Entrepreneurship Chapter 5 Developing the Right Marketing Mix

Entrepreneurship Chapter 5 Developing the Right Marketing Mix

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. Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 2 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Products (and Services) n Products & services are defined by: n n n Physical attributes Performance characteristics Pricing Branding Delivery Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 3 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Focus the Brand n n n The primary product benefit is “owned” by the company. Ford’s Edsel – lacked focus, too many features failure Ford’s Mustang – tightly focused on target market of 20 -30 year olds success Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 4 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Ways to Build a Great Brand n n n n Provide high-quality products/services Maintain high ethical standards Define the product/service clearly Treat employees well Make ads positive & informative Associate the company with a charity Be involved in the community Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 5 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

What Does the Price Tell Consumers About Your Product/Service? n Strategies: n Keystoning: doubling the costs n Cost plus: cost plus profit margin n Penetration: low price early in PLC to gain market share n Skimming: high price early in PLC before competitors enter market n Meet or beat the competition Mark-ups n Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 6 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Place n Type of business affects the location that works. n n n Who are your customers? Where do they shop? Goal: Find a location affordable for you yet also convenient for customers. Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 7 © 2010 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. Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 8 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Promotional Ideas n n n Advertising specialties Banner ads Billboards Blogs Broadcast media Brochures Business cards Catalogs Coupons Direct mail Directories Flyers Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE n n n 9 Networking Newsletters Print media Promotional clothing Public speaking Samples/demos Special events Sponsorships Telemarketing Toll-free numbers Websites © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Marketing Materials n n n Examples include 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 Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 10 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Media n n n Print Television Radio Web Provide reach & frequency Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 11 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Advertising n n Paid print advertising includes newspapers, magazines, newsletters, & Yellow Pages & other directories. Print advertising components n n n Headline (title) Deck (subhead) Copy (text) Graphics (photos or drawings) Logo Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 12 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Publicity n n n 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 Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 13 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Philanthropy n n Giving money, time, advice, skills to help minimize or eliminate social, environmental, or political problems Foundations are nonprofits that raise funds for charities that assist people, animals, the environment, and other causes. Many philanthropic foundations were started by entrepreneurs. Philanthropy creates goodwill: reputation, name recognition, positive customer relations. Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 14 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Cause-Related Marketing n n n Inspired by commitment to a social, environmental, or political cause Simple way to work philanthropy into your business Examples: 1. 2. 3. Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE Donate fixed % of revenue to charity Donate product/service Encourage employees to volunteer 15 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Marketing as a Fixed Cost n n n Marketing costs are money that is needed to drive sales. Should not be budgeted as a percent of sales Calculate Breakeven Units to determine whether the business is selling enough to cover the marketing costs n Breakeven units = Fixed Costs (per month or per year)/Gross profit per unit Entrepreneurship, 2 nd Edition Mariotti and Glackin with NFTE 16 © 2010 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.