Entrepreneurship and small business management chapter 07

Entrepreneurship and Small Business Management Chapter 7 Developing the Right Marketing Mix and Plan...  Use breakeven analysis to evaluate your marketing plan...  Promotion—use of a

Entrepreneurship and Small

Business Management

Chapter 7

Developing the Right Marketing Mix

and Plan

Ch 7 Performance Objectives

 Combine the four Ps—product, price, place, and promotion—into a marketing mix.

 Choose the attributes of your product or

service.

 Determine the mix of promotion to use for your business.

 Find a way to add the fifth P, philanthropy,

Ch 7 Performance Objectives (continued)

 Understand the importance of a

marketing plan.

 Identify the critical components of a

marketing plan.

 Use breakeven analysis to evaluate

your marketing plan.

Marketing Mix: The Four Ps

 Product—What are you selling?

 Price—What does the price “say” about

your product?

 Place—What is the best location for

your business?

 Promotion—How will you advertise and

publicize your product?

Create Your Product Concept

 Products are defined by:

 Physical attributes

 Performance characteristics

 Pricing

 Branding

 Delivery

 Key to successful branding: focus on

the product’s primary benefit

Establish Your Brand

 Choose an easy-to-remember name

that describes your business.

 Design a logo that symbolizes your

business.

 Develop a good reputation.

 Create a brand “personality” and

communicate it to your target market.

Build Your Brand’s Reputation

 Provide a high-quality product/service.

 Maintain high ethical standards.

 Define the product/service clearly.

 Treat employees well.

 Make ads positive and informative.

 Associate the company with a charity.

 Be involved in the community.

Price Considerations

 Simply undercutting competitors’

prices will not necessarily win you

the largest market share.

 Consider the psychology of pricing:

consumers tend to infer things about

a product/service based on its price.

 The type of business affects the

location that works best.

 Who are your customers?

 Where do they shop?

 Goal: Find a location affordable for you, yet also convenient for customers.

 Promotion—use of advertising and

publicity to get your marketing

message to your customers.

(billboards, TV ads, magazine ads, etc.)

 Publicity—free mention of a company,

person, or product/service in the media

Promotion Methods

 Advertising specialties

 Banner ads

 Billboards

 Blogs

 Broadcast media

 Brochures

 Business cards

 Catalogs

 Coupons

 Direct mail

 Directories

 Flyers

 Networking

 Newsletters

 Print media

 Promotional clothing

 Public speaking

 Samples/demos

 Special events

 Sponsorships

 Telemarketing

 Toll-free numbers

 Web sites

Philanthropy: The Fifth P

and social welfare, expressed by giving

money through charities/foundations

that manages funds donated to help

people and social causes

 Philanthropy creates goodwill—

favorable reputation, name recognition,

Cause-Related Marketing

 Inspired by a commitment to a social,

environmental, or political cause

 Simple way to work philanthropy into

your business

 Examples:

 Donate fixed % of revenue to charity

 Donate products/services

 Encourage employees to volunteer

Roles of a Marketing Plan

 Convince skeptical investors that your

plan has merit.

 Use and disclose market studies.

 Identify the target market.

 Evaluate the competition.

 Demonstrate the pricing strategy.

Marketing Plan Components

Components Stand-Alone

Plan Bus Plan Section

Opportunity Analysis: X

• Industry Analysis X

• SWOT Analysis X

• Environmental Analysis X

• Competitive Analysis X

Marketing Plan Components

Components Stand-Alone

Plan Bus Plan Section

Marketing Analysis: X X

• Overall Market and Target X X

• Goals and Objectives X X

• Marketing Strategy X X

Product/Service X X Pricing Strategy X X Promotion Strategy/Plan X X Place/Distribution X X

Marketing Plan Components

Components Stand-Alone

Plan Bus Plan Section

Marketing Analysis (continued): X X

• Future and Contingency Plans X X Financial Projections X

Implementation Time Line X

Supplemental Materials X

Can You Afford Your

Marketing Plan?

 Marketing is part of your business’s fixed

costs and should not be budgeted as a

percent of sales.

 Calculate breakeven units to determine if

the business can cover marketing costs with the number of units you expect to sell.

 Breakeven units = Fixed cost (per month or