BUSINESS ENTERPRISE SIMULATION - Breakeven

a. goal for a day, a month or a week

BUSINESSMAN VS ENTREPRENEUR b. point you need to sell
- They are the same in nature but different in focus. c. you need to exceed in order to collect revenue
- Businessman = Profit • The greatest value for COH is 0 since you cannot spend what
- Entrepreneur = Sustainability you don’t have.
Ø Profit
Ø People d. Balance Sheet
Ø Planet - Financial Statement
4 Important Aspects of Business a. Assets b. Liabilities c. Owner’s Equity
- Assets = Liabilities + Owner’s Equity
1. Marketing
- the 8P’s The formation of Evolution of Entrepreneurs and their
- you don’t need to sell, people will come to you Enterprise
- The people is considered as the most important P’s of Ø “Wannapreneur” has great ideas but an “entrepreneur”
marketing starts his or her idea early
- you learn by doing
- Product - Positioning - entrepreneurship may be easy but it is challenging
- Price - Packaging Ø Entrepreneurship can be EXCITING, but in reality, it is
- Place - Process difficulty to run a business
- People - Physical Evidence Ø Entrepreneurship is a BOOMERANG, put in the right
effort, and you’ll be rewarded with more effort
2. Operations
- product development In the concept of the animal kingdom, entrepreneurship lessons
- fulfill your promises can be seen as...
- 6M’s • free as a bird
- Money - Machine • eager as a beaver
- Manpower - Management • quiet as a mouse
- Method - Materials • hardworking as an ant • playful as a kitten
• fast as a rabbit
Input • brave as a lion
• Manpower = involved in making the product
at this point BUSINESS FAIL BECAUSE OF
• Management = comprised of the HR or Human Resource - Poor planning
= you need the right people to accomplish the right job - Lack of business knowledge
- Lack of entrepreneurial characteristics
Qualifications: - Inability to work with others
- Failure to choose the right business
✓ Passionate
✓ Hardworking Characteristics of the New Century Successful Entrepreneurs
1. Independent
PUP graduates are usually hired for they are known as dedicated - makes own decision
in doing the tasks assigned to them - self-sufficient
2. Self - Confident
Throughput - secure
• This is where the process of creating the product begins - believe in themselves
3. Has Determination and Perseverance
Output - will power to resolve
- Product or services are being achieved here 4. Goal – Oriented
- The product has to be converted to sales or revenue which - focused
meets the company’s expectation and achieves the quality - know what one wants
product, delivers it on time and prices it right which makes 5. Motivated
up the customer’s expectation. - driven
- inspired
3 Most Important Financial Instruments 6. Act Quickly
a. Sales Report - immediate decisions
- Revenue - Expenses = Income 7. Technology - Wise
b. Income Statement - updated with today’s trends
- Sources of Revenue: 8. Creative
a. Finances b. Operations c. Investments - resourceful
c. Cash Flow Statements - new ways to solve problems
- liquidity of the company
- Cash on Hand (COH)
Anna Mae
Ø Gen Z Is poisoned to become the most entrepreneurial
generation ever – even more so than millennials
a. The fragile teen employment market
b. The rise of peer-to-peer sites and apps
c. The ubiquity of social media
Ø Gen Z online culture cultivates entrepreneurial mind
Do you have what it takes to be an entrepreneur?
Ø Self-assessment : evaluate your strengths and
weaknesses, assess your interest
Ø Assess your aptitude: ability to learn a job
Ø Isenberg Entrepreneur Test
3 Entrepreneurs 3 Countries
1. Passion to Succeed
2. Business Creativity
3. Strong Entrepreneurial Leadership
1. LIM BEE HUAT
- Born in 1952 in Bukit Ho Swee
- When he was 6 yrs. old a big fire engulfed the
neighborhood.
• Pluck fruits from the trees on Orchard road.
• At age of 8 he wanted to work for a living right away.
• Kok-kok nee or boy peddling noodles for the street
hawkers and as an errand runner.
• At the age of nine, Buat moved downtown to work as a
“kopikia”/ Coffee Boy serving coffee, wiping tables and
washing spittoons off the floor.
• Schooling by day
• Disobeyed his parents.
• He tried learning everything about the Kopitiam business
and other vending trades.
• Left home to live in the hawkers center and park.
• At 18, a friend borrowed money on Bee Huat’s behalf to
help the latter open his very own kopitiam.
• Never stopped expanding
• In 1998, he opened the Kopitiam Food Court Branch at
the ground level of Le Meridien Hotel and Shopping Center at
the upscale Orchard Road.
• Cost $3 M. Dollar to renovate.
2. JAY BERNARDO
- Finish a degree in Industrial
- Management Engineering in De La Salle University
- Worked at Johnson &Johnson (J&J) for 4 years
- Production supervisor (2 yrs)
- Industrial engineer (2 yrs)
- Enter Asian Institute of Management (AIM) for MBA
degree and venture thesis for small business
- Formed JAD Group of Enterprises with his wife, Dina
Go; and best friend, Allan Reyes
- Started as a subcontractor with J&J starting with
manufacturing plastic sticks for cotton buds and
eventually expanded to manufacturing full line liquid
cosmetics and paper-based products
- Led to information warehousing, sales and distribution,
and research & development which push him to form
JAD Group of Companies
- Developed the E2E Program or Employee to
Entrepreneur program
- Founder of Let’s Go Foundation
E2E PROGRAM (Employee to Entrepreneur)
- Gave enterprising employees the chance to pursue
entrepreneurship and improve their lives.
LET’S GO FOUNDATION
- Aims to train and develop an entrepreneurial mindset
through education and learning, cultivating a more
favorable attitude towards doing business.
3. IWAN TIRTA
- Received a law degree from the University of Indonesia
in 1958. Became a professor of international law
following graduation.
- Moved to the United Kingdom to study at the London
School of Economics and the School of Oriental and
African Studies.
- Moved to New York City upon the completion of his law
degree in 1965. Worked at the United Nations
headquarters for several years.
- Returned to Indonesia from New York City in 1970. He
started his career as a designer using traditional, hand-
made batik cloth. He studied more about the design,
motifs and process of batik.
- He was widely credited with the promotion of batik
designs within the international fashion industry,
including its magazines and fashion shows. Embraced the
handmade batik design more than the printed ones.
- Expanded into other batik inspired product: Ceramics
and silverware embalished with traditional batik
designs.
- Tirta established PT Iwan Tirta (with trademark name of
Iwan Tirta (IT) Private Collection/ ITPC) in 2003.
- ITPC established its first gallery in 2006.
- ITPC opened its first mall location in 2008. Now it has 9
galleries already in prominent malls and locations in
Jakarta
- In 2007, Tirta partnered with Lydia Kusuma Hendra.
Opened up a line of batik- inspired ceramic dinnerware
called Pusaka Maha Karya (“Heritage Masterpieces”).
As he once said, “I didn’t create batik, but I preserved and
nurtured it like a caretaker.”
Born and Made to be Entrepreneurs
1. The DISTINCTION
- Born
- Made
2. The SIMILARITIES
- Desire to take the less travelled road
- The had an independent mind
- Resolved to be masters of their own FATES
3. Influenced highly or “made” by their environment
Anna Mae

Sources of Innovation and Creativity
1. Talent
- Innovation, Insanity
- It’s the will. Not the skill.
2. Adopt and Adapt
- Adopt: take up and start to use or follow
- Adapt: to change, modify, or adjust to new conditions
- “Taking ideas from other environments and adapting
them for use in your situation is one of the best ways of
implementing novel solutions.”
3. Think bigger, bolder, and better
Ø A VERY GOOD BUSINESS PLAN
- Purpose:
1. First, entice partners, investors and bankers to fund
a business venture
2. Communicate what the enterprise is all about, what
market it wants to serve
3. Show what financial returns it could muster.
ENTERPRISE LIFE CYCLE AND LIFE FORCES
6 STAGES OF THE ENTERPRISE LIFE CYCLE
1. ENVIROMENT SCANNING AND OPPORTUNITY
ASSESSMENT
- The objective of environmental scanning is to clearly
determine opportunities and highlight the risks and
threats for establishing an enterprise

2. EVALUATION OF ALTERNATIVES
- In exploiting a particular opportunity, it is necessary to
evaluate the various alternatives open for taking
advantage of that opportunity.

3. THE IMPLEMENTATION PHASE

- In this phase, actual resources are deployed to establish
the enterprise
- Critical Aspects:
BUSINESS ENTERPRISE SIMULATION a) Purchasing the right machinery and equipment.
b) Designing the best plant of office layout
COMPOSITION OF BES c) Determining proper work flows, cash inventory
- Business Opportunity Search levels and credit policies
- Product/service development d) Devising pay plans, incentive schemes, performance
- Business formation and organization Business criteria and control and mechanism
implementation and control e) Establishing sound management guidelines and
- Business wind-up scope of work, authorities, responsibilities and
- Relevant management reporting in the context of ethical accountabilities
standard and social responsibility f) Targeting the right markets
g) Starting on the right operational footing
Ø After seeking, screening and seizing entrepreneurial
opportunities, the next step is to ESTABLISHING THE
ENTERPRISE 4. COMMERCIAL OPERATIONS
Ø A VERY CLEAR PURPOSE
- Whether it is for generating profits or feeding the - Production goes into full gear. Raw materials are
family, making a difference in the industry or actualizing sources, processed and converted into finished goods
the self, the purpose must be compelling enough to and sold.
MOTIVATE the entrepreneur
- The personal purpose of the entrepreneur is his or her 5. EXPANSION, INTEGRATION, CONTRACTION, AND
personal mission. CONSOLIDATION

Ø A VERY COMPELLING VISION - Depending on the quality of the product, service and
A winning business concept management of the enterprise and depending on the
- Something new industry or market trends, four possible scenarios
- Something appealing emerge in the fifth stage of the enterprise cycle
- Something different
1. Expansion of the plant or service capacity to serve
Ø NOT BY ANY OTHER NAME a bigger market
- Entrepreneur must choose a very fitting name for the 2. Opportunity provided by integrating backward to
enterprise control sources of supply or integrating forward to
downstream processing or end consumer marketing
Ø A COMPANY OF ANGELS 3. Contraction of enterprise operations because of
- Entrepreneurs must choose the “company of angels”,
partners who are well meaning and like-minded. increased competition or enterprise diseconomies.

Anna Mae
 4. Enterprise consolidation to remove excess “fat”,
streamline operations and transform the firm into a
leaner but meaner organization

6. REORIENTATION, REORGANIZATION AND

REHABILITATION
- Even successes beget their own inefficiencies,
bureaucracies and stagnation. This is the stage where an
enterprise finds it necessary to reorient itself.
- Repositioning
- Redefining its market 5

5 LIFE FORCES OF THE ENTERPRISE SOCIAL ENTERPRISE

- Seek to maximize profits while maximixing benefits to
1. The Primordial Life Force: The Entrepreneur society and the environment
- As the life giver, the entrepreneur is driven by great - SOCIAL ENTERPRISE
passion to achieve and succeed. Aside from making the - Their profits are principally used to fund social
business prosper, the entrepreneur strives to uplift the programs.
quality of life of his or her workers and customers - SOCIAL ENTREPRENEUR
- Not to earn a profit, but rather to implement
2. Enterprise Operation: The Regenative Life Force widespread improvements in society.
- Emanates from enterprise operations as money, markets, - FINANCIALLY SAVVY
machines, methods, materials and other production or - tax exemptions
service resources are combined. The resources deployed - 10 % total government procurement
provide physical life to the enterprise. - Non-collateral loans
- Special Credit to windows with banks
3. The Organization : The Inner Life Force - Marketing Assistance
- While money, market, machines, methods, materials - Development Supports
and facilities beget profits and benefits, the propeller - Social Entrepreneurshio Educ Schools
of the enterprise operations is the organization or the - Social enterprise Council
inner life force. This brings in the sixth “M” of
Manpower. Entrepreneur
- Create Value
4. The Product or Service: The Visible Life - Raises Productivity
- The enterprise either processes a product or renders a - Changes the way things are done to achieve better
service. This product or service is the manifestation of its outcomes
work, the essence of the enterprise. - Without continuous growth and progress, success has no
meaning
5. The Relevant World: The Outer Life Force -
- The relevant world is the outer life force because it is 5 CORPORATE SOCIAL RESPONSIBILITY
the external sustainer or destroyer of the enterprise. 1. Consider Moral & Ethical Standards
- This includes factors that influences the fate of the 2. Compassionate Entrepreneur
enterprise such as relevant industry, relevant market, 3. Compliance to Gov’t Laws
relevant government, relevant technological field, 4. Corporate Philanthropy
relevant environmental conditions, and other variables 5. Community benefits from supply chain and market
or factors. linkages of the company

ENTREPRENEUR VS INTRAPRENEUR 3 C’S – COMPASSIONATE, COMMITMENT, COMPETENT

- Person within a corporation who is given the freedom MARKET SCANNING
and resources to initiate projects, business venture, etc.
- Both play leadership roles MARKET
- Intrapreneurship: Take Less Risk - A place where buyers and sellers meet to exchange or
- Entrepreneurship: Have more freedom engage in a transaction of a specific good or service
- 2 types of market:

Anna Mae
 a. PHYSICAL MARKETPLACE – seller and buyer are in
one place to exchange goods and services in
person. E.g Shopping Malls
b. VIRTUAL MARKET – buyers and sellers do not
interact and see each other in a place but there is a
purchase or transaction that is readily available. E.g
Online Market
HOW DO WE KNOW THE CURRENT SITUATION OF THE
MARKET?
Market scanning
- It is the continuous process that actively monitors the
market externally in order to identify the changing
customers’ needs and wants.
- It is also to anticipate competitive actions and to know
the technological changes which will open to new market
opportunities or recognize market disasters.
1. Sales Force Intelligence
2. Customer Feedback
3. After Sales
4. Purchase Intelligence
5. Market Research
Ø SALESFORCE
- Customer relationship management solution that brings
companies and customers together.
- It’s integrated CRM platform that gives all your
departments, including, marketing, sales, commerce, and
service – a single, shared view of every customer
Ø AFTER SALES SERVICE
- Refers to various processes which make sure customers are
satisfied with the products and services of the organization.
The needs and demands of the customers must be fulfilled
for them to spread a positive word of mouth.
Ø MARKET RESEARCH
- Conducting a quantitative and qualitative surveys to
further understand what are the different trends, pricing
preferences, product development of the market
- CONSUMER RESEARCH PROCESS:
There are numerous market research tools used by brands and
businesses –
1. SURVEY
2. PRODUCT TEST
3. PRICE SENSITIVITY 4. FGD
5. UAI
6. OBSERVATION
Ø Survey
• Used to gain critical customer feedback
• Understand customer inclination towards
purchasing products
• Enhance existing products and services
• Make well-informed business decisions
Ø Product Test
• Used to learn what consumers think of a service idea
and get feedback so that a supplier (or a company) can
either cancel development of the service or improve the
service idea.
• Uses a survey methodology
Ø Price Sensitivity Test
• A type of survey given to respondents from which they
could choose at which price they are no longer
interested in purchasing a product or a service
• The price scale is a list of 11-15 prices for the product
or service in ascending order
Ø Focus Group Discussions
• Tool to gather people from similar background or
experience to discuss a specific topic of interest.
• Can be used to explore meaning of survey findings
that cannot be explained statistically
Ø Observation
• Use to better understand how consumers interact with
the product in their natural setting
Ø USAGE, ATTITUDE, IMAGE MARKET STUDY
• Provides information from the perspective of the
consumers
• What service features are important to consumers;
• How satisfied customers are with the various features
of the service from different suppliers
• Demographic information about service consumers,
such as education, gender, and income level
• The research done on consumers’ preferences,
attitudes, loyalty, usage and behavior in the market
using qualitative and quantitative data”
• This allows brands to better understand their
consumers further so so they would know how to interact
with them
Anna Mae
 Ø Sample usage, attitude, image market study
• How familiar are you with the product?
• Which of these products have you used?
• How did you first hear about the product?
• Overall, how do you rate the quality of the product?
• What is something you would like to change about the
product?
• Would you recommend the product to a friend or
associate?
• When was the last time you used the product?
• How often do you buy the product?
• How likely are you to buy the product in the future?
WHY CONDUCT CONSUMER/MARKET RESEARCH?
Ø Content Personalization
Ø Customer Value
Ø Content Optimization
Ø Customer Retention
STRATEGIC PLAN
IT IS THE COMPANYS GAME PLAN
STRATEGY
- Derives its relevance given from the existence of
competition in business
- Involves determination of long-term goals and objectives of
the enterprise including adoption of allocations of
resources necessary to carry out those goals
- Set of Actions to attain corporate objectives
Ø Industry Analysis
- Examination of the industry where the entrepreneur’s
business will participate in, usually in the next three to five
years
Ø PORTERS FIVE FORCES
- Five forces model was created by Michael E. Porter in
1979 to understand how five key competitive forces are
affecting an industry
- Simple framework for assessing and evaluating the
competitive strength and position of a business
organization.
- Objectives:
• Determine an industry structure and the level of
competition in that industry. The stronger competitive forces
in the industry are the less profitable it is.
• Helps organizations to understand the factors affecting
profitability in a specific industry, and can help to inform
decisions relating to: whether to enter a specific industry;
whether to increase capacity in a specific industry; and
developing competitive strategies.
1. COMPETITIVE RIVALRY
- This looks at the number and strength of your competitors.
How many rivals do you have? Who are they, and how
does the quality of their products and services compare
with yours?
2. BARGAINING POWER OF SUPPLIERS
- An assessment of how easy it is for suppliers to drive up
prices.
1. Number of suppliers of each essential input;
2. Uniqueness of their product or service;
3. Relative size and strength of the supplier; and
4. Cost of switching from one supplier to another.
3. BARGAINING POWER OF BUYERS
- An assessment of how easy it is for buyers to drive prices
down. This is driven by the: number of buyers in the
market; importance of each individual buyer, and cost to
the buyer of switching from one supplier to another.
4. THREAT OF SUBSTITUTION
- This refers to the likelihood of your customers finding a
different way of doing what you do. Substitute goods or
services that can be used in place of a company's products
or services pose a threat.
- A substitution that is easy and cheap to make can weaken
your position and threaten your profitability.
5. THREATS OF NEW ENTRANTS
- Your position can be affected by people's ability to enter
your market. How easy is it to get a foothold in your
industry or market? How much would it cost, and how
tightly is your sector regulated?
- Barriers to entry: Patents, Economies of scale, Capital
requirements and Government policies
Anna Mae
Ø PESTLE ANALYSIS - Core activity hub of a bank is lending money to
1. Political - How are government decision influencing your businesses and collecting deposits
organization?
- government policy - tax policy IDEOLOGICAL STRATEGIZING
- Political stability - labor law - Certain organizations exist because they espouse a
- Corruption - trade restrictions definite set ofbeliefs, philosophies, principles, and
ideologies.
2. Economic - How is the local or global economy influencing - Political and religious organizations are the usual
you organization? proponents of ideological strategies although cause-
- Economic growth - Disposable income oriented people’s organization, non-government entities,
- Exchange rate - Unemployment rate and even principled- centered business establishments
- Interest rate espouse this approach.
- Ideologically-driven organizations often have strong
3. Social - How are changes in social a cultural norms cultures and governance.
influencing your organization? - “Human beings can live only by the Universal Truth, in their
- Population growth rate - age distribution dignity of living, all are absolutely equal” - Dr. Yoshio
- Career attitudes - Safety attitudes Maruta, Buddhist scholar and President of Kao Corporatio
- Safety emphasis - Health consciousness - “A force for social change” - Ben & Jerry’s:
- Lifestyle attributes - Cultural barriers restrictions • Executive and lowest paid worker
• Bakery run by homeless people
4. Environmental - How is environment influencing your • Vermont dairy, known for purity
organization • “1% for Peace”, corporate event theme
- Wealth
- Climate Top Down Planning of formulating STRATEGIES from the Vision is
- Environmental Policies also known as the DREAMING approach
- Pressures from NGO’s

5. Legal - How are legal issues influencing your organization?

- Discrimination laws
- Anti-trust laws
- Employment issues
- Consumer protection laws
Bottom Up Planning of formulating STRATEGIES from the
- Copyright and patent laws
Environmental Assessment and the company assessment is also known
- Health and safety laws
as the GROUNDING approach
Strategizing is about setting institutional goals and finding the
best means to reach those goals.

ADAPTIVE STRATEGIZING
- Increase in product DEMAND
- Expand CAPACITY: adding more production capacity,
more branches
- Adding PRODUCT lines & SERVICES : more product, more
market
- Expands geographically outwards, e.g : Puregold,
Hypermart
- 2 rivals continuously provoking each other e.g: SMART
&GLOBE
- Niching - Some organizations find a specialized market
- that they would like to serve in order to avoid battling with
the bigger players
- CONGLOMERATES: MOLECULAR COMPOUND : Complex
molecular compounds have many more connections among
various types of atoms.
Ø Hub - the central business or core activity of the
organization while the spokes are the natural sprouting of
sub-activities related to the core activity

Anna Mae
Organizations should continually monitor internal and external
events and trends so that timely changes can be made as needed.
ACHIEVING SUSTAINED COMPETITIVE ADVANTAGE
1. Continually adapting to changes in external trends and events
and internal capabilities, competencies, and resources
2. Effectively formulating, implementing, and evaluating
strategies that capitalize on those factors
Communication is a key to successful strategic management
BENEFITS OF STRATEGIC MANAGEMENT
• Who will be your customers or beneficiaries?
• Where or in how many places will you be
operating?
• How well will you service your clients or
customers?
• In how many ways will you be wooing and
delighting them?
For all of these questions, you must be able to quantify the
qualities that you seek.

1.Enhanced Communication 3. Greater Commitment marketing PLAN

a. Dialogue a. To achieve objectives a) Marketing Mix (4Ps)
b. Participation b. To implement strategies b) Advertising Research
c. To work hard - Current Situation of brand’s marketing
2. Deeper / Improved - Customer Insights (Market Research)
Understanding - Current Brand Positioning
4. The Result
1.Of others’ views c. Target Market
All managers and
2.Of what the firm is - Market Segmentation Research (Demographics,
Employees on a mission to
doing / planning and why Psychographics, Technographics, Purchase Behaviour)
help the firm succeed
- Brand Personality
- Personification
d) Advertising Objectives
Non Financial Benefits e) Advertising Budget
- Enhanced awareness of threats f) Creative Executions (Sample)
- Understanding of competitors’ strategies Increased
SMALL BUSINESS MARKETING
employee productivity
- Business activities that direct the creation, development and
- Reduced resistance to change
delivery of a bundle of satisfaction from the creator to the
- Clearer understanding of performance-reward relationship
targeted user.
- Enhanced problem-prevention capabilities
MARKETING
Issues in Strategy Formulation
- a concept that will guide a business towards satisfying
- Businesses to enter
customer at a profit
- Businesses to abandon
- Allocation of resources
MARKETING PHILOSOPHIES
- Expansion or diversification
1. Product-Oriented
- International markets
- Emphasize the product as the single most important part of
- Mergers or joint ventures
the business.
- Avoidance of hostile takeover
- "I have to make this product attractive so people will buy
it. What else should we add?"
- "Pulling Customers"
Vision Statement : What do we want to become?
- “Build a better mousetrap” approach
Mission Statement : What is our business? (basic purpose for setting
- But do the customers understand what makes your mouse
up the business)
trap special ,or do they even know your product?
• The key to a good vision statement is to think of things in a long-
2. Sales-Oriented
term, broad sense, without sounding
- "Let's get these people to buy our product, how do we
generic.
make them do it?"
• Planning must visualize tomorrow. How it should look like, feel like,
- Deemphasizes production efficiencies and customer
smell like, touch like, taste like, and sound like. The clearer the
preferences
picture of our end in mind, the more we know what we have to do
- “Pushing Product”
today.
- Achieving sales goals becomes the firm's highest priority.
Drawing our future on paper is a good way to plan. Put
3. Consumer-Oriented
whatever details you want in the drawing in a very vivid
- "What do people need? What else do they demand? Is
manner.
this product enough to them or should we improve?"
• How large will your organization be?

Anna Mae
 - Everything, including Production and Sales, centers on the
consumer and his or her needs.
- All marketing efforts begin and end with the customers.
- Customer Satisfaction is EVERYTHING.
MARKETING MIX
- A mode, mean or tool used by the entrepreneur to position
the product in the target market segment to efficiently and
effectively deliver it to the consumers and to convince them
about the benefits that they will derive from buying the
product.
PRODUCT
- Product – means the need-satisfying offering of a firm
- Quality – a product’s ability to satisfy a customer’s needs
or requirements.
- Focuses on the customer – and how customer thinks a
product will fit some purpose.
✓ Where the Product is produced
✓ Quality Consistency
✓ Services cannot be stored
✓ Adding services to goods to differentiate
✓ Technology and Intelligent Agents Add Value to Products ✓
Technology integrated into a product
✓ Apps add services to a core product
✓ Augmented reality adds to an experience
✓ Artificial Intelligence anticipates customer needs
Packaging Promotes, Protects, and Enhances
Packaging
- involves promoting, protecting, and enhancing the product.
- Packaging can lower distribution costs
- Greener packaging create value for buyers and sellers
- Laws reduce confusion – Federal Fair Packaging and
- Labelling Act = Laws provide details about how nutrition
facts must be reported on food packages
Warranty Policies Are Part of Strategy Planning
- Warranty – explains that the seller promises about its
product. Warranty puts promises in writing.
- Service guarantees – are becoming more common as a
way to attract, and keep, customers.
- Pizza Hut guarantees 30 minutes or it’s free
PRICE
- Factors affecting product pricing:
• Availability of the competing products Cost of making
the products
• Type of product
• Presence of substitute products
• Stages of the product in the market
• Demographic profile of the target consumers
COST PLUS PRICING – pricing your product at a certain margin
above your costs
VALUE-BASED PRICING – pricing your product as a certain
percentage of the value created by it
COMPETITIVE PRICING – pricing your product as a certain
percentage of the value created by it
Anna Mae
PLACE
- The distribution channel of a business
- How products/services reach the consumer
- Many firms use more than one channel of distribution
- Multichannel distribution – occurs when a producer uses
several competing channels to reach the same target
market-perhaps using several intermediaries in addition to
selling directly.
- First thing you need to take note Assist the entrepreneurs in
identifying the particular homogeneous or niche segment to
serve.
- It is designed to determine the specific customers to serve.
What is the process of segmentation?
- An entrepreneurial marketing strategy designed primarily
to divide the market into small segment with distinct needs,
characteristic, or behavior (Kotler & Armstrong, 2014)

Types of segmentation
DEMOGRAPHIC SEGMENTATION : Statistical data relating to the
population and particular groups within it.
Ø VARIABLES: Gender, Age, Income, Occupation, Education,
Religion, Ethnic Group,Family Size

PSYCHOGRAPHIC SEGMENTATION : How customers think and

PROMOTION
- Refers to the mode of conveying the present and attributes believe
of the products to the target consumers Ø VARIABLES: Needs and Wants, Attitude, Personality traits,
- The business communicates to the target consumers the Knowledge and awareness, Brand Concept, Lifestyle,
pertinent information about the product including its Gender
benefits, price and position in the market. TECHNOGRAPHIC SEGMENTATION : Social Media channels used,
1. Advertising automated software used, type of internet connections used
2. Publicity Ø VARIABLES: Social Media channel, Activities on social
3. Personal Selling media, Internet usage
4. Sales Promotion
5. Direct Marketing PURCHASE BEHAVIOR: Actual consumer buying behavior
Ø VARIABLES: Perceptions, Knowledge, Reactions, Benefits
Basic Promotions Objectives Loyalty, Responses
Ø Informing – is educating Ø
- Can show that it meets consumer needs better than other BRAND PERSONALITY
products can. - Tone & Language of the brand
Ø Persuading – usually becomes necessary Ø Honest/realist
- The firm will try to develop a favorable set of attitudes to Ø Heroic/Anthemic
customers will buy, and keep buying its product. tries to Ø Cheerful
demonstrate how one brand is better than others. Ø Young/Hip
Ø Reminding – may be enough Personification
- Customers who have been attracted and sold once are still - Personality: humanity of the product
targets for competitor’s appeals. - Who symbolizes your brand? What does he/she looks
like?
- Masculine, Feminist
- Friend-centric, family-centric

ADVERTISING OBJECTIVES
- What medium are to be used and for what purpose?
Example: Raise brand awareness through social media Increase
brand loyalty
- INDICATE RATIONALE OR REASON FOR USING SUCH
MEDIUM
EXAMPLE:
ADVERTISING RESEARCH SOCIAL MEDIA Direct Marketing
• Current Situation of brand’s marketing - Instagram - EMAIL -TELEPHONE
• Customer Insights (Market Research) - Facebook
• Current Brand Positioning
ADVERTISING BUDGET
PERCENTAGE OF SALES METHOD:
MARKET SEGMENTATION
- Advertising expense budgeting method based on
- DISTICT NEEDS, CHARACTERISTIC , AND BEHAVIOR allocating a percentage of the anticipated sales
revenue to advertising
Anna Mae