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D. Marketing a Small Business

D. Marketing a Small Business. 6.00 Explain the fundamentals of marketing in a small business. 6.02 Explain market identification. Marketing Concepts.

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D. Marketing a Small Business

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  1. D. Marketing a Small Business 6.00 Explain the fundamentals of marketing in a small business. 6.02 Explain market identification.

  2. Marketing Concepts • Market: The group of potential customers who have similar needs/wants, sufficient buying power, and the willingness to give up a portion of that buying power in order to buy your product/service.

  3. Marketing Concepts • Market Segmentation: Dividing the total market into smaller, well-defined groups with similar wants/ needs and similar key characteristics.

  4. Marketing Concepts • Target Marketing: Identifying market segments with the greatest potential for sales and focusing marketing decisions on satisfying the individuals that make up these segments.

  5. Marketing Concepts • Target Market: The group or groups of potential customers identified as most likely to patronize the business and buy its products.

  6. Market Segmentation • Geographic segmentation: Dividing markets by where customers are located. • North or South • Rural or Urban • City or Suburbs • Mild/harsh Climate

  7. Market Segmentation • Demographic segmentation: Dividing markets by characteristics people have in common. • Age • Income • Education • Occupation • Ethnic background • Life stage

  8. Market Segmentation • Psychographic segmentation: Dividing markets by identifying common interests, attitudes, values, lifestyle, or personality traits among the individuals that constitute the market.

  9. Market Segmentation • Behavioral segmentation: Dividing markets by identifying common responses to products and product features. • Rate of use • Occasion response • Loyalty response • Benefits derived

  10. Characteristics of a Market Segment • Measurable: Potential sales income must be measurable. • Substantial: Potential sales income must be substantial enough to warrant the investment required to reach the segment. • Reachable: Individuals in the segment must be reachable with available promotional tools. • Responsive: The likelihood of the segment responding positively to promotional efforts must by high enough to warrant the investment.

  11. Market potential: The total amount of revenue that can potentially be generated in a specific industry or market. Market share: The percentage of the total sales revenue captured by a firm within a market or industry. Market position: The perceived standing of a firm or a product in the minds of customers as compared to the competition.

  12. Play to the competition’s weaknesses. Lead with your strengths. Look for underserved markets. Target different market segments. Regardless of the strategy, a company must focus efforts on communicating its position to its target market. It is in the best interest of an organization to plan its position in the market. Positioning Strategies

  13. Average Market Share Total sales volume/number of competitors in a given market.

  14. Competition Analysis • When developing a competition analysis for your business plan consider: • Who are your 5 nearest direct competitors? • Who are your indirect competitors? • How are their businesses performing? • What have you learned from their operations and advertising? • What are their strengths and weaknesses? • How does their product/service differ from yours?

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