NCV 2 Entrepreneurship Hands-On Support Slide Show - Module 2

Entrepreneurship

Entrepreneurship - Level 2 1Future Managers

Module 2: Marketing and customer relations


Module 2: Marketing and customer relations

• Identify potential customers for a new venture

• Survey opinions for products of the new venture

• Promote product/service of new venture• Discuss customer relations


1. Identify customers for a new venture

• At the end of this outcome, you should be able to:– Identify basic needs common to all people and rank them in

order of importance– Compare the basic needs of people for different socio-

economic groups– Discuss the possibilities of introducing a new product/service

to an existing market– Explain, using examples, the concept of benefits of

product/service– Identify factors that may motivate people to buy the

product/service of a new venture– Identify attitudes, values and other factors that could

prevent people from buying a product/service of a new venture


Marketing• What is marketing?• Main components of marketing include:

– Identify the target market– Determine the needs and wants of this market– Develop a suitable product range– Promote this product– Sell the product/service– Distribute the product– Provide after-sales service

Entrepreneurship - Level 2 Future Managers 5

1.1 Identify the needs and wants of your potential customers

• Brainstorm all the potential needs of your customers– Need for food– Need for clothing– Need for security– Need for social contact

• How would these needs be satisfied?


Activity 1


1. Draw up your own list of products/services (at least 5 examples)

2. Write this list on a worksheet that you have divided into two columns. In the left-hand column, write the name of the product or service. In the right-hand column, write down one or two reasons why you think it is a product or a service

3. Try to find advertisements for at least three of the products and bring these advertisements to class

4. In class, discuss your list (5 items) and your list of advertisements with your classmates.

1.1 Identify the needs and wants of your customers

• How do needs influence buying behaviour?– Businesses can’t influence needs– However, businesses can influence want for a

product• Branding• A brand is not the product, symbol, company or logo

itself; it is what the customer decides he/she wants it to be – a person’s gut feeling (emotion) about the product, service or company. in their minds that will satisfy that need.



1. A logo helps you to build an image and a brand of your business that is bigger than yourself

2. It makes you memorable. 40% of people remember what they see better than what they hear or read. An attractive logo will help to keep your business in customers’ minds

3. A logo helps to explain your company’s name4. A well-designed logo on company stationery

makes your business a serious business in customers’ minds


Activity 2


• Following are two diagrams. The first is the top ten coolest brands in South Africa and the second is the top ten coolest Hi-tech gadgets in South Africa

• In your group, identify any two brands from each category

1. Make a list of the needs you think these brands address2. What “emotion” does that particular product create

within you? Give only one word. If your group consists of 5 members, you will have 5 words to describe the emotion

3. Explain how the marketer of each of these products is trying to turn a need into a want for his/her specific product

Activity 2



• How do the needs of various socio-economic groups differ?

– Poor people may want something but not be able to afford it

– Rich people may be able to afford something, but may not be willing to pay for it

– Demand is therefore, what people are willing and able to pay for the product


Business plan activity


• Write the various features and potential benefits of your own product in your business plan workbook. Take care when you determine the benefits of your products. You will need these benefits when designing an advertisement for your business.

1.2 Potential customers• What is the target market?

– The people who are most likely to buy your product

– It helps you to:• decide how and where to advertise• determine the right of your product• select the different types of products you want to sell


1.2 Potential customers• What criteria would you use to determine

your target market and why?– Age– Income– Gender– Education– Location


Activity 3


• Describe the target market at which the following products are aimed by using one or more of the “ways” of describing a target market– Pay-as-you-go cellphone package– The Sowetan – BMW Z4– Nando’s– Diesel



• Complete the worksheet that deals with your target market in our business plan workbook. You may not be able to complete all the different criteria of defining a target market. If you cannot, give a reason why it is not possible.

1.3 Factors influencing buying patterns of new customers

• What are the four Ps of marketing?– Product

• Features versus benefits– Price– Promotion– Place


Activity 4


• Within your group, review the list of 5 products each member had to collect (needs and wants). Pick one member’s list which the group feels is the “best” or “most exciting”. Make a list of all the features of the products. Then make a list of all the potential benefits.



• Make a list of all the features and benefits of your own product or service. Discuss your list with other members in your group and listen very carefully to their comments.

1.3 Factors influencing buying patterns of new customers

Marketing Checklist1. Does it focus on the benefit you provide?2. Does it have a clear message?3. Is it focused on a specific group?4. Does it feature your Unique Selling

Proposition (USP) – the one thing that sets your product apart from other products?

5. Does it have one strong message?6. Does it offer methods to respond?7. Do you have a specific objective that you can

measure?Entrepreneurship - Level 2 Future Managers 22

1.4 Attitudes, values and other factors that will prevent people from buying

• How might the following attitudes affect a new business venture?– Competition– Nature of your products– Environmental– Political– Create employment



• General values– Different cultures have different attitudes– Businesses should be sensitive to differing

values– Some offensive products might be:

• Selling of alcohol• Selling of pornography and related products• Opening a night club • Certain types of food • Products that encourage violence (toy guns)



• Ubuntu values– Speak and act truthfully– Treat others as you would want them to treat

you– Recognise and respect diverse religious and

spiritual cultures– Act comprehensively to ensure fair

compensation and humane working conditions– Ensure that economic activities support and

promote human development.


2. Survey opinions for products of the new venture

• At the end of this outcome, you should be able to:– define a questionnaire– explain the different components of a questionnaire– compile a questionnaire– identify at least 3 people to be surveyed for

marketing information– interview the people in the sample using the

prepared questionnaire– estimate the likelihood of success– present the information


2.1 Reasons for doing research

• Why do entrepreneurs need to do research?– to understand the various business

environments– anticipate any changes within the environments– forecast the impact and direction that any

change might have– make changes to their business plans as a result

of these changes in the business environment.



• Marketing research can be used to:– Investigate whether customers will buy a new

product– Investigate why existing products are not selling– Investigate better methods of marketing

existing products– Investigate the changes in customer needs– Minimise the risks of a new competitor


Activity 5


• What kind of information do you think would be valuable for the success of your college/business? Ask the following questions in the group: 1. What made each one of you decide to study at

this college?2. How did you find out about the college?


• How would you define marketing research?• Marketing research is the identification,

collection and analysing of information to help a business with decision-making. It helps identify opportunities and identify marketing-related problems



• Marketing research involves the following:– Identify the marketing problem/opportunity - what

you would like to find out?– Identify where you will find the information and

how to get the information– Collect the information and see what it tells you– Make a decision, what will you do with this

information?– Do you need to introduce new products, open your

business in a different place or find a new business idea?


2.2 Element of the research process

• The research process helps entrepreneurs to:– Specify the information needed– Design methods for obtaining the information– Identify the type of research to be done– Determine the time span for finishing the research

process– Collect and process the information– Analyse the results– Make a decision


2.3 Planning a research project• Identify the question or problem you want to

investigate• Formulate an opinion, assumption or “hypothesis”• Decide on the kind of information you will need in

order to investigate the issue properly• Identify and choose your sources of information• Collect your data and information from these

sources• Analyse, interpret and evaluate your information –

does the information support or disprove your hypothesis?

• Report your findingsEntrepreneurship - Level 2 Future Managers 33

Activity 6


• Using the steps to planning a research project, identify what type of food students would prefer in a cafeteria.

• What advice would you give a cafeteria owner?

2.4 Collect and analyse data• There are two main ways of collecting data:

– Primary data– Secondary data


2.4 Collect and analyse data• What are the main sources of primary data?

– Survey– Observation– Experimentation

• Researchers cannot interview everyone, so they will take a sample. What is a sample?– A representative number of people from the total

population involved in the research


2.4 Collect and analyse data?• Where can one find secondary data?

– Government publications and statistics– Libraries and resource centres– Technikon and university research papers and

various theses– Media statistics e.g. AMPS (All Media and

Products Survey)– Professional and business associations such as the

Chamber of Commerce– The Internet


Activity 7


• What kind of data (primary or secondary) and what type of research technique would you use for the cafeteria research project?

Activity 8


Read the following extractResearch can be as simple as googling an idea - using

www.google.co.za to see if anyone has yet done exactly what we’re dreaming of - or to identify similar concepts and how they’ve turned out. At last count there were approximately 19,435,671 search engines to choose from - with another 43 million under development by people who feel that the current search engines have not quite got it right!

A Google search takes approximately 1 second, and costs nothing - yet will give you more knowledge and background than you could have bought in 12 months for R1million a decade ago. About anything at all!

Even if the idea has been developed - you can see how it’s being marketed by looking at all the players in that arena, and what they’re doing to try and attract customers. Why re-invent wheels that are frantically spinning elsewhere?

Activity 9


• Visit www.google.co.za and find out how many documents exist covering the following topics:– Democracy– Branding– Entrepreneur– Ubuntu

2.5 Research techniques2.5.1 Format of the questionnaire• Section A covers personal information. You need

this information to determine your target market• Section B deals with the questions related to the

product– Determine the type of information needed– Determine the method of obtaining the information– Determine the content and phrasing of the questions– Decide on the types of questions to use– Decide on the sequence of the questions– Decide on the outlay and reproduction of the

questionnaire– Pre-test the questionnaire


2.5 Research techniques2.5.6 Types of questions to ask• Opening question • Closed questions • Open-ended questions


Activity 10


Study the MTN questionnaire on page 73 of your text book, then answer the following questions:

• What is the purpose of this survey (questionnaire)?• Identify the Section A questions• Why do they ask for your cellphone number?• Which questions are

– opening questions– open-ended questions– closed questions?

• Why do they offer 12 cellphones as prizes.• Identify any other questions you think MTN should have

asked in this questionnaire. Explain why you think each of your questions is important.

Activity 11


• Design a short questionnaire for the cafeteria research project– Check if your questionnaire will help you get all

the information you need– Do you have a Section A and a Section B?– Have you included closed and open-ended

questions?– Now go and interview a representative group

(sample) of students/employees.

2.6 Evaluate and analyse the data

• What is the purpose of evaluating and analysing the data?

• Data is analysed through the following processes: editing, coding and tabulation.



• Editing of data– Have all the questions been answered?– Can you read the answers?– Accuracy - did you write down what you

heard?– Do the answers make sense?– Are the answers consistent?



• Tabulation of data– After the raw data has been analysed, it is

ready for tabulation– Tabulation is counting the number of answers

in each category– This can be done by means of a computer or

manually, depending on the volume of data.


Activity 12


• You need to edit and tabulate the data you collected by means of your questionnaire.

2.7 Interpret and discuss the data

• Once you have analysed the data, you need to interpret the results

• Closed questions are easier to interpret than open ended questions

• When interpreting open ended questions, group all the answers which are similar together

• Write down your findings in a research report


Activity 12


• Interpret the data from your cafeteria project and write down your findings

2.8 Prepare a brief report on the findings

• What are the reasons for preparing a report?– It organises data and serves as a record of the

research– The same research findings can, in future, still

have an influence on your business decisions– The quality of the report impacts on the quality

of the research


2.8 Prepare a brief report on the findings

• Report format– Title page – Table of contents– A list of tables and figures– Proposal – Introduction – Method followed – Interpretation and findings – Conclusion– Recommendations


2.9 Presentation of information • Bar Graphs


2.9 Presentation of information • Pie charts




• For your own business plan identify a specific part that you would like to research. Plan the project, collect and analyse the data, prepare and present a brief report on your findings. Include all the information in your business plan workbook.

3. Promote the product or service of a new venture

• At the end of this outcome, you should be able to:– define promotion– present suitable ways in which to promote the

product/service of the new venture– provide examples– explain how the promotion will be implemented


3.1 Promotion• What are the main components of

promotion?– Advertising– Personal selling– Sales promotions– Customer relations


3.1 Promotion• What are the goals of promotion?

– Tell them about the existence of your business– Get them to visit– Get them to buy– Convince them to come back


3.2 Methods of promotion


3.2.1 Advertising• What are the main goals of advertising?

– Use advertising to produce immediate sales– Make it easy for potential customers to respond to your

advert– Be creative– Try to find “clever and creative” methods your

competition does not use– Go lean– Reduce the size or colour and advertise more regularly– Share your resources– Identify other complementary (not competitors)

businesses and do a combined advertising campaign


3.2.1 Advertising media• What are the advantages and disadvantages

of the following media?


Activity 14


Mr John Mahlangu owns a small café in Khayelitsha outside Cape Town. There are many similar Spaza shops in his area and competition is therefore very strong. He was wondering how advertising could help to improve his business. He knows his target market very well and eventually came up with the following idea.

People in his area have great difficulty with their mail. They don’t have postal boxes and mail delivery is very unreliable or non-existent. He went to the Post Office, obtained a Private Bag address and a big red mailbox. The address was advertised (made known) in the area and every day he went to the Post Office to fetch the residents’ mail. He also made pigeonholes in his café with the names of all the people whose mail came to that address.

Activity 14


1. What do you think happened to his business? Give a detailed description to cover the following topics:– Target market– 4 Ps of marketing– Advertising medium

2. What is the “Big Red Mailbox” of your future business?

Activity 15


• Discuss your business in your small group, focussing on the following:1. According to the group, where should you

advertise?2. Are there other forms of advertising not

mentioned in the table?3. What is the cost of placing an advertisement in

your local newspaper?

Developing an advertising plan


Advertising plan

Create the message

Use the AIDA criteria

Measure the results

Compile the budget

Developing an advertising plan1. Create an advertising message

– Design the message which reflects the image of your business– Plan the advert in advance to ensure a consistent appearance and

message – Use attention-getting techniques – Design the message to be short, direct and to convey a single idea– Highlight benefits to the customer rather than mentioning

features of the product – Choose colours carefully– Let headlines grab the reader– Use pictures that complement the product– Identify your business clearly– Include the price - this is one of the most important

considerations for many customers. However if you are not the cheapest, think twice!


Activity 16


• Study the advertisement and decide whether it is a good advertisement or not. Take all the guidelines into consideration.


3. Measure results– Keep a record of all enquires about your

product– Ask: ‘Where did you hear about our product or

service?’



4. Prepare an advertising budget– Why do you think an advertising budget is

helpful?• The advertising budget can be more evenly spread

throughout the year• Take advantage of dates such as Valentine’s Day,

Mother’s day and Christmas• Become more creative given a limited budget• An advertising medium such as newspapers can be

arranged well in advance


Plan an advertising budgetAdvertising plan

Month Activities for the month Costs SalesMarch Place an ad in the

classified section of the local newspaper

R85 R3000

April Organise a demonstration at the local shopping centre plus handling out pamphlets

R300 R9000


Plan an advertising budget


%83.2

10030085

100salesmonthly Budget

costs gadvertisinmonthly Budgetedsales of Percentage

x

x



• Design an advertisement and complete an advertising plan for your business. The total amount you plan (budget) to spend must be included in your financial plan.

3.2.1 Sales promotion


3.2.2 Sales promotion• Sales promotion refers to any activity where

direct contact is made with the customer while promoting your products or services


3.2.3 Personal selling


3.2.3 Personal selling• Knowledge about your product

– Know the features and benefits of your products or services very well. Not only what the product is or has, but also what it does for the customer

– Know your business, delivery times, guarantees, etc– Know all the prices and possible discounts of your

products– Read newspapers daily so that you know what is

happening in the marketplace– Know all the different selling techniques, including

how to approach a customer and eventually how to close the deal


3.2.3 Personal selling• Develop a selling system

1. Know all the products, prices, your competitors’ prices etc2. Treat and greet the person well and create a professional

impression3. Find out exactly what is in the customer’s mind and start

matching the customer’s need with products4. First sell the benefits and explain the features later5. Handle objections - maybe the customer just needs more reasons

to buy6. Closing the sale is all about timing and technique. Use indirect

methods such as, “Will you take the yellow or the blue?”7. Confirm that the customer has made the correct buy and

compliment him/her8. Call later to enquire if the customer is happy (big orders)


3.2.3 Personal Selling


3.2.3 Personal Selling• Big mistakes

– Don’t give someone your business card unless they ask for it

– Try getting to know the person better, they will ask for it

– Don’t set up a meeting until you know more about the person

– Don’t dominate the conversation, listen more– Don’t say or do too much. Give them a taste of it and let

them ask for more– Don’t call them persistently. Remain available once you

have given them the information they need. They will contact you when they are ready


3.2.4 Sales Letters• Personalised• Same principles apply as when addressed to

an individual


3.2.5 Sales promotion• Why might you have a sales promotion?

– To turn slow moving inventory into cash• Hold a sale• Display the item more prominently

– Introduce a new product or service to an existing market

• Customise or adjust the product• Appeal to a specific target market• Change the attitudes of customers• Price the new product differently• Package it an a way that makes it more appealing


Case study: Cell C


• Until a few years ago, MTN and Vodacom were the only cellphone providers in South Africa. The technology was new and both companies offered very similar products. The news that a third cellphone provider was entering the South African market was received with some skepticism. Will they be able to introduce their product into an existing market? Their advertising slogan or pay-off line “Cell C for yourself” clearly targeted the individual and tried to make you feel special. Read the article below and discuss the questions that follow in your group.

Case study: Cell C


Cell C wins award for Joburg city art CELLPHONE operator Cell C has won an international award for

its innovative “For the city” art advertising campaign in downtown Johannesburg.

The award, given by international media monitor group Mediaedge:cia, is entitled the Global Idea Award. Over 70 entries were received from around the world. The competition was launched with the aim of recognising the best media campaigns worldwide.

“We’re extremely proud of this body of work, it’s a world-class effort, we’re very, very proud to have won,” says Moira Sheridan, Media and Public Relations Manager at Cell C. The campaign was designed to help revitalise the inner city. Cell C launched in South Africa in November 2001 and has so far signed up more than 1.3 million subscribers.

Case study: Cell C


Questions1. Compile a list of at least three different Cell C advertisements

that the group members are aware of. Exclude the examples in the case study

2. What strategy or strategies did Cell C use and are they still using to enter the market and to grow its market share?

3. Ask each member of the group what image or emotion they think of first for each of the four cellphone providers1. MTN2. Vodacom3. Virgin4. Cell C

4. Is your group in agreement with the answers above? What lesson can be learned from these answers?

4. Discuss customer relationsAt the end of this outcome, you should be able to:• Discuss customer relations practices, e.g. after-

sales service, customer surveys to determine levels of customer satisfaction

• discuss the process for recording customer information

• explain approaches for correct use of customer records in marketing and selling business products / services

• describe an implementation plan for customer relations


4.1 Customer relations• How do you build good customer relations?

– Build trust– Create a relationship– Be empathetic– Reciprocate


4.1 Customer relations• What actions can you take to better

customer relations?– Provide better customer service– Make call centres more efficient– Cross sell products more effectively– Help sales staff close deals faster– Simplify marketing and sales processes– Discover new customers– Increase customer revenues


4.2 After sales service• Steps to take to ensure good after sales service

– Call a customer a few days after a major sale to ensure that he/she is still happy

– Handle customers’ complaints promptly– Always do what you say you will do– Call a customer if you think of something that

might solve his / her problem– Call a customer you know received a very good

service from your business. It will impress him/her even further


4.3 Dealing with complaints• Acknowledge that the customers have a right to be

irritated i.e. “I understand why you are unhappy”• Give an assurance that you will take care of things

and then do it• Make a sad-glad statement, i.e. “I am sorry you

experienced a problem, and I am glad you told me about it!”

• Ask the customer what will make him happy, e.g. “How can I make this better?” Customers often ask for less than you thought it would take to rectify matters

• Confirm that you will do it because you want to keep him/her as a customer


4.4 Measuring customer satisfaction

• How does one measure customer service– Use a customer service questionnaire, similar to

the market research questionnaire


4.5 Keeping records• What is a database?

– A database is a record of customers that contains a variety of information

– Information contained can include• Current details• Responses to advertising campaign• Courier delivery dates• Sales and purchase dates• Account information• Service and support records• Demographic data• Web sales data


4.5 Keeping records• Reporting customer information


5. Explain the basic principles of negotiation to secure new business

• At the end of this outcome, you should be able to– Identify applications to stimulate customer interest in

the features of product/service– Identify ways to maintain customer satisfaction by

responding objectively to customer queries relating to goods or services

– Discuss the process for recording evidence of sales performance

– Explain how to achieve professional excellence against targets by using records of sales performance

– Prepare information to respond to further customer needs, & update customer records



• Applications to stimulate customer interest in the features of product/ services– Creative advertising– Focus on regular “sales”– Get more involved in personal selling, develop

an effective selling system– Send out regular sales letters– Put products or a service on “promotion”



• Ways to maintain customer satisfaction– Create a relationship with your customers– Be empathetic when listening to them– Reciprocate by giving a little of yourself– Provide an after-sales service. Call them and

find out whether they are satisfied– Deal effectively with complaints by adhering to

the guidelines dealing with complaints. Don’t pretend you care for your customers. Care about them



• Records of sales performances– Link a specific sale to the salesperson– This can be measured against sales targets for

each salesperson



• Information to respond to further customer needs, and update customer records– Keeping accurate customer information of your

customers– Different customer database categories will assist

with this. Examples are:• Did they respond to advertising campaigns?• Courier delivery dates• When they bought • What they bought• Demographic data• Did they buy from your website?


Summative assessment


• Doran Knight decided to open a gas line installation business in Walmer, a suburb in Port Elizabeth. Municipalities around the country encourage people to switch to gas since it’s cheaper and electricity is now a scarce resource. We all need to save electricity. Doran suspects there is a real gap in the market and decided to investigate.


Entrepreneurship Level 2 Future Managers 102

• He discovered the following:• There are two other gas appliance-related stores in the area, but

since the demand is growing, things are looking up. Also, not one of them currently does gas installations. The other matter that caught Doran’s eye is the newly introduced Council (municipality) regulations for all new gas installations. It is now a specialised service. A “gas plan” (almost like building plans) must be submitted and approved before a new gas installation is allowed. Doran thinks that he can apply for this on behalf of his customers and once approved, do the actual installation. A typical installation will include a gas line from the gas bottle that must stand outside the house, to the stove, geyser and even a fireplace. A “gas regulator” and fire extinguisher are other safety features to be installed in keeping with the new council regulations.



• 2800 families live in the area. The average income is R10 000 per month. Doran estimates that they spend approximately R500 per month on electricity. Doran discovered that at least 10 households per month want to switch to gas. The cost of a typical gas installation is R1200.

Questions


1. Describe Doran’s target market.2. Pick an appropriate name for Doran’s business and

explain why you think it is a cool name3. How would you ‘brand’ Doran’s business?4. Design an advertising strategy for Doran’s business5. Draw up a very simple “questionnaire” for Doran’s

business to test whether households want to switch to gas. You may only ask four questions under each section of the questionnaire

6. Calculate the size of Doran’s market7. Design a poster for Doran’s business. Use the name you

picked earlier as part of your design.

Recap• Can you Identify customers for a new venture?

– Identify basic needs common to all people and rank them in order of importance?

– Compare the basic needs of people for different socio-economic groups?

– Discuss the possibilities of introducing a new product/service to an existing market?

– Explain, using examples, the concept of benefits of product/service?

– Identify factors that may motivate people to buy the product/service of a new venture?

– Identify attitudes, values and other factors that could prevent people from buying a product/service of a new venture?


Recap• Can you survey opinions for products of the

new venture define a questionnaire?– explain the different components of a

questionnaire?– compile a questionnaire?– identify at least 3 people to be surveyed for

marketing information?– interview the people in the sample using the

prepared questionnaire?– estimate the likelihood of success?– present the information?


Recap• Can you promote the product or service of a

new venture? – define promotion?– present suitable ways in which to promote the

product/service of the new venture– provide examples– explain how the promotion will be implemented


RecapCan you discuss customer relations?• Discuss customer relations practices, e.g. after-sales

service, customer surveys to determine levels of customer satisfaction

• Discuss the process for recording customer information

• Explain approaches for correct use of customer records in marketing and selling business products / services

• Describe an implementation plan for customer relations

If you can, congratulations, you are ready to move onto the next module


NCV 2 Entrepreneurship Hands-On Support Slide Show - Module 2

Education

Transcript of NCV 2 Entrepreneurship Hands-On Support Slide Show - Module 2