Entrepreneurship and Small Business Management

1. Entrepreneurship and Small Business Management Chapter 7 Developing the Right Marketing Mix and Plan

2. 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, to your business.

3. 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.

4. 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?

5. 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

6. 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.

7. 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.

8. 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.

9. Place • 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.

10. Promotion • Promotion—use of advertising and publicity to get your marketing message to your customers. • Advertising—purchased promotion (billboards, TV ads, magazine ads, etc.) • Publicity—free mention of a company, person, or product/service in the media

11. 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 Promotion Methods

12. Philanthropy: The Fifth P • Philanthropy—a concern for human and social welfare, expressed by giving money through charities/foundations • Foundation—not-for-profit organization that manages funds donated to help people and social causes • Philanthropy creates goodwill—favorable reputation, name recognition, and positive customer relations

13. 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

14. 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. • Detail the advertising plan.

15. Marketing Plan Components

16. Marketing Plan Components

17. Marketing Plan Components

18. 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 per year) divided by gross profit per unit