Post on 25-Feb-2016
description
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