Entrepreneurship Chapter 4 Developing the Right Marketing Mix

Marketing Mix = the 4 Ps 1. 2. 3. 4. Product Price Place Promotion

What Does the Price Tell Consumers About Your Product/Service? n Strategies: n n Marriotti:

Place n n Who are your customers? Where do they shop? Goal: Find location

Promotion n Using advertising + publicity to get your market message to your customers

Promotional Ideas n n n n Banner ads Billboards Brochures Business cards Direct mail

Intellectual Property n Logos—protected by trademarking n Inventions—protected by patents n Art—protected by copyrights

Marketing Materials n n n Examples: brochures, posters, order forms, business cards, invoices Should

Media n n n Print + Television + Radio = Media Use media to

Philanthropy n n Giving money, time, advice, skills to help solve social or environmental

Cause-Related Marketing n n n Inspired by commitment to a cause Simple way to

Nonprofit Organizations n n n Businesses whose mission is to contribute to greater good

Relationship Marketing n n n Focus on establishing long-term relationships with customers. Making the

Fixed Costs Marketing is a fixed costs, meaning it does not fluctuate (change) with

Breakeven Analysis Q: Can you afford your marketing plan? A: Calculate breakeven point. Breakeven

Calculating Breakeven Units Breakeven units = Fixed Costs (per month or per year)/Gross profit

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Marketing Mix = the 4 Ps 1. 2. 3. 4. Product Price Place 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? n Strategies: n n Marriotti: Entrepreneurship 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 © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Place n n Who are your customers? Where do they shop? Goal: Find location affordable for you yet also convenient for customers. Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Promotion n 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. Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Promotional Ideas n n n n Banner ads Billboards Brochures Business cards Direct mail Catalogs Discount coupons n n n n Marriotti: Entrepreneurship Flyers Gifts Clothing bearing logo Samples/demos Special events Team sponsorships 800 numbers © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Logos and Trademarks n n n 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 Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Intellectual Property n Logos—protected by trademarking n Inventions—protected by patents n Art—protected by copyrights n Online intellectual property—protected by electronic rights (1998 Digital Millennium Copyright Act) Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Marketing Materials n n n 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 Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Media n n n 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 Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Philanthropy n n 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 Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Cause-Related Marketing n n n 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 Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Nonprofit Organizations n n n 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 Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

Relationship Marketing n n n 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). Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

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 Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

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. Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.

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. Marriotti: Entrepreneurship © 2007 Pearson Education. Upper Saddle River, NJ, 07458. All Rights Reserved.