Entrepreneurship: Developing The Right Marketing Mix

Entrepreneurship
Chapter 4
Developing the Right Marketing Mix
Mariotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.
Marketing Mix = the 4 Ps
1. Product
2. Price
3. Place
4. Promotion
Goal: Bring the right product to the

right place at the right price with the
right promotion.
Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.
What Does the Price Tell Consumers
About Your Product/Service?
 Strategies:
 Cost plus: cost plus profit margin
 Penetration: low price early in PLC
to gain market share
 Skimming: high price early in PLC
before competitors enter market
 Meet or beat the competition
Place
 Who are your customers? Where do
they shop?
 Goal: Find location affordable for you

yet also convenient for customers.
Promotion
 Using advertising + publicity to get
your market message to your
customers
 Advertising (purchased): billboards,
TV ads, magazine ads
 Publicity (free): mentions in media
such as articles, stories on TV, etc.
Promotional Ideas
 Banner ads  Flyers
 Billboards  Gifts
 Brochures  Clothing bearing
 Business cards logo
 Direct mail  Samples/demos
 Catalogs  Special events
 Discount coupons  Team sponsorships
 800 numbers
Logos and Trademarks
 Logo: identifying symbol for product/service
or business.
 Trademark: logo registered with U.S. Patent

Office; may not be infringed upon
 Infringement: illegal use of someone’s

intellectual property
Intellectual Property
 Logos—protected by trademarking
 Inventions—protected by patents
 Art—protected by copyrights
 Online intellectual property—protected by

electronic rights (1998 Digital Millennium
Copyright Act)
Marketing Materials
 Examples: brochures, posters, order
forms, business cards, invoices
 Should reinforce competitive advantage
 Serve 3 functions
1. Help you organize your thinking
2. Enable you to teach others in company
about the business
3. Enable you to sell product/service
Media
 Print + Television + Radio = Media
 Use media to generate publicity
 Mail/fax pitch letter and press release
 Pitch letter “pitches” the story of your
business
 Press release provides facts to answer:
who, what, when,where, why, how?
 Follow up with phone call
Philanthropy
 Giving money, time, advice, skills to help solve social
or environmental problems
 Foundations: nonprofits that collect donations for
charities that help people, animals, environment. Ex:
Habitat for Humanity
 Many philanthropic foundations were started by
entrepreneurs. Ex: Bill and Melinda Gates Foundation
 Philanthropy creates goodwill: reputation, name
recognition, positive customer relations
Cause-Related Marketing
 Inspired by commitment to a cause
 Simple way to work philanthropy into
your business
 Examples:
1. Donate fixed % of revenue to charity
2. Donate product/service
3. Encourage employees to volunteer
Nonprofit Organizations
 Businesses whose mission is to
contribute to greater good of society
 Classified by IRS as 501 (c ) (3)
corporations
 Tax exempt—do not pay federal or
state taxes; profits must be used for
mission
Relationship Marketing
 Focus on establishing long-term
relationships with customers.
 Making the sale is just the beginning of the

relationship with the customer.
 More profitable strategy than transaction-

oriented marketing (which focuses on
making the sale).
Fixed Costs
Marketing is a fixed costs, meaning it does
not fluctuate (change) with sales.
Fixed costs (USAIIRD):
 Utilities
 Salaries
 Advertising
 Insurance
 Interest
 Rent
 Depreciation
Breakeven Analysis
Q: Can you afford your marketing plan?
A: Calculate breakeven point.
Breakeven point: business is selling
enough units to cover fixed costs.
If business is not breaking even, you can’t

afford your marketing plan.
Calculating Breakeven Units
Breakeven units = Fixed Costs (per month or

per year)/Gross profit per unit
$180 fixed costs (per month)/$6 gross profit

per unit = 30 units.
This business must sell 30 units per month to

cover its fixed costs.

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Entrepreneurship

Goal: Bring the right product to the

 Goal: Find location affordable for you

 Trademark: logo registered with U.S. Patent

 Infringement: illegal use of someone’s

 Online intellectual property—protected by

 Making the sale is just the beginning of the

 More profitable strategy than transaction-

If business is not breaking even, you can’t

Breakeven units = Fixed Costs (per month or

$180 fixed costs (per month)/$6 gross profit

This business must sell 30 units per month to

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