Entrepreneurship and Small Business Management Chapter 7 Developing
Entrepreneurship and Small Business Management Chapter 7 Developing the Right Marketing Mix and Plan
Ch. 7 Performance Objectives n n Combine the four Ps—product, price, place, and promotion—into a marketing mix. Choose the attributes of your product or service. Determine the mix of promotion to use for your business. Find a way to add the fifth P, philanthropy, to your business. Entrepreneurship and Small Business Management, 1/e 2 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Ch. 7 Performance Objectives (continued) n n n Understand the importance of a marketing plan. Identify the critical components of a marketing plan. Use breakeven analysis to evaluate your marketing plan. Entrepreneurship and Small Business Management, 1/e 3 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Marketing Mix: The Four Ps n n Product—What are you selling? Price—What does the price “say” about your product? Place—What is the best location for your business? Promotion—How will you advertise and publicize your product? Entrepreneurship and Small Business Management, 1/e 4 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Create Your Product Concept n Products are defined by: n n n Physical attributes Performance characteristics Pricing Branding Delivery Key to successful branding: focus on the product’s primary benefit Entrepreneurship and Small Business Management, 1/e 5 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Establish Your Brand n n Choose an easy-to-remember name that describes your business. Design a logo that symbolizes your business. Develop a good reputation. Create a brand “personality” and communicate it to your target market. Entrepreneurship and Small Business Management, 1/e 6 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Build Your Brand’s Reputation n n n Provide a high-quality product/service. Maintain high ethical standards. Define the product/service clearly. Treat employees well. Make ads positive and informative. Associate the company with a charity. Be involved in the community. Entrepreneurship and Small Business Management, 1/e 7 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Price Considerations n n Simply undercutting competitors’ prices will not necessarily win you the largest market share. Consider the psychology of pricing: consumers tend to infer things about a product/service based on its price. Entrepreneurship and Small Business Management, 1/e 8 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Place n The type of business affects the location that works best. n n n Who are your customers? Where do they shop? Goal: Find a location affordable for you, yet also convenient for customers. Entrepreneurship and Small Business Management, 1/e 9 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Promotion n Promotion—use of advertising and publicity to get your marketing message to your customers. Advertising—purchased promotion (billboards, TV ads, magazine ads, etc. ) Publicity—free mention of a company, person, or product/service in the media Entrepreneurship and Small Business Management, 1/e 10 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Promotion Methods n n n Advertising specialties Banner ads Billboards Blogs Broadcast media Brochures Business cards Catalogs Coupons Direct mail Directories Flyers Entrepreneurship and Small Business Management, 1/e n n n 11 Networking Newsletters Print media Promotional clothing Public speaking Samples/demos Special events Sponsorships Telemarketing Toll-free numbers Web sites © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Philanthropy: The Fifth P n n n Philanthropy—a concern for human and social welfare, expressed by giving money through charities/foundations Foundation—not-for-profit organization that manages funds donated to help people and social causes Philanthropy creates goodwill— favorable reputation, name recognition, and positive customer relations Entrepreneurship and Small Business Management, 1/e 12 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Cause-Related Marketing n n n Inspired by a commitment to a social, environmental, or political cause Simple way to work philanthropy into your business Examples: n n n Donate fixed % of revenue to charity Donate products/services Encourage employees to volunteer Entrepreneurship and Small Business Management, 1/e 13 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Roles of a Marketing Plan n n n Convince skeptical investors that your plan has merit. Use and disclose market studies. Identify the target market. Evaluate the competition. Demonstrate the pricing strategy. Detail the advertising plan. Entrepreneurship and Small Business Management, 1/e 14 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Marketing Plan Components Stand-Alone Bus. Plan Section Opportunity Analysis: X • Industry Analysis X • SWOT Analysis X • Environmental Analysis X • Competitive Analysis X Entrepreneurship and Small Business Management, 1/e 15 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Marketing Plan Components Stand-Alone Bus. Plan Section Marketing Analysis: X X • Overall Market and Target X X • Goals and Objectives X X • Marketing Strategy X X Product/Service X X Pricing Strategy X X Promotion Strategy/Plan X X Place/Distribution X X Philanthropic Plan X X Entrepreneurship and Small Business Management, 1/e 16 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Marketing Plan Components Stand-Alone Bus. Plan Section Marketing Analysis (continued): • Future and Contingency Plans X X Financial Projections X Implementation Time Line X Measurement X Supplemental Materials X Entrepreneurship and Small Business Management, 1/e 17 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
Can You Afford Your Marketing Plan? n n Marketing is part of your business’s fixed costs and should not be budgeted as a percent of sales. Calculate breakeven units to determine if the business can cover marketing costs with the number of units you expect to sell. n Breakeven units = Fixed cost (per month or per year) divided by gross profit per unit Entrepreneurship and Small Business Management, 1/e 18 © 2012 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.
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