Unit 5 Marketing for the Small Business

1. Unit 5Marketing for the Small Business Small Business Operations

2. What is Marketing? • Marketing is the creation and maintenance of satisfying exchange relationships. Marketing, 3e, page 9 • The marketing concept is using the needs and wants of customers as the primary focus of all business decisions – satisfying customers while making a profit. Marketing, 3e, page 19 Frameworks 5.1

3. The Marketing Mix • The elements of marketing, also known as the marketing mix or the 4 P’s, are: • Product • Price • Place/Distribution • Promotion Source: Marketing, 3e, pages 22-23 Frameworks 5.2

4. Product • The product is anything offered to the market by the business to satisfy customers needs, including services, ideas, events, and places. Source: Marketing, 3e, pages 23 Frameworks 5.2.2

5. Price • The price is the amount that customers pay for the product or service. Source: Marketing, 3e, pages 23 Frameworks 5.2.2

6. Calculate Product Price Fruit Smoothie 46 ounce bottle = $ 9.76 Sales tax (8%) = 9.76 x .08 = .78 Cost Plus Tax = $10.54 per bottle $10.54 divided by 46 ounces = .23 per ounce .23 x 4 ounces per cup = .92 per cup .10 cost for cup .02 cost for lid TOTAL COST = $ 1.04 per cup Markup 140% = $1.04 x markup (1.40) = $1.46 + $1.04 = $2.50 retail price

7. Place or Distribution • The place or distribution includes the locations and methods used to make the product available to customers. Source: Marketing, 3e, page 23 Frameworks 5.2.2

8. Promotion • Promotion includes the methods used and information communicated to encourage customers to purchase and to increase their satisfaction. Marketing, 3e, page 23 • Viral marketing is a promotional approach that encourages people to pass along a marketing message by word-of-mouth. The internet has allowed viral marketing to have an almost immediate impact. Marketing, 3e, page 599 Frameworks 5.2.2

9. The Product Mix • A product line is a group of similar products with slight variations in the product mix to satisfy different needs in the market. Marketing, 3e, page 287 • A product assortment is the complete set of all products a business offers to its customers. Marketing, 3e, page 287 Frameworks 5.2.3

10. Evaluate the Product Mix of the SBE • Is the product mix appropriate for the target market? • Should any products be deleted from the product mix? • Are there any products that should be added to the product mix? • Should additional services be added to make the purchase of products easier or more enjoyable? Example: What is the feasibility of a delivery service or an on-line component of the SBE? Frameworks 5.2.3

11. Competitive Strategies • Competition is the rivalry among businesses for consumers’ dollars. Business Principles and Management, 12e, page 65 • Price competition is the rivalry among businesses based on price and value. Marketing, 3e, page 196 • Non-price competition occurs when businesses compete on factors other than price. Marketing, 3e, page 196 • Atmospherics are the elements of the shopping environment that are appealing to customers, attract them to a store, and encourage them to buy.Marketing, 3e, page 384 • Visual Merchandising is the coordination of all the physical elements that are used to project the right brand image to customers. www.retailindustry.about.com Frameworks 5.3 & 5.4

12. The Role of Competition in Business • Competition forces businesses to offer reasonable prices. • Competition encourages businesses to improve existing products and add benefits and features to their product offerings. • Competition forces business to continuously search for new product ideas. • Competition offers consumers the benefit of a wide variety of products from which to choose. Source: Marketing, 3e, pages 197-198 Frameworks 5.3.2

13. The Importance of Atmospherics Frameworks 5.4.2

14. The Importance of Visual Merchandising Frameworks 5.4.2

15. Developing Relationships with Customers • Relationship marketing focuses on developing loyal customers who continue to purchase from the business for a long period of time. Marketing, 3e, page 27 • Build trust with the customer. • Communicate with customers to determine the best products and services to meet their needs. • Immediately solve problems encountered by the customer. Some Harley-Davidson customers are so loyal to the company that they have tattooed themselves with the company’s brand name. Frameworks 5.5.1

16. Personal Selling • Personal selling is direct, face-to-face contact, with potential customers to assess their needs and satisfy those needs. Marketing, 3e, page 477 • Greet the customer. • Determine needs – observe, question, listen. • Demonstrate/present the product. • Answer questions. • Suggestion selling. • Follow up. Source: Marketing, 3e, page 493 Frameworks 5.6.1

17. Personal Selling - continued • Suggestion selling is offering additional products and services after an initial sale in order to increase customer satisfaction.Marketing, 3e, page 497 • A customer who purchases notebook paper and a 3-ring binder might also need a pencil or an ink pen. • A customer who purchases a handbag might also enjoy having a matching wallet. Frameworks 5.6.1

18. Personal Selling - continued • Substitute selling involves suggesting items other than the original request when the original request is not available. • Never tell the customer that what they’ve requested is unavailable without offering a similar product as a substitute. • If the school based enterprise is out of frozen mocha mix, offer the customer a “refreshing and healthy” all fruit smoothie. Source: Marketing Essentials, 2009, pages321-323. Frameworks 5.6.1

19. End of Unit 5 • Visit the website www.HarrisonDECA.org and click the Quizlet.com icon and study the flashcards for this unit. • Or you may click the Quizlet link below.