Lesson 5 developing the right marketing mix and plan
1. DEVELOPING THE RIGHT
MARKETING MIX AND PLAN
Entrepreneurship: Starting and Operating a Small
Business by S. Mariotti & C. Glackin
HENTREPLAN
M. Aldana, Faculty SHTM
2. THE 4 MARKETING FACTORS
The 4 Ps of Marketing – Product, Price, Place and Promotion, together
communicate your marketing vision and competitive advantage to your
customer.
If you tweak one, you will have to pay attention to how it will affect the
others.
3. THE 4 MARKETING FACTORS
Product – the product or service should meet or create a customer
need.
The product is the entire bundle, including the packaging. Your
customer may not be consciously aware of your packaging, but that
does not mean it is unimportant.
4. THE 4 MARKETING FACTORS
Price – a product has to be priced low enough so customers will buy it
and high enough for the business to make a profit.
Price should also reflect your marketing vision.
5. THE 4 MARKETING FACTORS
Place – the location you choose to market your product – whether in a
retail storefront, in a customer’s home, on an online store, or from a
cart on the street – must be where customers who will want or need it
shop.
6. THE 4 MARKETING FACTORS
Promotion – is the development of the popularity and sales of a
product or service through advertising, publicity, or other promotional
devices, such as discount coupons or giveaways.
Publicity is notice that is free, advertising is purchased.
8. PRODUCT: WHAT ARE YOU SELLING?
Your business, no matter how humble its beginnings, may have the
potential to grow into a multimillion-dollar company, so it is important
that you think through every step of its development
How you define and refine your product or service will have a
tremendous impact on your ability to grow.
9. PRODUCT
A Product is something that exists in nature or is made by human
industry usually to be sold, whereas a Service is intangible – work skills,
or experience provided in exchange for a fee.
Your product will be defined by its physical attributes (e.g. size, color,
weight, shape, etc.), its performance characteristics (e.g. speed,
strength, efficiency, durability, etc.) and its pricing, branding, and
delivery.
It is the total package that people are buying.
10. FOCUS YOUR BRAND
The key to building a successful brand, is to focus tightly on the primary
benefit you want customers to associate with your business.
11. HOW TO BUILD YOUR BRAND
Choose a business name that is easy to remember, describes your
business, and helps establish mindshare
Mindshare refers to the degree to which your business will come to
mind when a customer needs something your product or service could
provide.
12. HOW TO BUILD YOUR BRAND
Create a logo that symbolizes your business to the customer.
A logo (short for logotype) is an identifying symbol for a product or
business.
A trademark – defined as any word, name, symbol, or device use by a
manufacturer or merchant to distinguish a product.
A company uses a trademark so that people will recognize its product
instantly, without having to read the company name or even having to
think about it. Rights to a trademark are reserved exclusively for its
owners. To infringe on a trademark is illegal.
13. HOW TO BUILD YOUR BRAND
Develop a good reputation.
Make sure your product or service is of the quality you promise.
Always treat your customers well.
You want people to feel good when they think of your brand or hear it
mentioned.
14. HOW TO BUILD YOUR BRAND
Create a brand personality.
Personality will reinforce your name and logo.
15. HOW TO BUILD YOUR BRAND
Communicate your brand personality to your target market.
What type of advertising will best reach your target market?
Where should you put flyers?
Which newspapers, magazines, or blogs does your target market read?
16. BUILDING YOUR BRAND
Always present yourself and your business in such a way that people
will have confidence in your product or service.
Anything that harms your reputation will damage your sales and profits.
Anything that boosts your reputation, on the other hand, will have a
positive impact on your business.
17. BUILDING YOUR BRAND
Toward the end:
Provide a high-quality product or service.
Maintain the highest ethical standards.
Define your product or service clearly. Focus.
Treat your employees well.
Make all your advertisements positive and informative.
Associate your company with a charity.
Become actively involved in your community.
19. PRICING: WHAT IT SAYS ABOUT YOUR
PRODUCT
Consumers tend to infer things about the quality or specialness of a
product or service based on its price. Therefore entrepreneurs should
consider not only the economics but also the psychology of pricing.
Studying the pricing strategies of your competitors will tell you a lot
about the importance of psychological pricing in your market.
20. STRATEGIES AND TACTICS FOR
EFFECTIVE PRICING
Pricing is not a one-size-fits-all proposition. As you define the
marketing strategy for your company, including your target market(s),
competitive advantages, and overall marketing mix, the range of
appropriate pricing strategies emerges.
21. PRICING STRATEGIES
Value Pricing – offering “more for less” strategy that balances quality
and price.
Prestige Pricing – a firm sets high prices on its products or services to
send a message of uniqueness or premium quality.
Cost-plus pricing – you add a desired profit margin to your cost.
Markup pricing – is a cost-plus pricing strategy in which you apply a
predetermined percentage to a product’s cost to obtain its selling price.
22. PRICING STRATEGIES
Value Pricing – offering “more for less” strategy that balances quality
and price.
Prestige Pricing – a firm sets high prices on its products or services to
send a message of uniqueness or premium quality.
Cost-plus Pricing – you add a desired profit margin to your cost.
Markup Pricing – is a cost-plus pricing strategy in which you apply a
predetermined percentage to a product’s cost to obtain its selling price.
23. PRICING STRATEGIES
Penetration Pricing – offers a low price during the early stages of a
product’s life cycle to gain market share.
Skimming Price – seeks to charge high prices during the introductory
stage when the product is novel and has few competitors, to take early
profits, and then to reduce prices to more competitive levels.
Meet-or-beat-the-competition Pricing – constantly matching or
undercutting the prices of your competition.
24. PRICING STRATEGIES
Follow-the-leader Pricing – uses a particular competitor as the model
for pricing.
Personalized Pricing – a dynamic pricing strategy in which the
company charges a premium above the standard or service to certain
customers, who will pay the extra cost.
Variable Pricing – provides different prices for a single product or
service.
Price Lining – the process of creating distinctive pricing levels.
26. PLACE
The type of business your are running will influence your choice of
location and your distribution system for reaching out from that place
to your customers.
For retail, site location is the key to attracting customers. Ideally, you
will want your store or business to be where your target market is. Your
goal is to find a location you can afford that is also convenient for your
potential customers.
27. PLACE
The internet has made it possible for an entrepreneur to start a retail
business out of his/her home and reach customers all over the world.
This has led to the belief that online stores can forgo the expense of
renting a location that caters to foot traffic.
For nonretail businesses, the key to location might be cost or
convenience rather than proximity to the market.
28. KEY FACTORS IN DECIDING ON A
LOCATION
Access for customers
Access to suppliers
Climate and geography
Convenience
Cost of facilities (rent, construction, and the like)
demographics
Economic conditions and business incentives
Governmental regulations, laws, including environmental impact
Labor pool
Proximity to competitors
Visibility
30. PROMOTION
Promotion is the use of advertising and publicity to get your marketing
message to your customers.
31. INTEGRATED MARKETING
COMMUNICATIONS
Marketing communications promotes your business to your current
and prospective customers and to those who influence purchasing and
sales decisions.
All communications include an originator (source), a specific message
(overt and/or subliminal), a channel for dissemination, and a target
(receiver).
By integrating your communications across platforms and media, you
can maximize the impact of your communications resources, primarily
as expended for promotion.
32. ADVERTISING
Advertising has specific objectives that make it an integral component
of the marketing mix.
Advertising aids the marketing effort by creating brand awareness and
reinforcing the purchasing decision.
Objectives of advertising:
Building brand and image
Providing information
Persuading
Stimulating action
Reinforcing the purchasing decision
33. TYPES OF ADVERTISING
Two primary categories:
Institutional Advertising – provides information about an organization,
rather than a specific product, and is intended to create awareness about a
firm and enhance its image.
Product Advertising – is designed to create awareness, interest,
purchasing behavior, and post-purchase satisfaction for specific products
and services.
34. PROS AND CONS OF ADVERTISING
MEDIA - TELEVISION
Pros
Low CPM
Highly targeted with cable
High intrusion value
High reach and frequency potential
Message is immediate
Cons
High cost for ad campaign
Clutter
Short life of advertising message
High production costs
Long lead time
35. PROS AND CONS OF ADVERTISING
MEDIA - RADIO
Pros
Relatively low cost
Short-term commitment
Short lead time
Message is immediate
Promotes recall
Mobility (radios travel with people)
Cons
Auditory only
Clutter – information overload
Short life of advertising message
Low attention
Local nature
36. PROS AND CONS OF ADVERTISING
MEDIA - NEWSPAPERS
Pros
Geographic targeting
Short lead time
Flexibility and credibility
More copy potential
Direct response possible
Cons
Expense may be high
Demographic targeting is limited
Short shelf life
Declining readership
Waste
Poor-quality production
37. PROS AND CONS OF ADVERTISING
MEDIA - MAGAZINES
Pros
Targeted reader interest
High color/production quality
Direct response possible
Long shelf life
Cons
Lack of immediacy
Exposure dispersed over time
Longer lead times
High costs
38. PROS AND CONS OF ADVERTISING
MEDIA - INTERNET
Pros
Targeting potential
Moderate cost
Global reach
Relatively short lead time
Cons
Not ubiquitous
Banner ads feed-click through to full
ads
39. PROS AND CONS OF ADVERTISING
MEDIA – OUTDOOR MEDIA
Pros
Repeat exposures
Geographic selectivity
Moderate CPM
High-impact dramatic ads possible
Cons
Limited message size
Limited demographic selectivity
Initial design and production cost
Short exposure time
40. SALES PROMOTION
Various efforts to increase sales volume by specified levels, which either
reward purchases or provide discounts.
Sales-promotion solutions do not have to be complex or sophisticated
to work. It is best if they are simple and easily understood.
41. SALES PROMOTION TOOLS
Advertising Specialties – pens, calculators, watches, calendars, etc.
Trade show exhibits
Mall carts of kiosks
44. BUZZ MARKETING
Is another name for word-of-mouth marketing.
It can occur naturally (organic buzz marketing) or can be jump-started
by the organization (amplified buzz marketing).
45. PRODUCT PLACEMENT / BRANDED
ENTERTAINMENT
The use of television, movies and other scenarios as promotional tool.
47. IN-STORE MARKETING
Can be done in your own space or in businesses where your product is
sold.
Samples and demonstrations
Edutainment – a promotion that combines education and entertainment
to make a more lasting impression upon an audience.
Point-of-purchase and shelf placement
48. OTHER MEDIA VENUES
E-commerce – having an electronic storefront
Interactive Marketing – addressing customers, absorbing their input,
and reaching out to them.
E-active Marketing - When two major components of internet
marketing – e-commerce and interactive marketing combine.
Online Advertising – banner advertisements on websites
Brand Spiraling – integrating a company’s conventional offline
branding strategy with its internet strategy to drive traffic to its online
sites.
49. OTHER MEDIA VENUES
Blogs – short for web log, is a journal that appears on the internet
periodically and is intended for the public.
Online Social Networks
Stealth marketing – undercover or deceptive marketing efforts that are
intended to appear as if they happened naturally
Consumer generated advertising – a campaign in which companies
solicits advertisements from customers
Viral marketing – the process of promoting a brand, product, or
service through an existing social network, where a message is passed
from one individual to another.
51. GENERATING PUBLICITY
Publicity, or Public Relations (PR) is defined as the “planned and
sustained effort to establish and maintain goodwill and mutual
understanding between and organization and its public.”
Publicity is important for a small business, which often has a negligible
advertising budget.
52. GENERATING PUBLICITY
To get publicity, you will need to email or fax a pitch letter and a press
release to the magazine, newspaper, TV station, or radio station you
hope to interest.
A Pitch Letter sells the story. It tells the person reading it why he or she
interested in your business.
A Press Release is an announcement sent to the media to generate
publicity and states the “who, what, when, where, and why” of a story.
54. PHILANTHROPY
Philanthropy is a concern for human and social welfare that is
expressed by giving money through charities and foundation.
55. FOUNDATION / NOT-FOR-PROFIT
ORGANIZATION
A foundation is a not-for-profit organization that manages donated
funds, which it distributes through grants to individuals or to other
non-profit organizations that help people and social causes.
