Unique Marketing Issue PDF

UNIQUE MARKETING ISSUE OBJECTIVES Explain the three steps (segmenting the market, selecting a target market, and establishing a unique market position) entrepreneurial firms use to identify their customers. Define a brand and explain why it is important to an entrepreneurial firm’s mark...

UNIQUE MARKETING ISSUE OBJECTIVES Explain the three steps (segmenting the market, selecting a target market, and establishing a unique market position) entrepreneurial firms use to identify their customers. Define a brand and explain why it is important to an entrepreneurial firm’s marketing efforts. Identify and explain the 4Ps of marketing activities (product, price, promotion, and place) used by entrepreneurial firms. Describe the seven-step sales process an entrepreneurial firm uses toidentify prospects and close sales.  MARKET SEGMENTATION AND ESTABLISHING A UNIQUE MARKET Selecting a Market POSITION and Establishing a Position Firm must know who its target market is (customers) and how to reach them. It is important that a firm chooses its target market first as other marketing choices such as distribution practices depend on these choices a firm makes in its initial stages of development. A firm uses these steps to help them  A firm must perform market segmentation. This when they study the industry in which the firm intends to compete in and determine the potential target markets in that industry. This is important because as an infant firm, resources are more limited than when more developed. Markets can be segmented in: Geography (city, state, country) Demographic variables (age, gender, family size, income) Psychographic variables (personality, lifestyle, values) Behavioural variables (product usage rates, brand loyalty, benefits consumers seek from using the product) Product type To test whether a firm’s choice of market segmentation is successful, these requirements must be considered: -Homogeneity of needs and wants appears within the segment -Heterogeneity of needs and wants appears between the segments -Differences within the segment should be small compared to differences across segments Despite the fact that market segmentation is an essential step for entrepreneurs, it is commonly given a lack of importance. By overlooking market segmentation, problems may arise when assessing the size of a potential market for a new product or service Selecting a Target Market: What specific group of customers have I decided to target? Most firms target a niche market. This is a place within a market segment that represents a narrow group of customers with similar interests. A firm normally does not target an entire segment of a market because many market segments are too large to target successfully. A firm’s choice of target markets must be synchronized with its business model and the skills of its founders and other employees. A firm must always keep an eye on its target market as societal preferences and attractiveness may change which may cause a loss. Crafting a Unique Market: What position will my firm occupy in the minds of my customer (and potential customers) that will differentiate it from all of my competitors? It is important a firm establishes its “position” where it can differentiate itself from its competitors. Position is concerned with how the firm is situated relative to competitors. A firm’s market position is defined by its products or services. When a firm defines its position, it is strategically establishing what it occupies and who it competes with in a market and it is highly based on its mission, its overall approach to the market place and its competitive landscape.  BRAND A brand is a set of attributes (positive/ negative) that people associate with the company. The customer loyalty a company creates through its brand is one of its most valuable assets. Companies monitor the integrity of their brands through brand management. This is a practice used to protect the reputation and value of an organisation’s brand in consumers’ minds. www.reallygreatsite.com  Brands are built through a number of techniques including advertising, public relations, sponsorships, support of social causes, social media, and good performance. It is important for new companies to create a good image immediately to gain credibility when approaching potential consumers. Most experts say that word of mouth is the best way to build a firm’s brand rather than advertisement. This may lead to capturing the attention of the media, thus creating a buzz which means creating awareness and a sense of anticipation about a company and its offerings. A strong brand can be a very powerful asset for a firm as over 50% of consumers say that a known and trusted brand is a reason to buy a product. Brand equity refers to the set of assets and liabilities that are linked to a brand and enable it to raise a firm’s valuation. (practically paying for a brand e.g. Louis Vuitton Brand equity can be grouped into 5 categories: Brand Loyalty Name recognition Received quality (of a firm’s products and services) Brand associations in addition to quality (e.g. good service) Other proprietary assets such as patents, trademarks, and high quality partnerships. Co-branding is when 2 companies form a partnership and combine their brands (Sony-Ericsson). The objective of doing this is to combine the strengths of the brands.  THE 4PS OF MARKETING FOR NEW VENTURES Once a company has decided its target market, positioned and branded itself, it is ready to begin planning the details of its marketing mix. A firm’s marketing mix is a set of controllable, tactical marketing tools that it uses to produce the response it wants in the target market. The marketing mix can be organised in 4 categories also known as the 4Ps: Product Price Promotion Place (distribution)  PROD UCT A firm’s product is the good or service it offers to its target market. In a firm’s marketing mix, both ‘product’ and ‘service’ are categorised under Product. The most important attribute of a product is that it adds value in the minds of its target consumers. Core product vs. Actual product: An ‘actual product' includes the quality level, features, design, brand name and packaging e.g. Chocolate bar vs. Marabou chocolate bar.  A reference account is an early user of a firm’s product who is willing to give a testimonial regarding his or her experience with the product. This practice is commonly used by start-up firms. A firm can offer testimonials by offering their products for free or at a reduced price in exchange for the consumers’ willingness to try the product and provide feedback. e.g. Hallon giving out phone deals for a cheaper price for a few months. A reference account can provide positive endorsements thus encouraging such advantages: Credibility with peers Non-company advocates who are willing to talk to the press Quotes are examples to use in company brochures and advertisers  PRI CE Price is the amount of money consumers are willing to pay to buy a product. It is the only element in the marketing mix that provides revenue as all the other elements represent costs. Price ultimately determines how much money a company can earn. The price a company charges sends a clear message to its take market. E.g. When Michael kors began lowering their price the target market switched from high-class consumers to middle class Companies use cost based pricing or value based pricing when determining the price of their products. Cost based pricing is when the markup percentage of a products’ cost is added up. Value based pricing is when what consumers are willing to pay for a product is estimated and then lowering the price to create a safety net.  Most consumers make a price-quality attribution when looking at the price of a product. This means that consumers naturally assume that the higher price product is also the better quality product. If a firm charges a low price for its products it sends a signal to its consumers that the product is of low quality (low production costs) regardless of what it is. The price a company is able to charge is largely dependent on: -The objective quality of a product or service -The perception of value that is created in the mind of consumers relative to competing products in the market place  PROMOT ION Promotion refers to the activities the firm takes to communicate the merits of its product to its target market. The goal of of promotion is to persuade people to buy the product. Some common forms of promotion companies use are: Advertising: making people aware of a product in hopes of persuading them to buy it. Its goals are to: Raise customer awareness Explain a product’s comparative features and benefits Create associations between product and a certain lifestyle Forms of advertisement are direct mail, magazines, newspapers, radio, internet, blogs,television, billboards etc. Disadvantages of advertising: Low credibility The possibility that a high percentage of the people who see the ad will not be interested Message clutter (after hearing the advertisement many times people don’t listen anymore) Relative costliness compared to other forms of promotions The perception that advertising is intrusive Start-up firms tend to be very frugal when it comes to advertising due to these weaknesses. Infant businesses tend to engage in hybrid promotional campaigns that aim to promote a product rather than advertise. These promotional campaigns can be pay per click services via Google, yahoo etc.  Promotions and advertising through social media has gained a lot of popularity as well. The advantage of using social media such as facebook is that it allows companies to deliver ads to specific target markets based on location and the information people register into facebook. Public relations refers to efforts to establish and maintain a company’s image with the public. Public relations vs advertising The cost of public relations is the efforts to network with journalists/ blog authors to write good reviews about the company products/ services. —> infant companies prefer public relations over advertising because it is cheaper —> reviews by journalists/ magazines are viewed as a third party voice about the company and may be looked at as a more trustworthy voice than advertisements which are self proclaimed statements by the company itself New firms use these techniques to gain recognition: Press kit: a folder that contains background information about the company and Trade show: an event at which the goods or services in a specific industry are exhibited and demonstrated. Social media: Blogging, staying public online and connecting with customers s another way start up firms stay relevant Other promotion-related activities —> free samples —> free trials (e.g. 3 month subscription) —> viral marketing (encouraging people to pass along a marketing message about a product e.g. taglines) —>guerrilla marketing (advertising products in unconventional and memorable ways  PLACE (DISTRIBUTION) Place includes all the activities involved in getting a product to the consumer. A distribution channel refers to the route a product takes from its production site to consumer. —> Selling direct Lots of firms sell directly to customers. Disintermediation: the process of eliminating subordinates and middlemen such as distributors and wholesalers in order to sell directly THE SEVEN STEPS SALE Sale process PROCESS encompasses the steps a firm goes through to identify prospects and close sales. www.reallygreatsite.com Fauget company THANK YOU