Marketing the fundamentals

The FundamentalsOf Marketing

SmallBizU Online eLearningwww.smallbizu.org

Christene Swanepoelwww.christene-marketing.info

Presented By…

Objectives of this course

•To help you understand what marketing is.

•To help you learn how to conduct market research.

•To help you understand how to analyze your market environment and determine your target market.

•To help you determine how to position your product.

•To educate you on the 4 P’s (product, price, place & promotion) and how to apply them to marketing.

•To show you the basics on how to create a marketing plan.

Menu…1. What is marketing?2. Conducting market research3. Analyzing the market environment4. Selecting your target markets5. Market positioning6. Designing products & services7. Pricing products & services8. Placing products & services9. Promoting products & services10.Creating a marketing plan

1.

What Is Marketing?

What is Marketing?Most people mistakenly identify marketing with selling and promotion.

While selling and promotion are a part of marketing, they are not most important part.

In Principles of Marketing Philip Kotler stated:

If the marketer does a good job of identifying consumer needs, developing appropriate products, and pricing, distributing, and promoting them effectively, these goods will sell very easily.

Defining Marketing…

Marketing can be defined as an activity directed at satisfying needs and wants through exchange processes.

The ultimate goal of marketing is to make selling nonessential,

To know and understand the customer so well that the product or service fits him or her and sells itself.

Marketing deals with goods, services, and ideas.

A good is something someone can touch.

A service is providing an intangible benefit to customers.

An idea can include concepts or images.

For this course, we will use the word product to refer to goods, services, and ideas.

Goods, Services and Ideas…

One of the underlying concepts of marketing is trying to satisfy a customer’s needs, wants and demands.

Needs are plentiful. Basic human needs include food, clothing, warmth, safety and belonging.

Wants are simply needs shaped by culture and the individual.

Demands are simply the wants of a consumer when backed by the ability to pay for that want.

Needs, Wants, and Demands…

Marketing usually occurs to help facilitate an exchange between a buyer and seller.

Exchange Process…

There are many forces that affect the marketing environment, including:

CompetitionLaws and RegulationsEconomic and Social ConditionsCultural Factors

These forces can be dramatic and difficult to predict.

Be aware of these forces because they can create threats and generate opportunities for your business.

Dynamic Marketing Environment…

The marketing mix is another important concept when it comes to marketing.

The marketing mix refers to activities that a firm can control to produce the response it wants from the target market.

These variables can be categorized into four groups, also know as the four P’s of marketing.

The Marketing Mix…

1. Product – This is what you are offering to your target market, be it a tangible product or a service.

2. Price – The amount you will charge for your product.

3. Place – Channels your product will go through to reach the customer.

4. Promotion – How you raise awareness with your target market.

The 4 P’s of Markting…

While the previous four P’s are important to the marketing mix, there is one that is left out.

Positioning

Positioning is not dealing with where you will place your product in the market, but where you will place you product in the mind of the consumer.

The 5th P of Marketing…

Conducting Market Research

2.

There are two main types of data that will help youin researching your market.

The first is secondary data. Secondary data is information that already exists somewhere. It was collected for another purpose.

Primary data, consists of information collected for the specific purpose at hand.

Marketing Research data…

Researchers will usually start by collecting secondary data.

Secondary data can be obtained quicker and at lower costs.

When collecting secondary data evaluate it carefully to make sure that it is:

RelevantAccurateCurrentImpartial

Start with Secondary Data…

With all the resource outlets that exist today, there are many opportunities for you to gather secondary information on the industry you will be participating in.

The following sources should help you in getting started:

NAICS Code HooversStandard & Poor’s

Researching your Industry…

Before you start researching your customer, it is important that you determine whether they will

be individuals in a particular area or if they will be other businesses.

Researching Your Customer…

There are many secondary data sources for researching consumers.

Consumer expenditure surveysCensus dataVALS – (Values, Attitudes, & Lifestyles Surveys)

Researching Consumers…

If your target customers are other businesses, the following links may be helpful in conducting research:

Business expenditure surveyIRS dataEconomic census

Researching Businesses…

After you have determined who your customer will be and found some of their characteristics,You need to estimate the size of your target market.

IRS, Census, RMA, and Dun & Bradstreet are all sources that can help you estimate your target market size.

Estimating Your Market Size…

Since primary data does not already exist it can become very costly and time consuming to gather.

There are several ways to collect primary data.

The most common methods are observation, survey, and experiment.

These methods can be done by mailings, telephone calls, and personal interactions to name a few.

Collecting Primary Data…

Data is gathered in the observational approach by watching people in either a natural or artificial setting.

The survey approach is best suited for those who are looking to gather descriptive information.

The experimental approach involves selecting two groups, giving them different treatments, and then measuring the effects.

The Research Approaches…

With mail questionnaires you can collect a fairly large amount of information at a low cost.

Telephone interviewing costs more than mail questionnaires but can provide more information quickly.

Individual interviewing is another way of gathering information. This type of interviewing may require an incentive to get people to participate.

Gathering a group of people together to discuss certain topics with a trained interviewer is known as group interviewing.

Contacting Research Subjects…

When developing a questionnaire keep the following in mind:

Take your time to make sure that it is carefully developed and tested.

Carefully choose your wording of each question.

The sequence of the questions is also important.

Make sure that all the questions included in the survey are necessary.

The Anatomy of a Questionnaire…

Interpreting data can easily become overwhelming if you are not careful. Make sure that you report only major findings.

Do not use too many statistical analyses just for the sake of using them.

Put your findings into simple terms so that even someone not familiar with the survey will be able to understand them.

Interpreting Market Research…

Analyzing The Market Environment

3.

The marketing environment is made up of two environments;

The micro-environment is the immediate environment that effects the companies ability to serve customers.

The macro-environment consists of larger social forces that affect all players in the microenvironment.

Macro and Micro Environments…

All groups in a company - Accounting, R&D, Manufacturing, Top Management – are part of a company’s microenvironment.

All these departments will have an impact on the marketing decisions and actions of the company.

For this reason, the marketing manager should try to work closely with these departments and others when establishing a marketing plan.

Analyzing Your Company…

Distribution channels will also play a role in the microenvironment.

Suppliers, middlemen, warehouses and transporters are just a few of the factors that will effect the business.

Be aware of these factors and how they will affect your market planning and decisions.

Distribution Channels…

Which customer market will the company operate in?

ConsumerIndustrialResellerGovernmentInternational

Each of these markets’ characteristics should be analyzed on how they will effect the company.

Analyzing Your Customers…

The number of firms that supply a similar product will play a role in the competitive environment.

Once you determine the number of competitors, you should then analyze competitive tools that will set you apart from the competition or give the competition an advantage over you.

The first competitive tool most companies will use is price.

Competitive Forces…

Be aware of the actions of your competitors.

Also develop an understanding of the market you are participating in, and what the customers in this market want.

Monitoring Competition…

A SEPTE analysis is a process that helps in analyzing the macro-environment.

SEPTE stands for…

Social environmentEconomic environmentPolitical and legal environmentTechnological environmentEnvironmental issues

SEPTE Analysis…

Social environmental factors include demographics and cultural aspects.

These factors affect customer needs and the size of potential markets.

Some social factors include:

population growth ratespopulation shiftsage structure (youths, young adults, retirees, etc.)the changing in family structure

Social Environment…

Economic trends can affect the marketing environment in several ways.

Fluctuations in real income determine how much consumers will have to spend on discretionary goods and services.

Also take into account the income distribution and the average income of your target market.

Economic Environment…

Other economic factors include income, cost of living, interest rates, and savings and borrowing patterns.

These factors can have a substantial impact on the marketplace.

Other Economic Factors…

Developments in the political and legal environment can have serious consequences on your marketing efforts.

Be aware of:

Legislation regulating businessThe affects of government agencies such as the FDA, FCC, or EPA on your company.Growth of public interest groups that positively or negatively affect your business.

Political and Legal Environment…

Technological factors can lower barriers to entry and influence outsourcing decisions.

Some examples of technological factors include R&D activity, automation and rate of technological change.

Another factor that may affect the technological environment is if a company concentrates only on minor improvements or major innovations.

Technological Environment…

In our ever changing world, marketers should pay close attention to certain environmental factors that could create tremendous impacts on the marketplace.

Impending shortages on raw materials, increased cost of energy, increased levels of pollution, and government regulations and intervention all play a role in the environmental marketplace.

Environmental Issues…

Selecting Your Target Markets

4.

The first step in selecting your target market is to determine whether your customers are consumers or businesses and industries.

Keep in mind that you can have more than one target market. However, if you find the description of your market too broad or general, then ask yourself:

Is there really more than one target market here?

Consumer vs. Business…

Next consider the geographic level you will target.Will your customers be mostly at the local, state, national or international level?

You also need to decide what the geographic makeup of your target market will be.

You can classify your target market as either rural, suburban, urban, or a mix of any of these.

Geographic Location…

What characteristics will your target market share that will differentiate them from others?These variables should be measurable and can include any of the following:

- Age - Education- Gender - Occupation- Race - Family Size- Ethnicity - Marital Status- Income - Social Class

Demographic Variables…

Many resources are available to help you define the demographics of your target market.

U.S. Census Bureau

Demographic Resources…

Psychographics help define characteristics of a group based on their lifestyle, personality, and social class.

One of the most popular surveys of psychographics is known as the VALS.

Value, Attitude, Lifestyle Surveys

Psychographics of your Market…

VALS place consumers into certain segments based on their responses to a particular survey.There are eight segments that they may be placed into.

These segments are then defined by certain characteristics and traits that they share.For more information go to:

http://www.sric-bi.com/VALS/

VALS…

To recap, when selecting your target market it is easiest to start broad and then move to more narrow to define your market.

Are you targeting consumers or a business/industry?

What is the geographic makeup of your target market?

What are the demographics of your target market?

What are the psychographics of your target market?

Selecting your Target Market…

Market Positioning

5.

One of the best-known names in American advertising circles is David Ogilvy.

After spending several billion dollars on advertising, Ogilvy listed 32 things his ad agency had learned.

Of the thirty-two, he said that the single most important decision involved positioning the product.

He claimed that marketing results depended less on how advertising was written than how the product or service was positioned.

The Concept of Positioning…

In their 1981 book, Positioning: The Battle for your Mind, Al Ries and Jack Trout describe how positioning is used as a communication tool to reach target customers in a crowded marketplace.

Not long thereafter, Madison Avenue advertising executives began to develop positioning slogans for their clients and positioning became a key aspect of marketing communications.

While positioning begins with a product, the concept really is about positioning that product in the mind of the customer. In other words, marketing is a battle of perception, not products.

The Origins of Positioning…

Ries and Trout explain that the concept is really about positioning a product in the mind of the customer. Strategy is therefore planned in the mind, not the marketplace.

This approach is needed because consumers are bombarded with a continuous stream of high-volume advertising.

The consumer's mind reacts to this high volume of advertising by accepting only what is consistent with prior knowledge or experience.

What is Positioning?

It is quite difficult to change a consumer's impression once it is formed.

Consumers cope with information overload by oversimplifying and are likely to shut out anything inconsistent with their knowledge and experience.

In an over-communicated environment, the advertiser should present a simplified message and make that message consistent with what the consumer already believes by focusing on the perceptions of the consumer rather than on the reality of the product.

How Positioning Works…

The easiest way of getting into someone's mind is to be first.It is very easy to remember who is first, and much more difficult to remember who is second. Even if the second entrant offers a better product, the first mover has a large advantage that can make up for other shortcomings.

However, all is not lost for products that are not the first. By being the first to claim a unique position in the mind of the consumer, a firm effectively can cut through the noise level of other products.

The Importance of Being First…

Miller Lite was not the first light beer, but it was the first to be positioned as a light beer, complete with a name to support that position.

Similarly, Lowenbrau was the most popular German beer sold in America, but Beck's Beer successfully carved a unique position using the advertising:

"You've tasted the German beer that's the most popular in America. Now taste the German beer that's the most popular in Germany."

A Few Positioning Examples…

If a product is not going to be first, it then must find an unoccupied position in which it can be first.

At a time when larger cars were popular, Volkswagen introduced the Beetle with the slogan "Think small.”Volkswagen was not the first small car, but they were the first to claim that position in the mind of the consumer.

Finding your Unoccupied Position…

Sometimes there are no unique positions to carve out. In such cases, Ries and Trout suggest repositioning a competitor by convincing consumers to view the competitor in a different way.

Tylenol successfully repositioned aspirin by running advertisements explaining the negative side effects of aspirin.

Repositioning a competitor is different from comparative advertising. Comparative advertising seeks to convince the consumer that one brand is simply better than another.

Consumers are not likely to be receptive to such a tactic.

Repositioning the Competition…

Sun Tzu stated, "battles are won or lost before they are ever fought.“

The concept of positioning applies to products in the broadest sense.

Services, your business itself, tourist destinations, countries, and even careers can benefit from a well-developed positioning strategy that focuses on a niche that is unoccupied in the mind of the consumer or decision-maker.

Applying Positioning…

Ask yourself, “How can I be the first to claim a unique position in the mind of my customer.”What exactly is my positioning message?

Remember, your consumer's mind reacts by accepting only what is consistent with their prior knowledge or experience.

Don’t try to change their mind, instead find a position that they already believe to be true or have trouble being in opposition to such as the “Clean Air Act.”

To Position your Product or Service…

Remember, you must own your niche and own it outright. No one else can occupy your space.If you can’t own it, especially from a marketing expenditure outlay, then decrease the size of niche until you can.

If somebody else occupies your chosen space try to reposition them.

Finding your Niche…

Your positioning message is what you will consistently reinforce to your selected niche.

The message should help your customer identify, understand, and remember your position.

To be effective, your message needs to be short—usually under five words—three or less is better.

You should also try to let go of the intangibles such as your product features and price points and speak to your customer’s emotions. For example: Just do it—Nike.

Finally, let’s Consider your Message…

Begin by listing why your customers choose to do business with you rather than your competitors.

Try to list about three to five reasons listed in the order of importance.

Now, narrow down the key difference between your business and your competitors in a single word.

To Craft your Message…

When you listed why your customers choose to do business with you, it is probably true that you included words like: quality, customer service, expertise, selection, or location.

Repeat this to yourself:

These words represent boring, rational argument. In fact, they are probably the exact words that your competitor would list as well.

Be Very Careful…

When you appeal to rational thought you, in effect, create an argument in the customer’s mind.

To solve this issue, try moving your message from the customer’s head to their heart.

To do this you need to appeal to their emotions.

Avoiding Rational Logic…

A grass seed company tried an experiment.

They took their seed and put it into two separate packages:

One simply said Grass Seed and the price of $.99.The second was named Lawn Seed and showed a beautiful lawn flowing down toward a river. The price was $3.99.

Remember, the seed inside the packages was identical. But nonetheless, the Lawn Seed outsold the grass seed by a factor of 4:1.

People don’t want grass seed but rather the hope, feeling, and aspiration of having the beauty of that pictured lawn—and that’s really what they are paying for.

An Example of Selling Emotions…

Go back and review your positioning message and ask yourself, “Does it create boring, rational argument or does it sell emotional hope and aspiration?”

Start by re-writing your message in a sentence and then whittle your message down to three words or less.

Remember Nike didn’t say, “We have the highest quality shoes made through state-of-the-art processes of the best procured materials meaning they are long-lasting, durable, and offered at an excellent price point.”No, be very clear, they said: “Just do it.”

Consider your Message again…

Designing Products and Services

6.

One of the first questions to ask yourself is what does your product do?

Other questions that you should address are:

What need is addressed by the product?What are its features and benefits?Who supplies the products or materials?

Whether you make or resell a product, these questions are important to answer.

What is it that you Sell?

If you manufacture a product, the following questions need to be addressed:

How is it produced?

What materials and labor are required?

How will its quality be measured and controlled?

What is its technological lifespan?

What research and development has been conducted and what still needs to be done?

Manufacturing a Product…

Delivering a service can be quite different then manufacturing a product.

Some questions to address may include:

What services do you offer?How do they work?What materials or equipment is needed?What are your labor needs for these services?What are the steps in your service process?What benefit(s) do you provide customers?

Selling a Service…

Intellectual property is any product of the human intellect has some value in the marketplace. Intellectual property can include business strategies, images, ideas and concepts.

In some cases it can be worth more to a business than tangible assets.

For more information on intellectual property visit the World Intellectual Property Organization.

Intellectual Property

An important issue that comes up when discussing intellectual property is how to protect it. Protection can be obtained through a trademark, patent or copyright.

For information on patents, trademarks and copyrights go to…

United States Patent and Trademark OrganizationUnited States Copyright Office

Patents, Trademarks and Copyrights…

After you have addressed questions about your product, you should then consider how you will package it?

The primary function of packaging use to be to hold and protect the product.

Today, however, packaging is becoming an increasingly important marketing tool.

Packaging your Product…

Once a company has designed the packaging for a product, many want to include a UPC barcode on their product.

You can obtain a UPC barcode through the…

Uniform Code Council, Inc.

UPC Barcodes…

Product liability may occur when a customer suffers harm from using the product.

To incur liability you don’t necessarily have to be the manufacturer.

Everyone down the supply chain (including the wholesaler and retailer) could be affected.

A competent professional can help you determine what level of insurance your business will need.

Product Liability Insurance…

While some companies only offer one product or service, most companies try to diversify themselves by offering a product mix.

A product mix is the set of all product lines and items that a particular seller offers to buyers.

Product Mix…

A new product will go through a four stage process throughout its lifetime.

The Product Life Cycle Diagram

Product Life Cycle…

In the introduction stage the firm is seeking to build awareness and develop the market.

During the growth stage the company is seeking to increase their market share by building preference over their competitors.

In the maturity stage growth slows as similar products appear on the market.

Sales fall rapidly in the decline stage.

Stages of the Product Life Cycle…

Pricing Products and Services

7.

There are a number of internal and external factors that will come in to play when setting prices.

Some of the internal factors may include pricing objectives, strategy and costs.

External factors may include nature of the market and demand, competition and the economy.

Pricing Decisions…

Pricing objectives help answer the question: What are you trying to achieve with your pricing strategy?

SurvivalProfitReturn on InvestmentMarket ShareCash FlowStatus QuoProduct Quality

Pricing Objectives…

Once you have determined your objectives you should then focus on the methods you will use to determine your prices.

Keep in mind laws that regulate pricing and pricing strategies such as the Clayton Act.

For more information on the Clayton Act go to:

http://www4.law.cornell.edu/uscode/15/12.html

Pricing Strategy…

There are several basic pricing strategies.

Skim Pricing - Set your price high with the goal of capturing short-term profits.Penetration Pricing - Set your price low to discourage competition and appeal to a larger market segment.Fixed Pricing - Price is set by manufacturer or middleman and not subject to negotiation.Variable Pricing - Price is negotiated between buyer and seller.Price Lining - Establishes only a few prices for all the items within a given product line.Keystone Pricing - percentage markup applied to the product’s cost.

Types of Pricing Strategies…

Other pricing strategies include:

Customary Pricing - set price at the considered standard level for the product.Psychological Pricing - strategies that try to make the product’s price more desirable.Prestige Pricing - encouraging consumers to equate pricing with quality and status.Geographic Pricing - charging different prices for different regions of geography.Pricing Leader - determining if you will be a price leader or follower.

More Pricing Strategies…

Be aware of the floor and ceiling prices in your market.

The costs of the product will set the floor for the marketer.

The ceiling is set by the market and its demand.Set your price between these two points but keep in mind consumers will compare the price of the product against the value of owning it.

Avoid establishing where the costs will outweigh the benefits, and consumers will no longer buy your product.

The Nature of the Market…

Consumers will compare the price and value of a product to that of comparable items.

Learn the prices and quality of your biggest competitors.

Use this information in helping you to establish a pricing point of your own.

Competition and their Prices…

Booms, recessions, inflation and interest rates all effect the pricing of a product.

These economic turns will affect the costs to produce and consumers’ sensitivity to price and benefits of the product.

Be aware of the current economic conditions and the economic forecast for the future when establishing a price.

Economic Factors…

Once you have set the cost you can then determine the gross margin for the product.

Product Price (to consumer)minus Product Cost (to you)equals Gross Margin of Product

Compare your product’s gross margin with industry standards from sources such as RMA.

Determining Gross Margins…

Placing Products and Services

8.

Placing your product is the third of the four P’s.

It encompasses channels of distribution that serve as a transporter for getting your product to your customers.

Decisions you will need to make in placing your product include market coverage, channel member selection, logistics, and location.

Placing Decisions…

You must first determine which markets you are going to reach and with what objectives.

Be sure to include items such as the desired level of service and functions to be performed by channel members.

Constraints to developing your objectives may come from several sources.

Customers, products, intermediaries, company policies, competitors, and the environment.

Market Coverage….

Marketing channels direct the flow of products from producers to consumers.

They may go directly from producer to buyer.

Producer Consumer

Or the may have several steps between production to consumers.

Producer Wholesaler Retailer Consumer

Channel Member Selection…

What part of the distribution process does your business handle, if any?

WarehousingOrder processingInventory managementPackagingMaterials handlingReceivingTransportation and shipping

Part of the Process…

As you move down the marketing channel from manufacturing, to wholesaling and so on, it may become unclear what your distribution channel will look like.

Often, retailers believe that they do not have a distribution channel.

The fact is a retailer’s location is their distribution channel.

Retailers in the Distribution Channel…

You must decide how many intermediaries will be in the marketing channel.

Several middlemen will be needed for intensive distribution - stocking your product in as many outlets as possible.

Limited dealers will be granted the rights to distribute your product with exclusive distribution.

Selective distribution stands in the middle. It requires more than one intermediary, but fewer than the intensive distribution.

Number of Channel Members…

An important function of the marketing channel is the joint effort of all members to create a supply chain.

Supply chain management refers to the long-term partnerships among channel members to reduce inefficiencies, costs, and redundancies in the market channel.

If managed correctly, a competitive advantage can be established.

Supply Chain Management…

When planning your distribution channel you should be able to answer the following questions.

What will the ordering process look like?

Where will inventory be located?

How much inventory should be kept on hand?

How should goods be shipped?

Logistics of your Channel…

There are several ways to handle shipping.

FOB Factory Pricing: The costs of transporting the product from seller to buyer are borne by the buyer.

Freight Absorption Pricing: Paying some of the transportation costs in order to bring the price in line with competitors.

Uniform Delivered Pricing: A standard price charged regardless of location.

Zone Pricing: Charging different prices for different regions of geography.

Shipping Options…

What will it cost to lease or buy the needed facility?

Make sure that you can afford the location that you choose.

Also find out the term and duration of the lease of the desired location.

The cost of your location…

There are a multitude of federal, state, and local laws governing channel management.

Through such laws as the Sherman Antitrust Act and the Federal Trade Commission Act, the government is trying to make sure that free trade and competition are protected.

Channel Regulations…

Promoting Products and Services

9.

The promotional mix consists of four main tools.

Advertising,Personal selling,Sales promotion andPublicity

By identifying these tools you will be able to lay out the basis of a media plan and promotional budget for your company.

The Promotional Mix…

Advertising deals with communicating with your customers in a very public way.

By advertising you are able to repeat your message to customers numerous times in various formats.

However, be aware that while you are able to get your message to customers, they do not have to pay attention to it.

Advertising and it’s Various forms…

The Various Forms of Advertising…

Direct mailTrade shows Yellow pages NewspaperMagazinesRadioTelevisionOutdoor advertisingEmail advertisingTelemarketingInternet

Personal selling may be the most effective tool at certain times due to…

Personal selling involves face-to-face communication. Lasting relationships can be established with personal selling.When face-to-face with a salesperson, the customer is more likely to respond.

While personal selling is an effective tool, its cost can be overwhelming to a company.

The Pros & Cons of Personal Selling…

If you decide to take part in personal selling, a sales force will be needed.

Be sure to ask yourself how you will handle the following:

Recruitment and selection of sales personnelTraining sales personnelCompensation and motivationControlling and evaluating sales force performance

Selecting a Sales Force…

Sales promotions usually have three distinctive characteristics that help to set them apart.

1. They provide information and help gain attention.

2. They provide an incentive to the customer.3. They encourage the consumer to buy quickly.

Sales Promotion…

Sales promotions for consumers can come in various forms.

These forms include coupons, demonstrations, frequent-user incentives, point-of-purchase displays, free samples, money refunds or rebates and contests or sweepstakes.

Consumer Sales Promotions…

There are also numerous ways to offer sales promotions to businesses or industries.

When targeting these types of customers try offering quantity discounts, free merchandise, buy-back allowances, dealer listings or cooperative advertising.

Business Sales Promotion…

A well planned publicity campaign along with other promotional tools can be highly effective and help you save money at the same time.

Part of the appeal of publicity is that it can offer high credibility, it can catch people off guard and help dramatize a product or company.

The Appeal of Publicity…

What types of publicity tactics will you employ?

A press release is one option. Some reasons to issue a press release include:

Support of a social causeWinning of quality awardsNew product launchesSpeeches of top management

Other types of publicity include public speaking engagements and public events.

Types of Publicity Tactics…

After you decide on which tools from the promotional mix you want to use, you then need to develop a promotional budget.

This is usually a major obstacle for companies because while they may know what tools they want to use, they may not know how to allocate money to properly use them.

What comes next?

Many companies set their budget as a percentage of current or forecasted sales.

While other companies mirror their budget to that of their competitors.

Still some companies will approximate their budget by how much the objectives they wish to meet will cost in advertising dollars.

Setting the Promotional Budget…

For retail or location based service companies, the following formula will usually work in helping to estimate a promotional budget.

Projected Gross Sales

times 12% (.12) minus Cost of Rentequals Advertising Budget

A Percentage of Sales…

Creating A Marketing Plan

10.

Many entrepreneurs insist that hustle is all that is required in the marketing of their business.

But energy alone is not enough. Energy must be directed by intelligence.

Intelligent marketing is marketing that is first and foremost focused on a core idea.

All your marketing must be an extension of this idea—it isn’t enough to have a better idea—you need to have a focused strategy.

Why have a Formal Plan?

A complete marketing plan includes the following three sections:

The marketing plan identifies the market and your strategy.

The creative plan is similar to the marketing plan but is limited to the content of your marketing materials.

The media plan which sets forth and details your selected media weapons and media calendar.

The Plan’s Structure…

The marketing plan identifies the market and your overarching positioning strategy.

The length of your final marketing plan is up to you and depends on your organizational culture and the audience that will read and use the plan.

At first, though, try to state it in just one paragraph.According to Jay Conrad Levinson, author of Guerilla Marketing, a simple plan can be created in just seven sentences.

Let’s Start with the Marketing Plan…

Sentence one explains the purpose of the strategy.

Sentence two explains how you’ll achieve this purpose. It describes your competitive advantage and benefits.

Sentence three describes your target market—or markets.Sentence four, the longest, outlines the marketing weapons you’ll employ.

Sentence five describes your niche—your positioning.

Sentence six reveals the identity of your business.

Sentence seven states your budget, which should be expressed as a percentage of projected gross revenues.

A Simple Marketing Plan…

Almost any marketing person worth his or her salt will tell you that marketing is not creative unless it sells.

Advertising legend Leo Burnett used to remind his staff that a person can be creative by coming downstairs with his or her socks in their mouth—but what’s the point?

There must be a reason for your creativity, and your creativity should never detract from your message.

The Creative Plan…

A creative strategy is similar to a marketing plan but is limited to the marketing materials only—and directed solely at their content.

A creative plan can be written in as little as three sentences which detail:

The purpose of the creative messageHow the purpose will be achievedThe mood, tone, or personality of the advertising

Developing the Creative Plan…

Once you’ve selected the marketing media and weapons that can propel you to your goal, be sure you use them in an orderly, logical manner.

This can best be accomplished by the third and final section of your marketing plan: the marketing calendar.

A marketing calendar indicates whether or not you can use these methods properly because it forces you to come to terms with the costs and realities of the media you select.

Your Marketing Calendar…

In some cases you may need a more in-depth marketing plan.

This plan can be structured in the following format.

Executive SummaryChallengesSituation AnalysisMarket SegmentationSelected Marketing StrategyShort & Long-Term ProjectionsConclusionAppendix

A More Complex Plan…

The executive summary is simply a summary of the marketing plan.

It should highlight the main points of your plan.

The challenge section of the marketing plan should include a brief description of the product that will be marketed.

The challenge should also include associated goals such as sales figures and strategic goals.

Executive Summary & Challenge…

The situation analysis should include the following:

Company Analysis - Goals, culture, strengths and weaknesses.

Customer Analysis - Number and type of customer, value drivers and decision process.

Competitor Analysis – Market position, strengths, weaknesses and market share of competitors.

Situation Analysis…

The situation analysis should include a section on collaborators such as subsidiaries, distributors, etc.A SEPTE may also be included in the situation analysis.A SEPTE analysis will help in measuring the:

Social and cultural environmentEconomic environment Political and legal environmentTechnological environmentEnvironmental issues

Situation Analysis…

A SWOT analysis is the last section of the situation analysis.

This type of analysis helps to determine internal and external environmental factors.

The internal factors are the strengths and weaknesses of the business.

The external factors are the opportunities and threats in the market.

SWOT Analysis…

The purpose of the market segmentation section is to help describe the segment(s) of the market you are targeting.

Included in this segmentation are:

A description of the target marketPercent of sales for this groupWhat they wantHow they use the productSupport requirementsHow to reach themPrice sensitivity

Include a segment analysis for each market segment you are targeting.

Market Segmentation…

This section of the marketing plan should include a discussion of the strategy you have selected.

It should include decisions you have made regarding each of the 4 P’s (product, price, place, and promotion).

Be sure to include things such as brand name, scope of product line, list price, payment terms, distribution channels and advertising issues in this section.

Selected Marketing Strategy…

The short and long-term projections should include immediate and future desired results and how these results will be achieved.

This section may also include a forecast of revenues and expenses related to the plan.

A conclusion should be placed at the end of the plan to summarize the plan’s contents.

Any other information that may pertain to the marketing plan should be paced in the appendix.

Finishing Up your Plan…

The Father of Modern Management, Peter Drucker emphasized the importance of marketing when he said:

“There are only two functions of a business: marketing and innovation.”

Remember, there is no business without first a customer.

Just How Important is Marketing?

SmallBizU Online eLearningwww.smallbizu.org

Christene Swanepoel

www.christene-marketing.info