Do you have a new, exciting product? If you do, that’s great, but keep in mind businesses need more than a great product to be successful.
A high percentage of home-based
businesses fail their first year because they didn’t have a market to support their product. Let’s learn about marketing basics Marketing is based on the importance of customers to a business and has two important principles:
All company policies and activities should be
directed toward satisfying their customer wants or needs.
Profitable sales volume is more important than
maximum sales volume. How do I use these principles? Find your customer wants or needs through market research.
Analyze your competitive advantages to develop
a market strategy.
Select specific markets to serve by target
marketing.
Determine how to satisfy customer needs by
identifying a mix of products (market mix) they want. • Refers to the set of actions, or tactics, that a company uses to promote its brand or product in the market.
• The 4Ps make up a typical
marketing mix - Price, Product, Promotion and Place. Marketing Strategy
A marketing strategy identifies target customers
that a particular business can better serve than its competitors, and tailors product offerings, prices, distribution, promotional efforts and services toward those target customers.
The strategy should address unmet customer
needs that offer adequate potential profitability.
A good strategy helps a business focus on
the target markets it can serve best. Target Marketing Owners of small businesses often have limited resources to spend on marketing.
Concentrating their efforts on one or a few key
market segments - target marketing - gets the most return from small investments.
These are two main methods used to segment a
market: Geographical Customer Geographical Segmentation is:
Specializing in serving the
needs of customers in a particular geographical area.
For example, a neighborhood
convenience store may send advertisements only to people living within one-half mile of the store. Customer Segmentation is: Identifying those people most likely to buy the product or service and targeting those groups. Managing the market mix Every marketing program contains four key components: Products and services Promotion Distribution Pricing Products and Services
Product strategies may include:
Concentrating on a narrow product line
Developing a highly specialized product or service
Providing a product-service package containing
unusually high-quality service Promotion Promotion strategies include advertising and direct customer interaction.
Good salesmanship is essential for small businesses
because of their limited ability to spend on advertising.
Good telephone book advertising is important.
Direct mail is an effective, low-cost medium
available to small businesses.
Web presence may be an important and effective
part of a successful strategy Pricing The right price is crucial for maximizing total revenue.
Generally, higher prices mean
lower volume and vice versa.
Small businesses often can
command higher prices because of their personalized service. How to calculate the Selling Price per unit
Sharon would like to sell 500 bottles of its
product-dishwashing liquid, which has a VC of P10. FC is P8,000 and her required profit is P5,000, calculate the selling price per unit How to calculate the Selling Price per unit VC per unit + CM units = selling price per unit
= contribution margin (FC is 8,000+5,000)
= 13,000/units of sales 500 = 26 units CM units = 10 + 26 = 36 selling price = TR (36 x 500=18,000) Distribution The manufacturer and wholesaler must decide how to distribute their products.
Working through established distributors or
manufacturers' agents is generally easiest for small manufacturers.
Small retailers should consider cost and traffic
flow in site selection, especially since advertising and rent can be reciprocal: A low-cost, low-traffic location means spending more on advertising to build traffic. Distribution Cont. Products/services, promotion, pricing and distribution combine into an overall marketing program. The nature of the product or service is also important in citing decisions.
Purchases based on impulse should be in a
high-traffic and visible area. Location is less of a concern for products or services that customers are willing to go out of their way to find. Distribution Cont. The availability of fast shipping and highly segmented mailing lists, developed or purchased from list brokers, magazines or other companies, has enabled certain small businesses to operate from any location, yet serve national or international markets. Marketing Performance
Entrepreneurs must evaluate their
marketing program.
Every program should have performance
standards to compare with actual results. Researching industry norms and past performances will help develop appropriate standards. Entrepreneurs should audit their company's performance at least quarterly. The key questions are: Is the company doing all it can to be customer-oriented?
Do employees ensure the customers are satisfied and
leave wanting to come back?
Can the customer easily find what he or she wants at a
competitive price? Let’s move on to our marketing plan. A sound marketing plan is key to the success of any business. Marketing plans include: Market research Location Customer group you have targeted Competition Positioning Product and service you are: Selling Pricing Advertising Promoting Marketing, planning and promoting
Begin with current information about the
marketplace.
Visit the local library.
Talk to customers.
Look at other businesses’ advertising
strategies.
Consult with relevant industry associations.
Write down your plan Define your business What’s your product or service? Where are you selling your product or service (neighborhood, regional or national)? Who’s your competition? How are you different from the competition? What’s your price? How do your competitor’s market their product? What are your promotion methods? How are you going to distribute your product or where will your business be located? Define your customer Who is your customer? Age Sex Income Neighborhood
How will your customers learn about your product or
service? Advertising Direct mail Word of mouth Yellow Pages Web site Define your plan and budget Know previous marketing methods used to reach your customers.
Know methods that have been effective.
Know cost compared to sales.
Know cost per customer.
Research possible future marketing methods to
attract new customers.
Figure out what percent of profits you can use for
your marketing campaign. Examples of marketing tools Newspaper Magazine Yellow Pages Radio or television advertising Internet Direct mail Telemarketing Public relations activities The final stage in your marketing plan should be your overall promotional objectives:
To communicate your message
To create an awareness of your
product or service
To motivate customers to buy and
increase sales Thank you for listening Tess R. Dimayacyac CBEAM Faculty DLSL There are two main methods to segment a market. Do you know what they are? Click to see the answer.
Geographical and customer
What type of segmentation is the following example? A local pizza place puts fliers in everyone’s mailbox within a one-mile radius of the pizza place.
A. Geographical B. Customer
Click to see the answer.
Which of the following is not one of the key components to a marketing plan? A. Pricing B. Promotion C. Distribution D. Planning
Click to see the answer.
Positioning your product is defined as: A. Pricing your product higher than its competition B. Pricing your product lower than its competition C. Creating a unique, consistent and recognized customer perception about a firm's offering and image D. None of the above