specific and can be evaluated for success/failure at end of year.

Goal: What is the marketer’s destination?

*Think about a time when you were given a goal which was not specific enough. What happened?

A strategy is a plan of action for achieving your goals and objectives.

Create the plan of action (route) believed to be most efficient.

Examples:◦ Strategy #1: Add a kids’ menu in order to

increase sales to young parents in the area◦ Strategy #2: Extend hours

Strategy: Which route will the marketer take to get their destination?

*Identify another strategy that would increase the restaurants sales.

Tactics are specific actions used to carry out strategies

Marketers carefully choose the short-term actions, or tactics, they use to carry out their strategy.

Tactics must line up with where they plan to go –their goal-and how they plan to get there

Marketers pay attention to every detail – their strategy

Tactics: What small steps are needed to make it happen?

Example: To introduce the new kids’ menu, the family style restaurant might decide to use the following tactics:

1. Introduce kid-tested meals◦ A)spaghetti & meatballs C) hot dog w/chips◦ B) macaroni & cheese D) hamburger

w/fries 2. Offer a free ice cream cone to each child Each of these actions leads the restaurant to

its desired destination

Tactics

No one knows for sure exactly how a plan will play out

Planning needs to be as complete as possible-but easily adaptable

Marketers plan for success and are ready to adjust at any given moment

Marketers plan thoroughly but stay flexible

A firm’s strategy is important because it shows how its goal will be reached◦ Its strategy may not be the only option◦ There can be more than one marketing strategy

To choose the best strategy for reaching their goal, marketers consider:◦ How the marketing concept applies to their situation◦ When they want to reach their goal◦ Which resources are on hand

After selecting, marketers set aside funds to make it happen.

Deciding on Strategies and choosing the best option

Business situations change, so marketers must look for obstacles they can turn into opportunities

Situations which might invite a change of plan include:◦ Hearing about a new product w/better features◦ Figuring out that the price is slightly high for customers◦ Seeing the firm’s ad in the back of the newspaper,

instead of the section in which it was expected◦ Learning of new government regulations that impact

the business◦ Watching the economy improve or worsen

Marketing Strategies May Change

Not in today’s world Each situation requires a customized

approach Marketers often adjust, or even combine,

their strategies to fit their purposes Marketers combine marketing elements

differently to product strategies appropriate for reaching assorted marketing goals

The marketing mix differs among companies – to meet their designated goals.

Does the same marketing strategy work in every situation?

Marketers must adapt their marketing mix to suit each unique set of circumstances (iPod playlist)

A change in one marketing element affects the others. ◦ If product features are improved, price goes up

Put It All Together

ENTREPRENEURSHIP I

Ind. 3.02 – Select a target market appropriate for venture/product to

obtain the best return on marketing investment

Business owners are excited about people’s similarities. Why?◦ Grouping is how marketers discover the best ways

to match products with their customers◦ It is how marketers figure out what it takes to

meet their customer’s needs.◦ How do you think marketers group YOU?

How are marketers grouping you?

Market – those who have….An unfilled desire or need, and

Is financially able to pay, and

The willingness to buy (soon).

“There’s no waythis old mower

is goingto get through

this! It’stime to buy a

morepowerful one!”

Target Market – those who…. Are grouped within a market by what they have in common

Are the customers the business seeks to attract

Every customer belongs to a number of markets.

Customers are targeted in the consumer market, and businesses are targeted in the industrial market.

The same customer or business can be included in more than one target market.

Markets usually change over time.

Significance of target marketing

Two styles of approaching target market activities – Mass Marketing Mass marketing is

designing products and directing marketing activities to appeal to the whole market

Advantages◦ Used to communicate a

broad message to as many customers as possible

◦ Producing one product is cost effective for businesses

Disadvantages ◦ The diversity of the

audience◦ Since customers are so

different, only a small percentage of the mass market is likely to purchase the product

Two styles of approaching target market activities – Market Segmentation Market

Segmentation is the division of a total market into smaller, more specific groups as a way to meet the customers needs

Advantages◦ More precise ◦ Allows for a finely

tuned product, appropriate price, and ease of distribution

Disadvantages◦ More complex, difficult

to produce products◦ More money needed

It’s more efficient in the long run. Increased competition Customers are more discerning than they

used to be.◦ Customers want to know how the good or service

will directly benefit them!

Why is the use of market segmentation increasing?

How do marketers divide their markets? They identify

customers’ similarities.

They group customers by what they have in common.

Common ways to group customers:◦ Demographic◦ Geographic◦ Psychographic◦ Behavioral

Dividing a market on the basis of its physical and social characteristics

Example characteristics:◦ Gender◦ Origin or heritage◦ Religion◦ Social or economic status

Education level, occupation, income, etc.◦ Life stage

Generation, marital status, family size, etc.

Demographic Segmentation

The division of the market on the basis of where customers are located◦ Type of climate◦ Continents◦ Nations◦ Regions◦ States◦ Zip codes◦ Neighborhoods◦ Etc.

Geographic Segmentation

Behavioral Segmentation Dividing a market

on the basis of consumers’ response to a product ◦Product Benefit◦Occasion response

◦Loyalty

Psychographic Segmentation The division of a

market on the basis of consumers’ lifestyles and personalities◦ Motives◦ Attitudes◦ Opinions◦ Interests◦ Activities◦ Personalities◦ Lifestyle

Conduct Market AnalysisConduct SWOT Analysis

Conduct Competitive Analysis

3.05 Employee Marketing-information to develop a marketing

plan

Market Analysis What Is It? An evaluation of the market for a

company's goods and services. For example, a company might be interested in the characteristics of consumers who are buying the firm's products, or a comparison of its products with those offered by competitors.

Why do we need It? Before you can describe your marketing and sales strategies, you need to figure out what market you serve and what need you fulfill.

Components of a Market Analysis

1. Target Segment Description2. Target Segment’s Needs (Why do customers

need the product/service?)3. Distribution channels (Where do customers

need the product/service?)4. Buying Habits (What factors influence the

target market to buy?)5. Communication channels (How will you

communicate with the customers?)

Advantages of Using a Spreadsheet for Market Analysis

Keep your market numbers organized. It helps you track the basic numbers of potential

customers by segment, with columns to estimate growth rates and the projected future numbers.

Steps for Conducting Marketing Analysis

1) What do you want to know? 2) Draft your questions and hypotheses for how

people will answer. 3) Find the right group of people for your market

research. 4) Determine the best method to ask your

questions. 5) Analyze your findings.

CONDUCT SWOT Analysis for use in the Marketing Planning Process

SWOT analysis is a strategic planning technique that analyzes a company’s internal STRENGTHS and WEAKNESSES, and studies OPPORTUNITIES and THREATS in the external sales environment.

Who to involve in a SWOT Analysis?◦ For those who want to improve the competitiveness of a

company, region or country.◦ People directly involved in various hierarchical levels of decision

making in an organization or business, or a wider sample of actors if the SWOT analysis concerns a whole region or nation. Representatives from a variety of stakeholders groups should be involved, as they would bring in the analysis their own particular perspectives. At least one expert in SWOT analysis should take part or moderate the process.

WHEN SHOULD A SWOT ANALYSIS BE CONDUCTED?

• SWOT analysis is done as part of the overall corporate planning process in which financial and operational goals are set for the upcoming year and strategies are created to accomplish these goals.

• When a company wants to get a picture of how the company should position itself against competitors.

• When seeking out new opportunities and forecasting longer term opportunities

• To help companies be better prepared for whatever it will encounter in the external environment.

BENEFITS OF A SWOT ANALYSIS• The main advantages of conducting a SWOT analysis:

Little or no cost Anyone who understands your business can perform a

SWOT analysis When you don't have much time to address a complex

situation

• Another advantage of a SWOT analysis is that it concentrates on the most important factors affecting your business. Using a SWOT, you can:

understand your business better address weaknesses deter threats capitalize on opportunities take advantage of your strengths develop business goals and strategies for achieving them.

FACTORS CONSIDERED IN A SWOT ANALYSIS

Internal Factors

• Changes in spending on other parts of the company’s marketing and promotional mix

• Changes in what is happening in different territories or markets

• Changes in sales management practices• Changes in number of salespeople supervised by

one person

External Factors

• Intensity of competition• Total market potential• Concentration of potential high-volume buyers• Geographic distribution of customers

PROCEDURES FOR CONDUCTING A SWOT ANALYSIS

• Step 1 – Information collection – In the here and now… List all strengths that exist now. Then in

turn, list all weaknesses that exist now. Be realistic but avoid modesty!

You can conduct one-on-one interviews. Or get a group together to brainstorm. A bit of both is frequently best.

You’ll first want to prepare questions that relate to the specific company or product that you are analyzing. You’ll find some questions and issues below to get you going.

When facilitating a SWOT – search for insight through intelligent questioning and probing

PROCEDURES FOR CONDUCTING A SWOT ANALYSIS (cont’d)

• Step 2 – What might be… List all opportunities that exist in the

future. Opportunities are potential future strengths. Then in turn, list all threats that exist in the future. Threats are potential future weaknesses.

• Step 3 – Plan of action… Review your SWOT matrix with a view to

creating an action plan to address each of the four areas.

Benefits of Competitive Analysis Identify Your Own Competitive Strengths - You'll

discover your company's competitive advantage -- the reason customers do business with you instead of your competition. Determine Areas of Weakness and Stimulate Innovation - Analyzing competitors' offerings may spur ideas for innovative improvements to your product offerings.

Understand Pricing Better - Are you charging 50% below market for your products and services? Are you charging double what the competition is charging? The only way to find out is determine what competitors are charging. With competitor pricing in hand, you can make smarter decisions with respect to your own pricing.

Benefits of Competitive Analysis (cont’d) Find Untapped Opportunities - You might find that there

are some categories of customers whose needs are not being met. For example, if you plan to prepare and deliver gourmet meals, you may discover that a particular part of town is not currently being served. If you can satisfy unmet needs, you'll develop a market "niche."

Learn Industry Best Practices - By observing the actions of your competitors, you might learn more about your market. For example, does a successful competitor offer reduced prices during a particular season? If so, what might that tell you about your market's spending habits?

Steer Clear of Overly Competitive Markets - If you find that your market is saturated with capable competitors, you can avoid the costly mistake of starting a business without adequate demand. You can then redirect your efforts toward something that will pay off instead. (For example, your research may tell you that there's an ample number of thriving gourmet meal services in your targeted market area already.)

Components of a Competitive Analysis

Price Quality Customer Service Financial Stability Location

Procedures for Conducting a Competitive Analysis

Defining the problem Analysis of the situation Obtaining data that is specific to the

problem Analysis and interpreting the data Fostering ideas and problem solving Designing a plan