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MT209 Small Business Management Unit 4 – Marketing the Business Charles A. Fail, PhD It Is Not That We Aim Too High And Miss It………. But That We Aim Too Low And We Reach It” Michelangelo Contact Information • Email: [email protected] • AIM: charlesfail • Phone: 770-926-3960 • Cell: 770-366-5480 (No Text Messages) • Office Hours: Wed. 7-8 PM Thurs. 8-9 PM Eastern • Kaplan Technical Support: 1-866-522-7747 (For all computer related issues) Marketing the Business No matter how great the business idea or product, without adequate marketing the business will not succeed! Effective marketing is about so much more than just advertising or selling. Marketing may be best described as all activities within a business that work together to deliver “bundles of value” for the customer. In Unit 4, we examine the marketing function and how it must be centered on the customer. Marketing Words of Wisdom by Philip Kotler “The future isn’t ahead of us. It has already happened” (Kotler, 2000, p. 1). “It is no longer enough to satisfy customers. You must delight them” (Kotler, 2000, p.33). “It is more important to do what is strategically right than what is immediately profitable” (Kotler, 2000 p. 63). “Marketing is becoming more of a battle based on information than one based on sales power” (Kotler, 2000, p. 99). Marketing Words of Wisdom by Philip Kotler “Today you have to run faster to stay in the same place” (Kotler, 2000, p. 135). “The most important thing is to forecast where customers are moving, and to be in front of them” (Kotler, 2000, p. 159). “Poor firms ignore their competitors; average firms copy their competitors, winning firms lead their competitors” (Kotler, 2000, p. 217). Marketing Words of Wisdom by Philip Kotler Reference: Kotler, Philip. (2000). Marketing management: the millennium edition. Upper Saddle River, NJ: Prentice Hall. Unit 4 Outcomes • Identify the components of a formal marketing plan. • Explain the different methods of forecasting sales. • Define customer relationship management CRM) and explain its importance to a small business. • Understand psychological and sociological influences on the consumer. • Identify advertising options for a small business. Unit 4 To Do List Start the Unit: • Review the key terms Study: • Read Chapter 7, and Chapter 14 in your text Prepare: • Carefully review the completed sections of your descriptive business plan. Graded Assignments: • Respond to the Unit 4 Discussion Board • Complete the Marketing Plan in the MT209 Project Template • Attend the Unit 4 Class Seminar or complete the Alternative Assignment • Complete the Unit 4 Quiz Unit 4 Class Discussion Unit 4 Discussion: Read the article on entrepreneur.com describing each of the following five consumer groups: Gen I, Gen Y, Gen X, Boomers, and The Greatest Generation at: http://www.entrepreneur.com/marketing/article202334.html# Then respond to the following: 1. Describe your particular business plan concept. 2. What would form your target market and why? 3. How would this particular choice impact your promotional considerations? Be sure to give some specific examples. Unit 4 Assignment Using the MT209 Project Template and the MT209 Project Instructions; complete the Marketing Plan section of your Descriptive Business Plan in the MT209 Project Template. This should include the following elements: 1. Market analysis – Develop a customer profile for each identified potential target market customer. What kind of potential customer does your business seek to reach? Include customer demographics like age, geographical areas, ethnicity, religion, culture, income levels, gender, If these are relevant to your product or service. Some general things you would most likely want to know: 1. What is the purchasing power of this group (how much disposable income)? 2. What is their dominant family status (families, singles)? 3. What are their age ranges? 4. What are their leisure habits? 2. Competitors – Outline and describe principal rivals for each target market customer group. Be sure to also include indirect competitors as well as direct competitors. 3. Marketing strategy – Describe how you propose to reach the target customer. Will you use a single segmented, multi-segmented, or un-segmented strategy? Explain how you will promote the product or service to the target customer. Explain your proposed pricing strategy and why. Explain your distribution strategy; how you will deliver your product or service to the customer. Marketing Question: What do you think best defines or describes marketing? Marketing • Marketing: The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create and maintain relationships that satisfy individual and organizational objectives. Question: Is this more or less than you thought was marketing? The Goals of a Marketing Plan Goals for the Marketing Plan should be to: • Name and describe each market your new business seeks to serve. Question: Why would you want to do this? • Explain what specific methods you plan to use to reach customers in each of these markets. Question: Why is this necessary? • Establish the costs in both time and money to effectively market your new venture’s products or services. Question: Why is this critical and why is this not a part of this descriptive plan? • Integrate your marketing plans with all other areas of your business plan. Question: Why is this necessary? Key Initial Marketing Questions • Is there a consistent demand for my product or service? • Who will I be competing against for the same customers and how strong are they? • Can I realistically compete against these on a basis of price? • Can I realistically compete against these on a basis of quality? • Can I realistically compete against these on a basis of delivery? • Can I do all of the above and still produce my projected profits? These are key questions that must be satisfactorily answered before proceeding with a venture! Question: What kinds of research are needed to answer these? Marketing Research ). • Shows other possible approaches to your market(s) • Gives meaningful basis for making assumptions about profits • Helps in development of goals • Helps in organizing the Marketing Plan • Helps in identifying the limits of profitability within markets. Two Types of Market Research Secondary Research: • Consists of already reported research, statistics, and projections done by others • Often provided by governmental agencies, state agencies, business trade organizations, universities • Often available as references in public libraries • Some available on Internet • Competitors Primary Research: • Specific research conducted by the entrepreneur or by those engaged by the entrepreneur • Is costly and time-consuming • Fills in the gaps not addressed by secondary research Both secondary and primary market research are required! The goodness of your marketing plans rests on good research! Qualitative versus Quantitative In ). this class, the quantitative data provided by market research is beyond the time constraints allowed. Our focus on this aspect of Market Research will instead be on understanding the process and the elements that must be addressed in good marketing research within a business plan. You will address market research in depth in a marketing course. Its All About the Customer! The ultimate goal of your market research is learning about a special group of people – your customers! • Who are your customers? • Where are your customers located? • What do your customers need or want? • What resources do your customers have? • Is your product or service something needed in their day-to-day lives? • Can your customers afford your products or services at your proposed pricing levels? • Where can you create a demand for your product or service? • What areas within your market are declining or growing? • What is the general economic state and outlook of your product or service market area? Marketing – Delivering Bundles of Satisfaction! • Core Product or Service – Fundamental benefit sought in product or service • Actual Product or Service – The actual product or service that fulfills the fundamental benefits sought. • Augmented Product or Service – The basic product or service plus any additional perceived benefits that prompt a customer to purchase the product or service. Market Analysis Question: Can you know enough about your market? Question: Can you know enough about your customer? Question: Why is it important to know as much as possible about the existing competition in a particular market? Question: What are substitutes? Question: What are complements? Market Analysis Customer Profile – Created by secondary and primary research carefully describes how your product or service will specifically create perceived value for your target customer. Analysis of Competition – Also created by research seeks to thoroughly identify the strengths and weaknesses of rivals in your potential market. Marketing Strategy – Specific strategies must be created to address each target market segment or group of customers. These will outline how the business will create its marketing mix. Marketing Mix • Highlights areas that must be addressed by a firm’s marketing strategy. “4 P’s” • Product – How to transform the product or service into bundles of customer satisfaction? • Place – How to deliver the product or service to the customer? • Price – How to set the appropriate pricing levels for the product or service? • Promotion – How to communicate the necessary information to the potential customers? Any questions? See you next week! Next week will be mid-term! Is your work up to date? Remember, our Class Seminars will always be held at the same hour and the same day each week! After this seminar has concluded, there will be a recording in the archives located in the seminar room. It may be selected by date. Thank you for joining me today! I look forward to joining you next week!