Unit 10 Marketing Issues PDF

ENTREPRENEURSHIP: BUS 403 Unit 10: Unique Marketing Issues  Objectives 1. Explain the three steps (segmenting the market, selecting a target market, and establishing a unique marketing position) entrepreneurial firms use to identify their customers. 2. Define a brand a...

ENTREPRENEURSHIP: BUS 403 Unit 10: Unique Marketing Issues  Objectives 1. Explain the three steps (segmenting the market, selecting a target market, and establishing a unique marketing position) entrepreneurial firms use to identify their customers. 2. Define a brand and explain why it is important to an entrepreneurial firm’s marketing efforts. 3. Identify and explain the 4Ps of marketing activities (product, price, promotion, and place) used by entrepreneurial firms. 4. Describe the seven-step sales process an entrepreneurial firm uses to identify prospects and close sales. Selecting a Market and Establishing a Position in the Market  Important Questions That All Start-ups Must Ask  In order to succeed, a new firm must address this important issue: Who are our customers and how will we appeal to them? A well-managed start-up approaches this query by following a three-step process:  Segmenting the market.  Selecting a target market.  Establishing a unique position. The Process of Selecting a Target Market and Positioning Strategy Market Segmentation 11-5 Copyright ©2016 Pearson Education, Inc. Involves studying a firm’s industry and determining the different target markets in that industry. Segmenting the Market Markets can be segmented in a number of different ways, including: - Product type. - Geography (city, state, region). - Demographic variables. Example: Segmenting the Dance Studio Market by Customers Served 11-6 Professional Dancing Adult Dancing Youth Dancing Serious Ballroom and other Ballet and other types of dancers who aspire types of dancing dancing for young girls to make a living for adults who want who want to learn to dancing in Broadway to learn dance for dance to develop poise plays. recreation and fun. and grace. Selecting a Target Market 11-7 Copyright ©2016 Pearson Education, Inc. Once a firm has segmented the market, a target market must be chosen. The market must be sufficiently Target Market attractive and the firm must have the capability to serve it. By focusing on a clearly defined market, a firm can become an expert in that market and then be able to provide customers a high level of service. Establishing a Unique Position 1 of 2 11-8 Copyright ©2016 Pearson Education, Inc. After selecting a target market, the firm’s next step is to establish a “position” within the market that Positioning differentiates it from its rivals. A “position” is the part of a market that the firm is claiming as its own. A firm establishes a unique position in its customers’ minds by drawing attention to two or three of the product’s attributes. Establishing a Unique Position 2 of 2 11-9 Copyright ©2016 Pearson Education, Inc.  Firms often develop a “tagline” to reinforce their position in their market, or a phrase that is used consistently in a company’s literature and thus becomes associated with the company.  An example is Nike’s familiar tagline, “Just do it.”  The beauty of this simple three-word expression is that it applies equally to a 21-year-old triathlete and a 65-year- old mall walker. Taglines—Developed to Reinforce a Firm’s Positioning Strategy 11-10 Copyright ©2016 Pearson Education, Inc. What’s a Brand? 11-11 Establishing a Brand 11-12  A brand is the set of attributes—positive or negative—that people associate with a company.  These attributes can be positive, such as trustworthy, dependable, or easy to deal with.  Or they can be negative, such as cheap, unreliable, or difficult to deal with.  The customer loyalty a company creates through its brand is one of its most valuable assets. Establishing a Brand 11-13 A firm must have meaning in its customers’ lives. It must create value—something for which customers are willing to pay.  On a more practical level, brands are built through a number of techniques, including advertising, public relations, sponsorships, support of social causes, and good performance.  A firm’s name, logo, Web site design, Facebook page, and even its letterhead are part of its brand. Power of a Strong Brand 11-14  A strong brand can be a very powerful asset for a firm.  Over 50% of consumers say that a known and trusted brand is a reason to buy a product. A brand allows a company to charge a price for its products or services that is consistent with its image. A successful brand can increase the market value of a company by 50% to 75%. The Four Ps of Marketing for New Ventures 11-15 Product Price Marketing Mix Promotion Place (or distribution) Product 11-16 Copyright ©2016 Pearson Education, Inc.  The good or service a firm offers to its target market.  The initial rollout is one of the most critical times in the marketing of a new product.  All firms face the challenge that they are unknown and that it takes a leap of faith for the first customers to buy their products.  Some start-ups meet this challenge by using reference accounts.  A reference account is an early user of a firm’s products who is willing to give a testimonial regarding his or her experience with the produce. Core Product vs. Actual Product 11-17 Copyright ©2016 Pearson Education, Inc. Core Product Actual Product The product itself, such The product plus all the as an antivirus software attributes that come with program. it such as quality level, features, design, packaging, and warranty. Price 11-18  The amount of money consumers pay to buy a Copyright ©2016 Pearson Education, Inc. product.  The price a company charges for its products sends an important message to its target market.  For example, Oakley positions its sunglasses as innovative, state-of-the-art products that are both high quality and visually appealing.  This position in the market suggests a premium price that Oakley charges.  Most entrepreneurs use one of two methods to set the price for their products: cost-based or value- based pricing. Core Product vs. Actual Product 11-19 Copyright ©2016 Pearson Education, Inc. Cost-Based Pricing Value-Based Pricing The list price is The list price is determined by adding a determined by estimating markup percentage to a what consumers are product’s cost. willing to pay for a product. Promotion 11-20 Copyright ©2016 Pearson Education, Inc.  Promotion  Refersto the activities the firm takes to communicate the merits of its product to its target market.  There are several common activities that entrepreneurs use to promote their products and services.  Advertising  Advertising is making people aware of a product or service in hopes of persuading them to buy it.  Advertising 11-21 Advantages Copyright ©2016 Pearson Education, Inc. Raise customer awareness of a product. Explain a product’s comparative features and benefits. Create associations between a product and a certain lifestyle. Disadvantages Low credibility. The possibility that a high percentage of people who see the ad will not be interested. Message clutter. Relative costliness compared to other forms of promotion. Intrusiveness. Steps Involved in Putting Together an Advertisement 11-22 Copyright ©2016 Pearson Education, Inc. Google AdWords and AdSense Program 1 of 2 11-23 Copyright ©2016 Pearson Education, Inc.  AdWords  Allows advertisers to buy keywords on the Google home page.  Triggers text-based ads to the side of (and sometimes above) search results when the keyword is used.  The program includes local, national, and international distribution.  Advertisers pay a certain amount per click.  Advertisers benefit because they are able to place their ads in front of people who are already searching for information about their product. Google AdWords and AdSense Program 2 of 2 11-24 Copyright ©2016 Pearson Education, Inc.  AdSense  Allows advertisers to buy ads that will be shown on other Web sites instead of Google’s home page.  Google selects sites of interest to the advertiser’s customers.  Advertisers are charged on a pay-per-click or a per- thousand impression basis.  Advertisers benefit because the content of the ad is often relevant to the Web site.  Web site owners benefit by using the service to monetize their Web site. Public Relations 11-25  Public Relations Copyright ©2016 Pearson Education, Inc.  One of the most cost effective ways to increase the awareness of the products of a company is through public relations.  Publicrelations refer to efforts to establish and maintain a company’s image with the public.  The major difference between public relations and advertising is that public relations is not paid for— directly. Public Relations Techniques 11-26 Traditional media Press release coverage Social media Articles in industry coverage press and periodicals Blogging Monthly newsletter Civic, social, and community involvement Social Media 11-27  Social Media Copyright ©2016 Pearson Education, Inc.  Consists primarily of blogging and connecting with customers and others through social networking sites like Facebook and Twitter.  Blogging  The idea behind blogs is that they familiarize people with a business and help build an emotional bond between a business and its customers.  Facebook and Twitter  Businessesestablish a presence on Facebook and Twitter to build a community around their products and services. Other Promotions Techniques 11-28 Copyright ©2016 Pearson Education, Inc. Viral Marketing Guerrilla Marketing Facilitates and A low-budget approach to encourages people to marketing that relies on pass along a marketing ingenuity, cleverness, message about a and surprise rather than particular product or traditional techniques. service. Place (or Distribution) 11-29 Copyright ©2016 Pearson Education, Inc.  Place  Encompasses all the activities that move a firm’s product from its place of origin to the consumer.  The first choice a firm has to make regarding distribution is whether to sell its products directly to consumers or through intermediaries (such as wholesalers and retailers).  Within most industries, both choices are available, so the decision typically depends on how a firm believes its target market wants to buy its product. Selling Direct Vs. Selling Through an Intermediary 11-30 1o Copyright ©2016 Pearson Education, Inc. Approach to Description Distribution Selling Many firms sell direct to the customer, maintaining control Direct of the distribution and sales process. Selling Through Other firms sell through intermediaries and pass off their Intermediaries products to wholesalers who place them in retail outlets to be sold. Selling Direct Vs. Selling Through an Intermediary 11-31 2 of 2 Copyright ©2016 Pearson Education, Inc. Sales Process 1 of 3 11-32 Copyright ©2016 Pearson Education, Inc.  Sales Process  A firm’s sales process (or sales funnel) depicts the steps it goes through to identify prospects and close sales.  A formal sales process involves a number of identifiable steps.  Importance of Process  Some companies simply wing it when it comes to sales, which isn’t recommended.  It’s much better to have a well thought-out approach to prospecting customers and closing sales.  Copyright ©2016 Pearson Education, Inc. 11-33 Sales Process 2 of 3 Sales Process 3 of 3 11-34  Usefulness of Sales Process  Mapping the sales process in the manner shown on the previous slide provides a standard method for a firm’s employees to use, and provides a starting point for careful analysis and continuous improvement.  Often, when companies lose an important sale they’ll find that an important step in the sales process was missed or mishandled.  Having a well thought-out sales process, along with appropriate follow-through, can dramatically improve a company’s sales performance. Questions?