Entrepreneurship

Entrepreneurship Chapter 5 Developing the Right Marketing Mix

Marketing Mix = the 4 Ps • Product • Price • Place • Promotion Goal: Bring the right product to the right place at the right price with the right promotion.

Products (and Services) • Products & services are defined by: • Physical attributes • Performance characteristics • Pricing • Branding • Delivery

Focus the Brand • The primary product benefit is “owned” by the company. • Ford’s Edsel – lacked focus, too many features  failure • Ford’s Mustang – tightly focused on target market of 20-30 year olds  success

Ways to Build a Great Brand • Provide high-quality products/services • Maintain high ethical standards • Define the product/service clearly • Treat employees well • Make ads positive & informative • Associate the company with a charity • Be involved in the community

Strategies: • Keystoning: doubling the costs • Cost plus: cost plus profit margin • Penetration: low price early in PLC to gain market share • Skimming: high price early in PLC before competitors enter market • Meet or beat the competition • Mark-ups What Does the Price Tell Consumers About Your Product/Service?

Place • Type of business affects the location that works. • Who are your customers? • Where do they shop? • Goal: Find a location affordable for you yet also convenient for customers.

Promotion • Using advertising + publicity to get your market message to your customers • Advertising (purchased): billboards, TV ads, magazine ads • Publicity (free): mentions in media such as articles, stories on TV, etc.

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 Websites Promotional Ideas

Marketing Materials • Examples include brochures, posters, order forms, business cards, & invoices. • Should reinforce competitive advantage • Serve 3 functions Help you organize your thinking Enable you to teach others in company about the business Enable you to sell product/service

Media • Print • Television • Radio • Web • Provide reach & frequency

Advertising • Paid print advertising includes newspapers, magazines, newsletters, & Yellow Pages & other directories. • Print advertising components • Headline (title) • Deck (subhead) • Copy (text) • Graphics (photos or drawings) • Logo

Publicity • Use media to generate publicity • Mail/fax pitch letter and press release • Pitch letter “pitches” the story of your business • Press release provides facts to answer: who, what, when,where, why, how? • Follow up with phone call

Philanthropy • Giving money, time, advice, skills to help minimize or eliminate social, environmental, or political problems • Foundations are nonprofits that raise funds for charities that assist people, animals, the environment, and other causes. • Many philanthropic foundations were started by entrepreneurs. • Philanthropy creates goodwill: reputation, name recognition, positive customer relations.

Cause-Related Marketing • Inspired by commitment to a social, environmental, or political cause • Simple way to work philanthropy into your business • Examples: • Donate fixed % of revenue to charity • Donate product/service • Encourage employees to volunteer

Marketing as a Fixed Cost • Marketing costs are money that is needed to drive sales. • Should not be budgeted as a percent of sales • Calculate Breakeven Units to determine whether the business is selling enough to cover the marketing costs • Breakeven units = Fixed Costs (per month or per year)/Gross profit per unit

Entrepreneurship