Transcript Marketing - BDC Connex

Module 5
Marketing Plan
Marketing
The majority of individuals asked, “what is marketing?” respond
by explaining advertising. Marketing is the most critical
component of all business plans.
Marketing is the process of examining the wants and needs of
others and then satisfying those needs with products
and/or services. A popular slogan that describes
marketing is “Find a need and fill it.” For the purposes of the
E-Spirit competition the marketing module will only provide a
superficial overview of the marketing process.
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Marketing Plan
Marketing Basics: The Marketing Concept was introduced in
the 1950’s and has been adopted as the standard for
business. The marketing concept consists of three key
components for marketing success:
To market your product successfully, you need to know at least
the following:
Who is going to buy?
Where will they go to get it?
Why buy from you?
How much will they pay?
What is it they want?
How much will they buy?
How will you sell it?
How much profit do you want?
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Targeting Your Market
> What characteristics of our potential consumer should be
examined?
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Income
Education
Buying patterns
Geographical location
Interests/hobbies
Current trends
Current and future competition (who is the customer buying from
now?)
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Targeting Your Market
> Others (how many other characteristics can you think
of?)
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Primary and Secondary Markets
It can be useful to separate your target market into the
most likely clients and the less likely clients:
Primary markets: The most obvious or biggest group of
buyers for your product or service. Ex.: the primary
market for the baby-clothing store is young moms and
dads with a moderate income.
Secondary markets (and sometimes even tertiary or third
markets): An area or group of buyers from which you
could capture some sales. Ex.: Here are two possible
secondary markets for the baby-clothing store:
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Primary Research
This means gathering information yourself for the first time,
because the exact information you need doesn't already exist
anywhere. Primary research usually involves people surveys.
Example: The primary (main) target for the baby-clothing store
is young moderate-income families. We want statistics to find
out if that market exists in our area, and if that market will
support our store. The best way is to ask our community
directly. That's primary research!
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Primary Research: Surveys
Surveys: Whether you live in a small community or in a larger
area, you would have trouble surveying everyone in the area.
So instead, you survey a small, typical group. This is known
as a representative sample. From that sample, you can make
an estimate for the larger group. Even big professional market
research firms rely on representative samples to do their
studies.
You can do your survey by telephone, mail, e-mail or in
person. Each method has its advantages and disadvantages:
Telephone surveys are cost effective and quick, and have a
reasonably good response rate (50% to 60% percent of
people are willing to answer).
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Surveys
Mail is cheaper, but you get what you pay for: a much lower
response rate (5% to 15% of people take the time to fill out
the questionnaire and send it back).
E-mail has become a major marketing tool. At the same time,
people get more and more spam. You don't want people to
delete your survey before they even look at it.
In person surveys at community functions (powwows, dances
and conferences) or mall interviews take the most time and
are usually the most challenging. But they can give you useful
information because you also get people's comments and
reactions.
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Questionnaires
No matter what method you choose for your survey, you first
have to prepare your questionnaire. After your team has
decided on the questions it wants to ask, try out the
questionnaire on family members. See what Kokum
(Grandma) thinks. Or ask some of your future customers for
their comments.
Some sample questions:
Do you have children or grandchildren between the ages of 1
month and 12 years?
Where do you usually shop for children's clothing? Is it a
convenient location?
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Secondary Research
What about secondary research? That's when you use
information that already exists. If someone has already
gathered business information about your potential market,
use it! Remember, the more you know about your market, the
easier it will be to figure out who your ideal customers are.
Ex.: you should be able to find data on how many people live
in your area, average incomes, and average ages.
The trick is to find the source of information you need for your
particular business. That's why it's called research: it's not
likely to land on your desktop in a neat package!
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Secondary Research
Good sources of information for starting-up your small
business include:
Local business associations: hotel and restaurateurs
associations, Retail Council of Canada, etc. ; Junior
Achievement ; Local chambers of commerce; Economic
development organizations ; Local public libraries; The yellow
pages; University and college business departments and their
libraries; Government offices, like the archives departments;
First Nations and Métis Capital Corporations; Community
Futures Development Corporations; Indian Affairs (general
reference Web site).
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Secondary Research
The following Web sites can also help you:
> Family Expenditures in Canada
> Dun & Bradstreet
> Strategis
> Canadian Census data from Statistics Canada
> Canada Business Service
> Centre Scott's Directory of Canadian Manufacturers and
Suppliers.
> Canadian Almanac Directory.
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Consumer Behaviour #1
Why do customers decide to purchase certain products or
services over others on the market?
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Market Segmentation
No business can have one marketing strategy and reach
everyone. The world is just too big. There are too many
different people and businesses out there. That's why
companies try to attract specific groups or types of people.
These are called market segments.
Big business and corporate America really capitalize on this.
They realize that people have different needs, and they
design their products to meet those needs.
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Market Segmentation: Example
> Shampoo companies have different marketing strategies for
different market segments. Here are some of the messages
you will find when you stroll down the shampoo aisle:
– Clinically proven hypoallergenic for sensitive heads
– Baby soft
– UV protection in shampoos and conditioners for people worried about
the ozone
– Shampoo for normal, color treated, permed, or damaged hair
– Shampoo to give a smooth and sleek look
> And the list goes on!
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Consumer Behaviour #1
To satisfy a want, need, or
perceived want or need
> Impulse
> Major purchase
> Trend
> Emergency
> Gifts
> Holiday
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Team Responses
> Business
> Other?
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Consumer Behaviour #2
What process does the typical consumer undergo prior to
purchasing a product or service?
Awareness
– Consumer must be aware of your product or service (advertising)
Information Gathering
– Gathers information concerning similar products or services
Evaluation
– Makes a decision based on research gathered
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Consumer Behaviour #2
Purchase
– Purchases the product or service of their choice
Post-Purchase
– Decides if the decision was a good one!
REMEMBER THE LAST GREAT PURCHASE YOU MADE, HOW
MANY PEOPLE DID YOU TELL?
REMEMBER THE LAST BAD PURCHASE YOU MADE, HOW
MANY PEOPLE DID YOU TELL?
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Product and/or Service
What product is your business going to sell? (Remember that
your product can also be a service). Whether you are selling
used CDs, gas, a new line of clothing, natural products, or
environmentally friendly products, the customer has to want or
need to buy it!
The big question then becomes: Why would someone buy your
product?
What unique or special features does your product offer
customers? To answer that question , think of your target
market. How is your product supplying something that the
people in your market need, regularly use, or want?
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Examples
Ziggy's Video & Internet will offer an extensive selection of
video games, movies and high-speed Internet service for all
your home entertainment needs.
Ziggy's Video & Internet is a progressive business recognized
by the technology community as a leader in the support of
information technology solutions.
When you explain the features of your business, remember not
to confuse this with the benefits.
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Product Pricing
How do you set a price for your product or service?
What does it cost to produce? (Cost-based pricing)
How many units or services must be sold to start making a
profit? (Break-even analysis)
Will price be based on industry average or competition?
Price will be based on consumer perceptions for a quality
product or service. (Target market considerations)
Other? How many other ways can you set the prices for your
product?
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Price: Costs
When you calculate how much it costs to produce your product,
you should consider the following:
Cost of goods means everything you have to buy in order to
make and sell your product. If you are in a service industry,
you should include the products and services you buy from
your suppliers.
Labour includes the people you have to pay to get your product
manufactured, packaged and delivered to stores.
Overhead expenses are your business' monthly expenses,
such as; rent; taxes; utilities; equipment costs; phone; office
supplies postal/shipping/courier costs; bank loans; equipment
rental to use at events; supplier rental equipment.
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Price: Costs
Advertising, marketing and sales
The customer has to know you exist before they can buy from
you! What's the best way to let your target market know about
your business? How much will it cost?
If you are thinking about advertising, make sure you are reaching
your market. Does your typical potential customer read the
newspaper, watch TV, or surf the net?
Your team can also market the business every day by
networking in the community. Word of mouth can be an
effective way to spread the word about your company. You can
also advertise in local magazines and actively participate in
community happenings.
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Price
Here are some other things to consider:
What is your competition charging for their service or product?
Who is your company catering to: is it middle-class families, or
families on a budget, etc?
What is the customer in your market willing to pay?
How will you generate sales?
Have you included these costs in your price?
Will your company be provided payment terms, allowing you to
pay later?
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Pricing Strategies
1. Skimming
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Price high than competition (upscale customer)
Low sales volume – high return (per unit)
2. Penetration
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Lower prices than competition (attract consumers)
Gain market share
High volume sales-low return (per unit)
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Pricing Strategies
3. Demand Oriented
– Prices may vary for differing customer (example: movie theatres child
prices vs. Adult prices)
– Different consumers are willing to pay for your product/services but at
different prices
4. Leadership
– Prices are set the same as the “industry” leader (What is good for the
goose strategy)
– Leadership strategy accounts for the rationale of why all candy bars cost
the same or soft drinks!
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Pricing Strategies
Competition – Oriented
– Prices are based on what ALL of your competition is doing
– Prices dependent on consumer perceptions, loyalty, business image,
customer service, warranties, etc.
– Prices can be above or below competition prices
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Place
1. Where is your potential customer most likely to shop for your
product or service? Most likely, in a location that is
convenient for your customer. Consider that when you
choose your site.
2. When is your customer most likely to buy your product? If
your shop is always closed when the customer is shopping,
then it won't matter if you're in the best possible location. So
choose your hours of operation carefully.
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Place: Distribution Channels
Distribution channels
Your product goes through several steps from the time it is
manufactured, until the time it is purchased by the final consumer (or
the industrial client like a construction company). The final
consumer is the person who buys an item for personal use, and not
for resale.
The different steps the product goes through are called intermediaries.
There are 2 types of intermediaries:
Wholesalers are the people or businesses that sell to the retailers or
construction companies, but hardly ever to the final consumers.
Wholesalers are also called suppliers or distributors.
Retailers are the business people or businesses that sell the goods to
the final consumers.
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Example
> McCain Foods manufactures fries in potato land: Carberry,
Manitoba.
> The fries are sold to a wholesaler (who stores them)
> The wholesaler sells them to a supermarket (retailer)
> And finally they are sold to the customer—that's you.
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Let’s Recap
> http://www.youtube.com/watch?v=Tb8bF2hCyLw&feature=rel
ated
> Know your customers: Where will they shop? At what times of
the day, and on which days of the week will they shop?
> What is the cost of your building location? Is it worth your
hard-earned money?
> Who is your competition?
> Is your location safe for your customers, your team and
Mother Earth?
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Promotion and Advertising
To figure out which promotional tools will help you meet your
marketing goals, with your budget, you need to do some more
research think about your customer be creative.
This will keep you from wasting money and time on strategies
that won't work for you. Ex.: advertising your business in the
newspaper is a waste if your target market tends to listen to
the radio.
Have fun and remember to be honest about your product and
promotion of your business.
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Promotional Plan
Marketing: You may choose to provide and distribute materials
like brochures, newsletters, flyers, posters, etc. Make sure
your documents (and your logo) are catchy and filled with
information.
What do you think should be included in your promotional plan?
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Promotional Activities
This includes;
> sponsorships for special events
> participation in community projects, powwows, trade shows,
friendship and youth centres, job/health fairs
> contests and give-aways (with your logo on the items)
> coupons, free samples
> public speaking events
> advertising
> outdoor advertising (billboards and bus boards)
> radio and Internet sites.
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Name, Logo and Slogan
We talked about these in Module 2. But let's look at them more
closely. These three things are important because they get
repeated in all your documents and promotional activities.
Your company should have a powerful name, logo and company
slogan. These will improve your business image and
reputation, attract attention and stimulate curiosity. They
should:
> connect with your consumers
> make a lasting impression
> say something about your values.
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Name, Logo and Slogan
Use your slogan everywhere; TV, print advertisement, posters,
Web sites, direct mail, tradeshows and meetings.
Like the slogan, your business name can say a lot about your
product or service. The best names are short, sweet and
descriptive. Describe your product or service and convey
important selling points. For example, if using recycled
products will appeal to your customers, mention that in your
name.
Again, it's more important that your name be clear than clever.
Ex.: I doubt anyone would know what my business is, if I
called it BCARS—Biological Consumer Accredited
Reengineering Systems.
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Competition
Do you know who your competitors are and what they have to
offer? It's time to find out.
This is called a competitor analysis or survey. The process
takes some time but it's worth the effort. It will help you find
out your competitive advantage:
What can your business offer that others can't?
What customers want: Are their needs being met? How can you
meet those needs?
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Competition
Ask yourself the following questions:
> Who are my competitors? But don't forget that competition isn't
limited to your specific product. It also includes other related and
replacement items. Ex.: If you sell ice cream cones, your
competitors, naturally, include other ice cream cone vendors. But
you're also competing with vendors of other desserts.
> What are the strengths and weaknesses of the competition?
Consider price and selection, location and business hours, quality,
advertising, staff, distribution methods and customer service.
> What are their selling features? Can you improve on these?
> On what basis do they compete? Are they friendly or totally driven?
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Competition
From your survey, you will have some information about the why but
not the how. Here are some ways to get more complete information
on your competitors:
> The Internet
> Community functions
> Sharing circles: listen to the people
> Telephone books
> Personal visits: go to your competitor's location and observe what
they do
> Talk to customers, Elders and other people: listen to what customers
are saying about your competitors
> Ads and presentations.
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Marketing Common Mistakes
1. Not knowing your market (Where you do business)
2. Unclear target market (Your customer)
3. Trying to capture the entire market “shot gun approach”
4. Assuming your market will buy your product without concrete
evidence (survey, ask!)
5. Not knowing how you are going to promote your product or
service, through what means? (Newspaper, T.V., newsletter,
other?)
6. Forgetting details such as when, where, why and how you
will reach your target customer – along with expenses
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Marketing Common Mistakes
7. Underestimating the importance of customer loyalty and
perceptions
8. Forgetting what business you are in?
9. Not having a clear vision, goals and objectives
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E-Spirit
www.bdc.ca/en/espirit