Copyright © 2011 Pearson Education CHAPTER 8. Marketing ◦ The process of creating and delivering...

Copyright © 2011 Pearson Education

CHAPTER CHAPTER 88

Marketing◦ The process of creating and delivering desired

goods and services to customers.◦ Involves all of the activities associated with winning

and retaining loyal customers.

National Federation of Independent Business Study◦ 55% of small business owners say they do not need

marketing because their products and services “sell themselves.”

Ch. 8: Building a Powerful Marketing Plan 8 - 2

Guerrilla marketing strategies:

◦Are unconventional, low-cost, and creative marketing techniques that allow a small company to realize a greater return from its marketing investment than do larger rivals.

◦Do not require large amounts of money to be effective – just creativity.


1. Pinpoints the specific target markets the company will serve.

2. Determines customer needs and wants through market research.

3. Analyzes a firm’s competitive advantages and creates a marketing strategy to build a competitive edge.

4. Helps to create a marketing mix that meets customer needs and wants.


One objective of market research: Pinpoint the company's target market, the specific group of customers at whom the company aims its products or services.

Marketing strategy must be built on clear definition of a company’s target customers.

Examples: Great Call and Lexus of Palm Beach

Target customer must permeate the entire business – merchandise sold, background music, layout, décor, and other features.

Without a clear image of its target market, a small company tries to reach almost everyone and ends up appealing to few.


Market research is the vehicle for gathering the information that serves as the foundation for the marketing plan.

How to Conduct Market Research:1.Define the problem.2.Collect the data.

Individualized (one-to-one) marketing

Data mining3.Analyze and interpret the data.4.Draw conclusions and act


Ch. 8: Building a Powerful Marketing Plan

8 - 7

Identify your best customers, never passing up the

opportunity to get their names.

Collect information on thesecustomers, linking their

identities to their transactions.

Calculate the long-term valueof customers so you know

which ones are most desirable(and most profitable).

SuccessfulOne-to-OneMarketing

Know what your customers’buying cycle is and time yourmarketing efforts to coincide

with it - “just-in-time marketing.”

Make sure your company’sproduct and service quality

will astonish your customers.

See customer complaints for what they are - a chance to improve your service and

quality. Encourage complaints and then

fix them!

Enhance your products andservices by giving customers

information about them and howto use them.

Source: Adapted from Susan Greco, “The Road to One-to-One Marketing,” Inc., October 1995, pp. 56-66.

Find a niche and fill it. Use the power of publicity Don’t just sell; entertain!

◦“Entertailing” Strive to be unique. Connect with customers on an emotional

level. ◦Build trust◦Define a unique selling proposition

(USP) Ch. 8: Building a Powerful

Marketing Plan 8 - 8

A key customer benefit of a product or service that sets it apart from its competition.

Answers key customer question: “What’s in it for me?”

Consider intangible or psychological benefits as well as tangible ones.

Communicate your USP to your customers often.



FIGURE 8.1 The Connection between Branding and a USP Source: Based on Brandsavvy, Highlands Ranch, Colorado

Social networks sites, such as Facebook and MySpace, allow entrepreneurs to connect with potential and existing customers at little or no cost.

More than half of Facebook users are over the age of 25.

These sites now offer business survey tools and advertising functions for promotional purposes.


An estimated 113 million blogs exist with 5,000 of them from businesses.

Economical and effective online communication.

Blog Guidelines: ◦ Be honest, balanced, and interesting.◦ Post blog entries consistently so that readers

have a reason to return.◦ Ask customers for feedback.


Study: 19% of Internet users watch online videos every day.

Online video guidelines: ◦ Think “edutainment.”◦ Be funny.◦ Connect with current events.◦ Involve customers. ◦ Keep it short.


Only 6% of customers who experience a problem contact the company to complain. 31% tell family members, friends, and colleagues about their negative experience.6% of those people tell their “horror stories” to six or more people.For every 100% of customers who have negative experiences with a business,the company stands to lose 32 to 36 current customers or potential customers.


Because 20% of a typical company’s customers account for about 80% of its sales, no business can afford to alienate its best and most profitable customers and survive!

Research shows that repeat customers spend 67% more than new customers.

Attracting new customers costs the typical business seven to nine times as much as keeping existing customers.


(continued)

Study: 60% of customers who change suppliers do so because of problems with a company’s products or services.

World-class companies treat quality as a strategic objective, an integral part of company culture.

The philosophy of Total Quality Management (TQM):◦Quality in the product or service itself. ◦Quality in every aspect of the business and

its relationship with the customer.◦Continuous improvement in quality.


Reliability (average time between breakdowns)

Durability (how long an item lasts) Ease of use Known or trusted brand name Low price Tangibles - equipment, facilities, people Reliability - doing what you say you will do Responsiveness - promptness

in helping customers Assurance and empathy -

conveying a caring attitudeCh. 8: Building a Powerful Marketing

Plan 8 - 17

The average U.S. work week is 42.5 hours, an increase from 37.5 hours in 2003.Is your business conveniently located near customers?Are your business hours suitable to your customers?Would customers appreciate pickup and delivery services?Do you make it easy for customers to buy on credit or with credit cards?


Are your employees trained to handle business transactions quickly, efficiently, and politely?

Does your company offer “extras” that would make customers’ easier?

Can you bundle existing products to make it easier for customers to use them?

Can you adapt existing products to make them more convenient for customers?

Does your company handle telephone calls quickly and efficiently?


(continued)

Innovation ◦ The key to future success.◦ One of the greatest strengths of

entrepreneurs. It shows up in the new products, techniques, and unusual approaches they introduce.

Entrepreneurs often create new products and services by focusing their efforts on one area and by using their size and flexibility to their advantage.


Listen to customers. Define “superior service.” Set standards and measure performance. Examine your company’s service cycle. Hire the right employees. Train employees to deliver superior service. Empower employees to offer superior service. Treat employees with respect and show them how valuable they

are. Use technology to provide improved service. Use mystery shoppers to measure customer service Reward superior service. Get top managers’ support. View customer service as an investment, not an expense.


Goal: To achieve customer Goal: To achieve customer astonishment!astonishment!

Use principles of time compression management (TCM):◦ Speed new products to market◦ Shorten customer response time in manufacturing and

delivery◦ Reduce the administrative time required to fill an order.

Re-engineer the process rather than try to do the same thing - only faster.

Create cross-functional teams of workers and empower them to attack and solve problems.

Set aggressive goals for production and stick to the schedule.

Rethink the supply chain. Instill speed in the company culture. Use technology to find shortcuts wherever possible. Put the Internet to work for you.


Product

Place

Price

Promotion


Introductory stage Growth and acceptance stage Maturity and competition stage Market saturation stage Product decline stage


HighCosts

HighCosts

ProfitsPeak

ProfitsPeak

Sales

Peak

Sales

Peak

Sales &Profits

Fall

Sales &Profits

Fall

HighCosts

SalesClimb

ProfitsPeak

SalesPeak

HighCosts

SalesClimb

ProfitsPeak

SalesPeak

((continuedcontinued))

FIGURE 8.4 Time between Introduction of Products

Ch. 8: Building a Powerful Marketing Plan

8 - 25


Manufacturer

Manufacturer

Consumer

Retailer Consumer

Manufacturer

Retailer Consumer

Wholesaler

Wholesaler

Manufacturer

Retailer Consumer

Wholesaler


A key factor in the decision to buy Focus attention on non-price

competition

◦Free trial offers

◦Free delivery

◦Lengthy warranties

◦Money back guarantees


Goal: To inform and persuade.

Through advertising and other communication techniques.

Create an image.

“Marketing is not a battle of products; it is a battle of perceptions.”


A guerrilla marketing plan offers the entrepreneur significant benefits.

Target marketing is key.

Create a competitive and edge through customer focus, quality, convenience, innovation, service and speed.

Copyright © 2011 Pearson Education CHAPTER 8. Marketing ◦ The process of creating and delivering...

Documents

Transcript of Copyright © 2011 Pearson Education CHAPTER 8. Marketing ◦ The process of creating and delivering...