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Cheat Sheet: Marketing 101: The Fundamentals
What is Marketing? What is marketing? !" Most people mistakenly identify marketing with selling and promotion. !" While selling and promotion are a part of marketing, they are not the most important part. !" In Principles of Marketing Philip Kotler stated: o If the marketer does a good job of identifying consumer needs, developing appropriate products, and pricing, distributing, and promoting them effectively, these goods will sell very easily. Defining Marketing… !" Marketing can be defined as an activity directed at satisfying needs and wants through exchange processes. !" The ultimate goal of marketing is to make selling nonessential, !" To know and understand the customer so well that the product or service fits him or her and sells itself. Goods, Services, & Ideas… !" Marketing deals with goods, services, and ideas. !" A good is something someone can touch. !" A service is providing an intangible benefit to customers. !" An idea can include concepts or images. !" For this course, we will use the word product to refer to goods, services, and ideas. Needs, Wants, & Demands… !" One of the underlying concepts of marketing is trying to satisfy a customer’s needs, wants and demands. !" Needs are plentiful. Basic human needs include food, clothing, warmth, safety and belonging. !" Wants are simply needs shaped by culture and the individual. !" Demands are simply the wants of a consumer when backed by the ability to pay for that want. Exchange Processes… !" Marketing usually occurs to help facilitate an exchange between a buyer and seller:
Dynamic marketing environment… !" There are many forces that affect the marketing environment, including:
o Competition o Laws and Regulations o Economic and Social Conditions o Cultural Factors !" These forces can be dramatic and difficult to predict. !" Be aware of these forces because they can create threats and generate opportunities for your business. The marketing mix… !" The marketing mix is another important concept when it comes to marketing. !" The marketing mix refers to activities that a firm can control to produce the response it wants from the target market. !" These variables can be categorized into four groups, also know as the four P’s of marketing. The 4 P’s of marketing… !" Product – This is what you are offering to your target market, be it a tangible product or a service. !" Price – The amount you will charge for your product. !" Place – Channels your product will go through to reach the customer. !" Promotion – How you raise awareness with your target market. The 5th P of marketing… !" While the previous four P’s are important to the marketing mix, there is one that is left out. !" Positioning !" Positioning is not dealing with where you will place your product in the market, but where you will place you product in the mind of the consumer. Conducting Market Research Marketing research data… !" There are two main types of data that will help you in researching your market. !" The first is secondary data. Secondary data is information that already exists somewhere. It was collected for another purpose. !" Primary data consists of information collected for the specific purpose at hand. Start with secondary data… !" Researchers will usually start by collecting secondary data. !" Secondary data can be obtained quicker and at lower costs. !" When collecting secondary data evaluate it carefully to make sure that it is: o Relevant o Accurate o Current o Impartial Collecting primary data… !" Since primary data does not already exist it can become very costly and time consuming to gather. !" There are several ways to collect primary data. !" The most common methods are observation, survey, and experiment.
These methods can be done by mailings, telephone calls, and personal interactions to name a few.
The three research approaches… !" Data is gathered in the observational approach by watching people in either a natural or artificial setting. !" The survey approach is best suited for those who are looking to gather descriptive information. !" The experimental approach involves selecting two groups, giving them different treatments, and then measuring the effects. Contacting research subjects… !" With mail questionnaires you can collect a fairly large amount of information at a low cost. !" Telephone interviewing costs more than mail questionnaires but can provide more information quickly. !" Individual interviewing is another way of gathering information. This type of interviewing may require an incentive to get people to participate. !" Gathering a group of people together to discuss certain topics with a trained interviewer is known as group interviewing. The anatomy of a questionnaire… !" When developing a questionnaire keep the following in mind: o Take your time to make sure that it is carefully developed and tested. o Carefully choose your wording of each question. o The sequence of the questions is also important. o Make sure that all the questions included in the survey are necessary. Interpreting market research… !" Interpreting data can easily become overwhelming if you are not careful. !" Make sure that you report only major findings. !" Do not use too many statistical analyses just for the sake of using them. !" Put your findings into simple terms so that even someone not familiar with the survey will be able to understand them. Analyzing The Market Environment Macro and micro environments… The marketing environment is made up of two environments; !" The microenvironment is the immediate environment that effects the companies ability to serve customers. !" The macroenvironment consists of larger social forces that affect all players in the microenvironment.
Analyzing your company… !" All groups in a company - Accounting, R&D, Manufacturing, Top Management – are part of a company’s microenvironment. !" All these departments will have an impact on the marketing decisions and actions of the company. !" For this reason, the marketing manager should try to work closely with these departments and others when establishing a marketing plan. Distribution channels...
Distribution channels will also play a role in the microenvironment. Suppliers, middlemen, warehouses and transporters are just a few of the factors that will effect the business. !" Be aware of these factors and how they will affect your market planning and decisions.
Analyzing your customers… !" Which customer market will the company operate in? o Consumer o Industrial o Reseller o Government o International !" Each of these markets’ characteristics should be analyzed on how they will affect the company. Competitive forces… !" The number of firms that supply a similar product will play a role in the competitive environment. !" Once you determine the number of competitors, you should then analyze competitive tools that will set you apart from the competition or give the competitions an advantage over you. !" The first competitive tool most companies will use is price. Monitoring competition… !" Be aware of the actions of your competitors. !" Also develop an understanding of the market you are participating in, !" and what the customers in this market want. SEPTE analysis… !" A SEPTE analysis is a process that helps in analyzing the macroenvironment. !" SEPTE stands for… o Social environment o Economic environment o Political and legal environment o Technological environment o Environmental issues Social environment… !" Social environmental factors include demographics and cultural aspects. !" These factors affect customer needs and the size of potential markets. !" Some social factors include: o population growth rates o population shifts o age structure (youths, young adults, retirees, etc.) o the changing in family structure Economic environment… !" Economic trends can affect the marketing environment in several ways. !" Fluctuations in real income determine how much consumers will have to spend on discretionary goods and services. !" Also take into account the income distribution and the average income of your target market.
Other economic factors include income, cost of living, interest rates, and savings and borrowing patterns. !" These factors can have a substantial impact on the marketplace.
Political and legal environment… !" Developments in the political and legal environment can have serious consequences on your marketing efforts. !" Be aware of: o Legislation regulating business o The affects of government agencies such as the FDA, FCC, or EPA on your company. o Growth of public interest groups that positively or negatively affect your business. Technological environment… !" Technological factors can lower barriers to entry and influence outsourcing decisions. !" Some examples of technological factors include R&D activity, automation and rate of technological change. !" Another factor that may affect the technological environment is if a company concentrates only on minor improvements or major innovations. Environmental issues… !" In our ever changing world, marketers should pay close attention to certain environmental factors that could create tremendous impacts on the marketplace. !" Impending shortages on raw materials, increased cost of energy, increased levels of pollution, and government regulation and intervention all play a role in the environmental marketplace. Selecting Your Target Markets What is market segmentation? !" The division of a market into different homogeneous groups of consumers is known as market segmentation. !" Rather than offer the same marketing mix (product, price, place, and promotion) to vastly different customers, market segmentation makes it possible for firms to tailor the marketing mix for specific target markets, thus better satisfying customer needs. !" Not all elements of the marketing mix are necessarily changed from one segment to the next. For example, in some cases only the promotional campaigns would differ. Why segment markets? !" Most small businesses cannot afford to market to the general, mass-market customer—resources are just too limited. !" Instead, it must focus it efforts, communications, and resources on those segments of the market that offer the most promise for the business and that have been neglected by larger competitors. !" The niche strategy aims at making its successful practitioners immune to competition and unlikely to be challenged. Successful practitioners of market segmenting take the cash and let the credit go. They wallow in their anonymity. What defines a market segment… !" A market segment should be: o Measurable o Accessible by communication and distribution channels
o Different in its response to a marketing mix o Durable and not changing too quickly o Substantial enough to be profitable !" A market can be segmented by various bases, and industrial markets are segmented somewhat differently from consumer markets. Consumer market segmentation… !" There are four primary bases on which to segment a consumer market: o Geographic Segmentation, o Demographic Segmentation, o Pyschographic Segmentation, and o Behavioral Segmentation. Geographic segmentation !" Geographic segmentation is based on regional variables such as: o Region (international, national, regional, state, county, city…) o Climate, o Population density (rural, urban, suburban), and o Population growth rates. !" An example: The targeted market segment for Reynold’s Bakery resides primarily in the suburban neighborhoods of northern Hamilton county located in Indiana. Demographic segmentation… !" Demographic segmentation is based on variables such as: o Age, o Gender, o Ethnicity, o Occupation, o Income, and o Family-status. !" An example: The targeted market segment for Reynold’s Bakery is primarily whitecollar executives between the ages of 35 and 55 years of age with an annual household income range between $60,000 - $100,000. Psychographic segmentation… !" Psychographic segmentation is based on variables such as: o Values, o Attitudes, and o Lifestyles. !" An example: The targeted market segment for Reynold’s Bakery is primarily those upper achievers and “experiencers” who are looking for a “third place” between work and home and value healthy, up-scale fast-food such as Starbucks or Panera Bread. Behavioral segmentation… !" Behavioral segmentation is based on variables such as: o Usage rate, o Price sensitivity o Brand loyalty, and o Benefits sought. !" An example: The targeted market segments for Reynold’s Bakery are fast order take-out customers, leisure-stay customers, and offsite-event customers.
Business customer segmentation… !" While many of the consumer market segmentation bases can be applied to businesses and organizations, the different nature of business markets often leads to segmentation on the following bases: o Geographic segmentation—based on regional variables such as customer concentration, regional industrial growth rate, and international macroeconomic factors. o Customer type—based on factors such as the size of the organization, its industry, position in the value chain, etc. o Buyer behavior—based on factors such as loyalty to suppliers, usage patterns, and order size. Market Positioning The concept of positioning… !" One of the best-known names in American advertising circles is David Ogilvy. After spending several billion dollars on advertising, Ogilvy listed 32 things his ad agency had learned. !" Of the thirty-two, he said that the single most important decision involved positioning the product. He claimed that marketing results depended less on how advertising was written than how the product or service was positioned. !" In their 1981 book, Positioning: The Battle for your Mind, Al Ries and Jack Trout describe how positioning is used as a communication tool to reach target customers in a crowded marketplace. !" While positioning begins with a product, it’s not what you do to product. Positioning is what you do to the mind of the customer. Marketing then becomes a battle of perception not products. Positioning Strategies… !" There are essentially three generic positioning strategies: o Positioning a leader within a unique niche o Positioning the follower o Repositioning the competition To position your product or service… !" Ask yourself, “How can I be the first to claim a unique position in the mind of my customer.” !" What exactly is my positioning message? !" Remember, your consumer's mind reacts by accepting only what is consistent with their prior knowledge or experience. !" Don’t try to change their mind, instead find a position that they already believe to be true or have trouble being in opposition to such as the “Clean Air Act.” Finding your niche… !" Remember, you must own your niche and own it outright. No one else can occupy your space. !" If you can’t own it, especially from a marketing expenditure outlay, then decrease the size of niche until you can. !" If somebody else occupies your chosen space try to reposition them. Use the worksheet titled, Positioning Strategy Guide found in the SmallBizU Knowledgebase to formulate your positioning strategy.
Finally, let’s consider your message… !" Your positioning message is what you will consistently reinforce to your selected niche. !" The message should help your customer identify, understand, and remember your position. !" To be effective, your message needs to be short—usually under five words—three or less is better. !" You should also try to let go of the intangibles such as your product features and price points and speak to your customer’s emotions. For example: Just do it—Nike. To craft your message… !" Begin by listing why your customers choose to do business with you rather than your competitors. !" Try to list about three to five reasons listed in the order of importance. !" Now, narrow down the key difference between your business and your competitors in a single word. Be very careful… !" When you listed why your customers choose to do business with you, it is probably true that you included words like: quality, customer service, expertise, selection, or location. !" Repeat this to yourself: These words represent boring, rational argument. In fact, they are probably the exact words that your competitor would list as well. Avoiding rational logic… !" When you appeal to rational thought you, in effect, create an argument in the customer’s mind. !" To solve this issue, try moving your message from the customer’s head to their heart. !" To do this you need to appeal to their emotions. An example of selling emotions… !" A grass seed company tried an experiment. !" They took their seed and put it into two separate packages: o One simply said Grass Seed and the price of $.99. o The second was named Lawn Seed and showed a beautiful lawn flowing down toward a river. The price was $3.99. !" Remember, the seed inside the packages was identical. But nonetheless, the Lawn Seed outsold the grass seed by a factor of 4:1. !" People don’t want grass seed but rather the hope, feeling, and aspiration of having the beauty of that pictured lawn—and that’s really what they are paying for. Consider your message again… !" Go back and review your positioning message and ask yourself, “Does it create boring, rational argument or does it sell emotional hope and aspiration?” !" Start by re-writing your message in a sentence and then whittle your message down to three words or less. !" Remember Nike didn’t say, “We have the highest quality shoes made through stateof-the-art processes of the best procured materials meaning they are long-lasting, durable, and offered at an excellent price point.” !" No, be very clear, they said: “Just do it.”
Designing Products & Services What is a product? !" A product is anything tangible or intangible received in an exchange !" A product can be an idea, a service, or a good: o A good is a tangible physical entity—a Big Mac. o A service is an intangible result of the application of human and mechanical efforts to people or objects—child day care. o Ideas are concepts, philosophies, images or issues—Mothers Against Drunk Driving (MADD) Products fall into one of two general categories…. !" Consumer products: Products purchased to satisfy personal needs. !" Industrial products: Products bought to use in a firm’s operations, to resell, or to make other products Consumer products… !" Convenience products are relatively inexpensive, frequently purchased items for which buyers exert minimal purchasing effort. Ex. Chewing gum !" Shopping products are items for which buyers are willing to expend considerable effort in planning and making the purchase. Ex. Appliances !" Specialty products are items that have unique characteristics and that buyers are willing to expend considerable effort to obtain. Ex. Mont Blanc pen !" Unsought products are products purchased to solve a sudden problem. Ex. Automobile repairs. Industrial products include… !" Raw materials !" Major equipment !" Accessory equipment !" Component parts !" Process materials !" Consumable supplies !" Organizational services Product line and the product mix… !" A product line is a group of closely related product items viewed as a unit because of marketing, technical, or end-use considerations. Ex. A children’s line of clothing. !" A product mix is the total group of products that an organization makes available to customers. Product life cycle… !" A new product will go through a four-stage process throughout its lifetime: o In the introduction stage the firm is seeking to build awareness and develop the market. o During the growth stage the company is seeking to increase their market share by building preference over their competitors. o In the maturity stage growth slows as similar products appear on the market. o Sales fall rapidly in the decline stage. What is it that you sell? !" One of the first questions to ask yourself is what does your product do? !" Other questions that you should address are:
o o o o
What need is addressed by the product? What are its features and benefits? Who supplies the products or materials? Whether you make or resell a product, these questions are important to answer.
Manufacturing a product… !" If you manufacture a product, the following questions need to be addressed: o How is it produced? o What materials and labor are required? o How will its quality be measured and controlled? o What is its technological lifespan? o What research and development has been conducted and what still needs to be done? Selling a service… !" Delivering a service can be quite different then manufacturing a product. !" Some questions to address may include: o What services do you offer? o How do they work? o What materials or equipment is needed? o What are your labor needs for these services? o What are the steps in your service process? o What benefit(s) do you provide customers? Packaging your product… !" After you have addressed questions about your product, you should then consider how you will package it? !" The primary function of packaging use to be to hold and protect the product. !" Today, however, packaging is becoming an increasingly important marketing tool. Designing the packaging… !" Many decisions are needed about the packaging – size, shape, color, material, and label. !" Be sure that the packaging is consistent with the product you are offering. !" Run engineering, visual and consumer tests when developing the packaging. !" Also reevaluate the packaging frequently after it has been introduced into the market. UPC barcodes… !" Once a company has designed the packaging for a product, many want to include a UPC barcode on their product. !" You can obtain a UPC barcode through the Uniform Code Council, Inc. Product liability insurance… !" Americans initiate more product liability lawsuits than do customers in any other country in the world. !" There has been a 983 percent increase in product liability cases heard by federal courts since 1974. !" A few famous cases you might recognize… o Firestone Tire/Ford Explorer (tire blowouts) o Mrs. Liebeck vs. McDonald’s (hot coffee) !" Product liability may occur when a customer suffers harm from using the product. !" To incur liability you don’t necessarily have to be the manufacturer.
Everyone down the supply chain (including the wholesaler and retailer) could be affected. !" A competent professional can help you determine what level of insurance your business will need.
Regulatory issues… !" Depending on what type of product you will offer plays an important role in regulatory issues that will apply. !" To find out what regulatory issues apply to your product visit the following agencies: o Federal Trade Commission o Food and Drug Administration o Consumer Product Safety Commission Branding… A brand is an identifying name, term, design, or symbol—it’s the living idea of your product. !" There are several components of branding, including: o Brand loyalty o Brand recognition o Perceived brand quality and o Brand associations !" Each of these four major elements of a brand combine to create “brand equity”—the marketing and financial value associated with the brand’s strength in the market.
Pricing Products & Services Pricing decisions… !" There are a number of internal and external factors that will come in to play when setting prices. !" Some of the internal factors may include pricing objectives, strategy and costs. !" External factors may include nature of the market and demand, competition and the economy. Pricing objectives… !" Pricing objectives help answer the question: What are you trying to achieve with your pricing strategy? o Survival o Profit o Return on Investment o Market Share o Cash Flow o Status Quo o Product Quality Pricing strategy… !" Once you have determined your objectives you should then focus on the methods you will use to determine your prices. !" Keep in mind laws that regulate pricing and pricing strategies such as the Clayton Act. !" For more information on the Clayton Act go to: http://www4.law.cornell.edu/uscode/15/12.html
Types of pricing strategies… !" There are several basic pricing strategies: o Skim Pricing - Set your price high with the goal of capturing short-term profits. o Penetration Pricing - Set your price low to discourage competition and appeal to a larger market segment. o Fixed Pricing - Price is set by manufacturer or middleman and not subject to negotiation. o Variable Pricing - Price is negotiated between buyer and seller. o Price Lining - Establishes only a few prices for all the items within a given product line. o Keystone Pricing - percentage markup applied to the product’s cost. o Customary Pricing - set price at the considered standard level for the product. o Psychological Pricing - strategies that try to make the product’s price more desirable. o Prestige Pricing - encouraging consumers to equate pricing with quality and status. o Geographic Pricing - charging different prices for different regions of geography. o Pricing Leader - determining if you will be a price leader or follower. The nature of the market… !" Be aware of the floor and ceiling prices in your market. !" The costs of the product will set the floor for the marketer. !" The ceiling is set by the market and its demand. !" Set your price between these two points but keep in mind consumers will compare the price of the product against the value of owning it. !" Avoid establishing where the costs will outweigh the benefits, and consumers will no longer buy your product. Competition and their prices… !" Consumers will compare the price and value of a product to that of comparable items. !" Learn the prices and quality of your biggest competitors. !" Use this information in helping you to establish a pricing point of your own. Economic factors… !" Booms, recessions, inflation and interest rates all effect the pricing of a product. !" These economic turns will affect the costs to produce and consumers’ sensitivity to price and benefits of the product. !" Be aware of the current economic conditions and the economic forecast for the future when establishing a price. Placing Products & Services Placing decisions… !" Placing your product is the third of the four P’s. !" It encompasses channels of distribution that serve as a transporter for getting your product to your customers. !" Decisions you will need to make in placing your product include market coverage, channel member selection, logistics, and location. Market coverage… !" You must first determine which markets you are going to reach and with what objectives.
Be sure to include items such as the desired level of service and functions to be performed by channel members. !" Constraints to developing your objectives may come from several sources: Customers, products, intermediaries, company policies, competitors, and the environment.
Channel member selection… !" Marketing channels direct the flow of products from producers to consumers. !" They may go directly from producer to buyer. Or the may have several steps between production to consumers. Part of the process… !" What part of the distribution process does your business handle, if any? o Warehousing o Order processing o Inventory management o Packaging o Materials handling o Receiving o Transportation and shipping Retailers in the distribution channel… !" As you move down the marketing channel from manufacturing, to wholesaling and so on, it may become unclear what your distribution channel will look like. !" Often, retailers believe that they do not have a distribution channel. !" The fact is a retailer’s location is their distribution channel. Number of channel members… !" You must decide how many intermediaries will be in the marketing channel. !" Several middlemen will be needed for intensive distribution - stocking your product in as many outlets as possible. !" Limited dealers will be granted the rights to distribute your product with exclusive distribution. !" Selective distribution stands in the middle. It requires more than one intermediary, but fewer than the intensive distribution. Supply chain management… !" An important function of the marketing channel is the joint effort of all members to create a supply chain. !" Supply chain management refers to the long-term partnerships among channel members to reduce inefficiencies, costs, and redundancies in the market channel. !" If managed correctly, a competitive advantage can be established. Logistics of your channel… !" When planning your distribution channel you should be able to answer the following questions: o What will the ordering process look like? o Where will inventory be located? o How much inventory should be kept on hand? o How should goods be shipped? Shipping options… !" There are several way to handle shipping:
o o o o
FOB Factory Pricing: The costs of transporting the product from seller to buyer are borne by the buyer. Freight Absorption Pricing: Paying some of the transportation costs in order to bring the price in line with competitors. Uniform Delivered Pricing: A standard price charged regardless of location. Zone Pricing: Charging different prices for different regions of geography.
Location of your business… !" An important decision that you need to make is where will your business be located. !" Make sure the location you select fulfills the needs of your business; location needs, space needs, accessibility needs, etc. !" Also check to see what traffic counts the facility experiences. (check with your state Department of Transportation) !" Choosing a Successful Location for Your Business The cost of your location… !" What will it cost to lease or buy the needed facility? !" Make sure that you can afford the location that you choose. !" Also find out the term and duration of the lease of the desired location. !" For more information, go to: Finding and Renting Space for Your Business Channel regulations… !" There are a multitude of federal, state, and local laws governing channel management. !" Through such laws as the Sherman Antitrust Act and the Federal Trade Commission Act, the government is trying to make sure that free trade and competition are protected. Promoting Products & Services The promotional mix… !" The promotional mix consists of four main tools. o Advertising, o Personal selling, o Sales promotion and o Publicity !" By identifying these tools you will be able to lay out the basis of a media plan and promotional budget for your company. Advertising and its various forms… !" Advertising deals with communicating with your customers in a very public way. !" By advertising you are able to repeat your message to customers numerous times in various formats. !" However, be aware that while you are able to get your message to customers, they do not have to pay attention to it. Fine-tuning your ad budget… !" For many location-based retailers and services take 12% of your projected gross sales, subtract the cost of your rent and the result should be your ad budget. !" This formula generally works for businesses that sell their products at 100% markup. !" The formula takes into account the value of foot traffic so if you are paying a premium for rent you shouldn’t have to spend much on advertising, but if you are off the beaten path you’ll have to advertise more to get noticed.
Of this budget amount, assign 50% to general advertising, 25% to regular sales, 15% to special opportunities and 10% brochure and material development, etc.
The terms to understand… !" When advertisers discuss media, they talk of reach and frequency. !" Reach refers to the number of people who will be exposed to the message; !" Frequency refers to the number of times each person will be exposed. !" Although, you’ll strive for reach in certain situations, frequency is best. !" Remember, familiarity breeds confidence, and confidence serves as the springboard for sales. Tracking your weapons… !" You must diligently keep track of which weapons are hitting your target and which are missing. !" Merely knowing can double the effectiveness of your marketing budget. !" For each marketing weapon that you choose, you must figure out through creativity how it can be measured and tracked. For advertising media… !" Radio is usually the most intimate. !" Newspaper is prime for disseminating news. !" Magazines get readers involved bestowing credibility. !" Television is perfect for demonstrations. !" Direct mail and email allow for the most careful aim of your target. !" Outdoor signs are superb at reminding people. !" Yellow pages hit the very hottest of prospects. !" Brochures offer the opportunity to go into detail. !" Telephone marketing offers great flexibility. !" Advertising specialties work to remind people. !" Public relations can prove your deeds better than words. !" Publicity adds a great deal of credibility. The pros & cons of personal selling… !" Personal selling may be the most effective tool at certain times due to… o Personal selling involves face-to-face communication. o Lasting relationships can be established with personal selling. o When face-to-face with a salesperson, the customer is more likely to respond. !" While personal selling is an effective, its cost can be overwhelming to a company. Selecting a sales force… !" If you decide to take part in personal selling, a sales force will be needed. !" Be sure to ask yourself how you will handle the following: o Recruitment and selection of sales personnel o Training sales personnel o Compensation and motivation o Controlling and evaluating sales force performance Sales promotion… !" Sales promotions usually have three distinctive characteristics that help to set them apart. o They provide information and help gain attention. o They provide an incentive to the customer. o They encourage the consumer to buy quickly.
Consumer sales promotions… !" Sales promotions for consumers can come in various forms. !" These forms include coupons, demonstrations, frequent-user incentives, point-ofpurchase displays, free samples, money refunds or rebates and contests or sweepstakes. Business sales promotion… !" There are also numerous ways to offer sales promotions to businesses or industries. !" When targeting these types of customers try offering quantity discounts, free merchandise, buy-back allowances, dealer listings or cooperative advertising. The appeal of publicity… !" A well-planned publicity campaign along with other promotional tools can be highly effective and help you save money at the same time. !" Part of the appeal of publicity is that it can offer high credibility, it can catch people off guard and help dramatize a product or company. Types of publicity tactics… !" What types of publicity tactics will you employ? !" A press release is one option. Some reasons to issue a press release include: !" Support of a social cause !" Winning of quality awards !" New product launches !" Speeches of top management !" Other types of publicity include public speaking engagements and public events. Creating A Marketing Plan Why have a formal plan? !" Many entrepreneurs insist that hustle is all that is required in the marketing of their business. !" But energy alone is not enough. Energy must be directed by intelligence. !" Intelligent marketing is marketing that is first and foremost focused on a core idea. !" All your marketing must be an extension of this idea—it isn’t enough to have a better idea—you need to have a focused strategy. The plan’s structure… !" A complete marketing plan includes the following three sections: o The marketing plan identifies the market and your strategy. o The creative plan is similar to the marketing plan but is limited to the content of your marketing materials. o The media plan which sets forth and details your selected media weapons and media calendar. Let’s start with the marketing plan… !" The marketing plan identifies the market and your overarching positioning strategy. !" The length of your final marketing plan is up to you and depends on your organizational culture and the audience that will read and use the plan. !" At first, though, try to state it in just one paragraph. !" According to Jay Conrad Levinson, author of Guerilla Marketing, a simple plan can be created in just seven sentences.
A simple marketing plan… !" Sentence one explains the purpose of the strategy. !" Sentence two explains how you’ll achieve this purpose. It describes your competitive advantage and benefits. !" Sentence three describes your target market—or markets. !" Sentence four, the longest, outlines the marketing weapons you’ll employ. !" Sentence five describes your niche—your positioning. !" Sentence six reveals the identity of your business. !" Sentence seven states your budget, which should be expressed as a percentage of projected gross revenues. The creative plan… !" Almost any marketing person worth his or her salt will tell you that marketing is not creative unless it sells. !" Advertising legend Leo Burnett used to remind his staff that a person can be creative by coming downstairs with his or her socks in their mouth—but what’s the point? !" There must be a reason for your creativity, and your creativity should never detract from your message. Developing the creative plan… !" A creative strategy is similar to a marketing plan but is limited to the marketing materials only—and directed solely at their content. !" A creative plan can be written in as little as three sentences which detail: o The purpose of the creative message o How the purpose will be achieved o The mood, tone, or personality of the advertising Your marketing calendar… !" Once you’ve selected the marketing media and weapons that can propel you to your goal, be sure you use them in an orderly, logical manner. !" This can best be accomplished by the third and final section of your marketing plan: the marketing calendar. !" A marketing calendar indicates whether or not you can use these methods properly because it forces you to come to terms with the costs and realities of the media you select. A more complex plan… !" In some cases you may need a more in-depth marketing plan. !" This plan can be structured in the following format. o Executive Summary o Challenges o Situation Analysis o Market Segmentation o Selected Marketing Strategy o Short & Long-Term Projections o Conclusion o Appendix Executive summary & challenge… !" The executive summary is simply a summary of the marketing plan. !" It should highlight the main points of your plan. !" The challenge section of the marketing plan should include a brief description of the product that will be marketed.
The challenge should also include associated goals such as sales figures and strategic goals.
Situation analysis… !" The situation analysis should include the following: o Company Analysis - Goals, culture, strengths and weaknesses. o Customer Analysis - Number and type of customer, value drivers and decision process. o Competitor Analysis – Market position, strengths, weaknesses and market share of competitors. !" The situation analysis should contain section on collaborators such as subsidiaries, distributors, etc. !" A SEPTE may also be included in the situation analysis. A SEPTE analysis will help in measuring the: o Social and cultural environment o Economic environment o Political and legal environment o Technological environment o Environmental issues SWOT analysis… !" A SWOT analysis is the last section of the situation analysis. !" This type of analysis helps to determine internal and external environmental factors. !" The internal factors are the strengths and weaknesses of the business. !" The external factors are the opportunities and threats in the market. !" SWOT analysis worksheet Market segmentation… !" The purpose of the market segmentation section is to help describe the segment(s) of the market you are targeting. !" Included in this segmentation are: o A description of the target market o Percent of sales for this group o What they want o How they use the product o Support requirements o How to reach them o Price sensitivity !" Include a segment analysis for each market segment you are targeting. Selected marketing strategy… !" This section of the marketing plan should include a discussion of the strategy you have selected. !" It should include decisions you have made regarding each of the 4 P’s (product, price, place, and promotion). !" Be sure to include things such as brand name, scope of product line, list price, payment terms, distribution channels and advertising issues in this section.
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