Entrepreneurship I 3.01

1. Entrepreneurship I 3.01 Develop marketing strategies to guide marketing tactics

2. Marketing Mix • A combination of the four elements of marketing – product, price, place, promotion Price Place Product Promotion

3. 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

4. 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?

5. Marketing Mix: Place • 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.

6. 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

7. Marketing Mix: Promotion • 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

8. 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.

9. Marketing Mix: Price • 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.

10. 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

11. Marketing Mix: Price • Determine how to accept payment: • Cash, debit, credit, check, or combination

12. Goal: What is the marketer’s destination? • 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. *Think about a time when you were given a goal which was not specific enough. What happened?

13. Strategy: Which route will the marketer take to get their destination? • 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 *Identify another strategy that would increase the restaurants sales.

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

15. Tactics 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

16. Marketers plan thoroughly but stay flexible • 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

17. Deciding on Strategies and choosing the best option • 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.

18. Marketing Strategies May Change • 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

19. Does the same marketing strategy work in every situation? • 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.

20. Put It All Together • 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

21. Ind. 3.02 – Select a target market appropriate for venture/product to obtain the best return on marketing investment ENTREPRENEURSHIP I

22. How are marketers grouping you? • 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?

23. Market – those who have…. • An unfilled desire or need, and • Is financially able to pay, and • The willingness to buy (soon). “There’s no way this old mower is going to get through this! It’s time to buy a more powerful one!”

24. Target Market – those who…. • Are grouped within a market by what they have in common • Are the customers the business seeks to attract

25. Significance of target marketing • 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.

26. 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

27. 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

28. Why is the use of market segmentation increasing? • 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!

29. 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

30. Demographic Segmentation • 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.

31. Geographic 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.

32. Behavioral Segmentation • Dividing a market on the basis of consumers’ response to a product • Product Benefit • Occasion response • Loyalty

33. Psychographic Segmentation • The division of a market on the basis of consumers’ lifestyles and personalities • Motives • Attitudes • Opinions • Interests • Activities • Personalities • Lifestyle

34. 3.05 Employee Marketing-information to develop a marketing plan Conduct Market Analysis Conduct SWOT Analysis Conduct Competitive Analysis

35. 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.

36. Components of a Market Analysis Target Segment Description Target Segment’s Needs (Why do customers need the product/service?) Distribution channels (Where do customers need the product/service?) Buying Habits (What factors influence the target market to buy?) Communication channels (How will you communicate with the customers?)

37. 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.

38. 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.

39. CONDUCT SWOTAnalysis 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.

40. 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.

41. 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.

42. 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

43. 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

44. 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.

45. 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.

46. 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.)

47. Components of a Competitive Analysis Price Quality Customer Service Financial Stability Location

48. 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