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THE MARKETING PLAN

THE MARKETING PLAN. At end of the module the learners can: Describe the unique selling proposition and value proposition that differentiates one’s product/service from existing products/services. Determine who the customers are in terms of the following:

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THE MARKETING PLAN

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  1. THE MARKETING PLAN

  2. At end of the module the learners can: • Describe the unique selling proposition and value proposition that differentiates one’s product/service from existing products/services. • Determine who the customers are in terms of the following: • Target market Customer requirements Market size • Validate the customer-related concerns through the following: • Interview Focus Group Discussion • Observation Survey • Describe the marketing mix (7P’s) in relation to the business opportunity and vice versa: • Product Price People Process • Place Promotion Packaging • Develop a brand name

  3. VALUE PROPOSITION AND UNIQUE SELLING PROPOSITION • Marketing Process • Is knowing the customers • It starts with identifying the customers’ needs where you are tasked to create a meaningful value proposition. • Study the want or desire for you to build a selling proposition.

  4. VALUE PROPOSITION – States why a customer should buy a certain product or service. Customers are very specific when it comes to their needs and desired benefits, so the value proposition should cater to those particular needs. • Thus, value proposition is the major driver in customer purchase service availment. • The entrepreneur should bear in mind that a value proposition has to be direct in addressing the problems of the customers, should have quantifiable benefits, should differentiate itself from the competitors.

  5. TIPS ON HOW TO CREATE AN EFFECTIVE VALUE PROPOSITION • Prepare a situation analysis that details the problem(s) of the customers. • Make your value proposition straight to the point, simple and specific. Has to target major objective. • Highlight the value of the product or service so that customers will easily get what benefits you can provide.

  6. Adapt to the language of your market. • Adapt credibility-enhancing elements such as actual testimonials from customers, partners and other stakeholders, putting specific assurance elements and social acceptability metrics. • Differentiate your value proposition with your competitors. • Ex. Originality, functionalities

  7. UNIQUE SELLING PROPOSITION (USP) • It refers to how you will sell the product or service to your customers. It addresses the customers’ wants and desires. • After the creation of value proposition, you need to figure out how to promote or advertise certain unique features of the product or service that you’re trying to sell. • Product or service characteristics, promotion strategies and tactics, distribution centers and supply chains, pricing, physical attributes or physical evidence, human resources or human capital, and market positioning strategies.

  8. TIPS ON HOW TO CREATE AN EFFECTIVE USP • Identify and rank the uniqueness of the product or service attribute. • You need to choose one or two at the most • The attributes will be your key to success, as this will compel customers to purchase from you and not from your competitors. • Presents the best features of your product or service

  9. BE SPECIFIC • Put details that emphasize the differentiator against the competitors. • This differentiator should be very compelling and should make the customer that they are really getting more value of your product than the others. • KISS (KEEP IT SHORT AND SIMPLE) • Think of a very catchy unique selling proposition in the simplest and shortest way possible.

  10. KNOWING YOUR CUSTOMERS • Marketing research is a comprehensive process of understanding the customers’ intricacies and industry they revolve in. It is one of the most critical tasks of an entrepreneur. • Therefore, no budding entrepreneur should establish a business without undergoing the marketing research process. • The result of marketing research is the entrepreneur’s major investment of a business, as it will lead him or her the most effective strategies to employ.

  11. MARKET SIZE It is the size the arena where the entrepreneurs’ business will play. It is the approximation of the number of buyers and sellers in a particular market. The entrepreneur is required to determine the market size to gauge the vastness of tininess of the market where he or she intends to join. The way to do this is to conduct a strategic marketing research.

  12. First step is to estimate the potential market – the approximate number of customers that will buy the product or avail the service. This is what you call the space or the market universe because this is the total market. Ex. Rice, the staple food for Filipinos, virtually covers the whole country in terms of market size because majority of the Filipinos eat rice.

  13. The second step is to eliminate the customers who are probably unlikely to buy the product or avail the service. Ex. Rice retailing, the entrepreneur can already eliminate socioeconomic classes A, B, and Cbecause most of these customers buy rice in bulk (sacks) or are given freely by some employers.

  14. The last step is for the entrepreneur to estimate the market share, which is plotting and calculation of the competitors’ market share to determine the remaining portion for the new venture. • The entrepreneur should first assess the market situation via surveys, customer reviews, etc. From there, he or she will be able to calculate the number of potential customers that will buy the product or service offered. • Ex. Rice retailing business, because the entrepreneurs already identified socioeconomic classes D and E to be the market size, he or she should plot the number of rice retail businesses within the vicinity and calculate the market share of each.

  15. MARKET SHARE COMPUTATION #47

  16. CUSTOMER REQUIREMENTS • Customers are the lifeblood of the business. • Their thoughts, feelings, and experiences shape the decision of the business. • “Customer is always right” is a mantra that most successful entrepreneurs follow. • Customer requirements – are specific features and characteristics that the customers need from a product or service. Entrepreneurs must be vigilant with the constant change in the customer requirements.

  17. PRIMARY AND SECONDARY TARGET MARKET • Market Intelligence, which includes customer profiling, drives the entrepreneur on what correct strategies and tactics to employ. This can be obtained through meticulous market segmentation process. • Market Segmentation is the process of grouping similar homogeneous customers according to demographic, psychographic and geographic (location) and behavior. • It gives the entrepreneur a holistic and general view of the market group that he or she is serving • Therefore, there will be efficiency and proper logic in implementing marketing strategies and tactics to the chosen market.

  18. DEMOGRAPHIC • Also known as socioeconomic segmentation, is the process of grouping the customers according to relevant socioeconomic variables for the business venture. • Income range, social class, occupation, gender and age, religion and ethnicity. • These data help the entrepreneur target customers accurately and classify their respective needs, wants and desires. • Sources: The internet or any public documents, can be verified by random sampling

  19. Income Range and the Social Class • Most important factors for the entrepreneur to consider because these represent the purchasing power of the market. • Entrepreneur will be able to determine the extent to which the customers can buy or avail of the service • Therefore, he or she will have an idea on how the profitability will look. • According to the report of SWS(Social Weather Stations)is dominated by: • Class D with 60% of the families earning 191,000 per year • Class E with 30% of the families earning 62,000 per year • Class C with 9% of the families earning 603,000 per annum • Class AB only 1% of the families earning 1, 857,000 per annum

  20. Occupation – should be considered not just to determine the customers’ income but also their daily routine where goods and services can be properly positioned. • Gender and Age Group – are the data must be mined because the life cycle of customers and their gender influence their buying behavior.

  21. Religion and ethnicity – it should be taken to account because these affect the way they buy products or avail of services. • Ex. Food choices, events and holidays, traditions and beliefs, spending habits, and conservativeness. • The entrepreneur should include demographic items that he or she thinks are relevant to the chosen business so that he can accurately align the worthwhile products or services to the customers.

  22. PSYCHOGRAPHIC • Psychographic segmentation is a process of grouping customers according to their perceptions, way of life, motivations and inclinations. • PERCEPTION – is a process wherein an individual receives external stimuli using the five senses; hearing, touching, smelling, seeing and tasting. • The customers’ way of life will give an entrepreneur an overview of what product or services can best suit problems of the customers that happening on a daily basis.

  23. A person’s motivation can either be physiological or psychological. • Physiological - involve the needs of the person (food, clothing, shelter • Psychological – involve customer’s preferences (like and dislikes) • Motivation are also affected by their aspirations and deprivations. • Aspirations are what the customer wants to achieve (inner peace, financial stability ,work – life balance. • Deprivations involves the customer’s recognition of certain voids to fill (lack of financial security, lack of love, lack of knowledge.

  24. Customers’ Inclinations involve preferring one product over another as a result of gaining a refreshing experience when using the product, possibly due to the product’s unique features or due to it gives more value than the other products. • Inclinations also encompass the customer’s personal preferences. The entrepreneur must be aware of what makes the customers buy the products, so he or she will know how to segregate the customers based on their way of life.

  25. GEOGRAPHIC • Geographic segmentation is grouping customers according to their location. • Culture, beliefs, preferences, politics and lifestyle of a certain geography. • Examples: • Meat Products – Region 3, 4 (Region ARMM, 12) • Taxi – Metro Cebu, (Bohol)

  26. BEHAVIORAL • Behavioral segmentation is the process of grouping the customers according to their actions. • These behaviors are instigated by • Occasions (Christmas, Valentines) • Desired benefits (Wash, Dry, Press Services) • Loyalty (rewards) • Usage of products or availment of services. • MARKET AGGREGATION - it targets a broader market because product or service that the business offers is suited for undifferentiated market such as fruits, vegetables, rice, water, etc.

  27. TALKING TO THE CUSTOMERS • Marketing Research is methodical: • Solid Objectives • States the research purpose • Identify the appropriate research activities, tools, and samples • Proper Timing for Research Execution • To get the maximum results • Geography – determine the behavior of the target market • Establish a market design • Implementation of the aforementioned methods • Depending on the objective, responses can either qualitative or quantitative

  28. COMMON METHODS OF COLLECTING DATA • INTERVIEW • Most reliable and credible ways of getting relevant information from the target customers. • Unstructured Interview is an informal type of interview and does not follow a specific set of questions. It produces qualitative data. • Structured Interview employs a specific set of questions and produces quantitative data. A prearranged questionnaire with specific questions usually answerable by yes or no, forced ranking, multiple choice. //challenges//

  29. FOCUS GROUP DISCUSSION • Captures qualitative results • Process of mining experience and insights about a specific product or service • Generate relevant concerns and issues of customers such as their views and inclinations toward a product or service. • Advantages; combined insights, more spontaneous and enthusiastic interaction. • Disadvantages; obtains qualitative data only, requires more time, biases

  30. OBSERVATION • Practical method of generating ideas • Documents the behavioral patterns of people of objects or events without necessarily requiring respondents participation. • Raw state without biases and pretentions, accurate results and process • It can be performed by either HUMAN or a MACHINE OBSERVER • Human observer records information as it occurs or as it happens using the five senses • Machine observer employs an equipment (video camera, computer) to record the information needed

  31. OBSERVATION CONDITIONS • If the person, object, event is indeed observable (load), practical • If the person does the activity regularly or the event happens on a regular basis. • If doing an interview or FGD is becoming intrusive of the privacy of the person • If the subject of the observation does not take too long to produce relevant information. (beverages, car)

  32. TRADITIONAL AND ONLINE SURVEYS • Taking survey is essential in quantitative research • Process of getting answers from a sample respondents derived from a particular population • Questionnaires can be distributed and answered verbally, by writing, or through the internet.

  33. SAMPLING TECHNIQUES A SAMPLE is a percentage of a specific population carefully chosen by the researcher to generally represent the whole population. Census – small population, include the whole population in the research project

  34. SAMPLING TECHNIQUES • PROBABILITY SAMPLING • A technique wherein samples are given equitable chances or nonzero chances of being selected from a population. • Applies Randomization, wherein it assures every sample has an equal representation for the selection process. • Advantage of probability sampling is that it can be quantified. • NONPROBABILITY SAMPLING • Does not give the samples equal chances of being selected, because samples are selected according to accessibility or personal choice of the researcher.

  35. SAMPLE SIZE • The research must calculate first the appropriate sample size in conducting surveys. • QUESTIONNAIRE BLUEPRINT • Be specific and direct • Be flexible with respondents’ convenient way of answering the questionnaires. • Ensure that each question is necessary and not repetitive. • Always put yourself in the shoes of your respondents • Make sure that questions are arranged in coherent order • The questionnaire should look professional

  36. THE MARKETING MIX: THE 7PS of MARKETING The marketing mix is a widely accepted strategic marketing tool that combines the original 4Ps (Product, Place, Price, Promotion) with an additional 3Ps (People, Packaging and Process) in formulating marketing tactics for a product or service. Entrepreneur must use 7Ps model to do the following: Conduct a situation analysis, SWOT or competitiveness analysis; and come up with marketing strategies and tactics.

  37. PRODUCT • A product is any physical good, service or idea that is created by an entrepreneur or an innovator in serving the needs of the customers and addressing their existing problems. • The product or service should not be created before finding the right customers, because this is very risky and the resources and time might be put into waste.

  38. THREE LEVEL CONCEPT OF PRODUCTS OR SERVICES LEVEL 1: CORE BENEFITS OF THE PRODUCT OR SERVICE LEVEL 2: PHYSICAL CHARACTERISTICS OF THE PRODUCT OR SERVICE LEVEL 3: AUGMENTED BENEFITS OF A PRODUCT OR SERVICE(additional benefits, differentiator, loyalty card)

  39. PLACE • Refers to a location or the medium of transaction. A strategic direction depends on the nature of the business and the primary target market. • Physical location, must research about the area’s population, the traffic, etc. Cyber-location must use web analytics data to understand the web site performance, (number of visitors, duration of their stay) • Must provide pleasant experience in buying the products or availing of the service. • Devise a set of criteria in choosing the right location with certain objectives.

  40. PRICE • Price is the peso value that the entrepreneur assigns to a certain product or service after considering its costs, competition, objective, positioning, and the target market. • COMMON PRICING STRATEGIES • BUNDLING – refers to two or more products or services in one reduced price. • PENETRATION PRICING – refers to setting low process to increase market share, but eventually increase the price once the desired market is achieved. • SKIMMING – prices are initially high and then lowered to offer the product or service to a wider market.

  41. COMPETITIVE PRCING - this refers to benchmarking prices with the competitors. • PRODUCT LINE PRICING – refers to pricing different products or services within a parallel product array using varying price points. (LEDTV over LCD TV) • PSYCHOLOGICAL PRICING – considers the psychology and positioning of price in the market. (99) • PREMIUM PRICING – refers to setting a very high price to reflect elitism and superiority.

  42. OPTIONAL PRICING – refers to adding an extra product or service on top of the original to generate more revenue. (meals on top or air fare) • COST-BASED PRICING – The basis of markup is the cost of the sales. Ex. BukoJuice 10+4=14///20///6 • COST PLUS PRICING – The markup is based on a certain percentage of cost. EX. 50% 10+4=14*50%=7//14+7=21

  43. TWO CLASSIFICATIONS OF COSTS • VARIABLE COSTS OR CONTROLLABLE COSTS – These costs are directly proportional to the number of products manufactures or to the number or services performed. EX. CAR WASH • FIXED COSTS OR UNCONTROLLABLE COSTS - these cost are not directly proportional to the manufacturing of a product or to the performance of the service. These are usually the cost of equipment, employee remuneration, rental cost, and utilities. These are considered fixed costs because the business will still incur these cost whether or not they provide more or less.

  44. GENERAL PRICING GUIDELINES • Do not price the product or service below its cost • Monitor competitors prices, and ensure that your prices are at par with them. • Align prices with the other 6Ps • Implement price strategies that are relevant to your market segment. (sachet) • Align prices with your business objectives

  45. PROMOTION • It involves presenting the products or services to the public and how these can address the public’s needs, wants, problems, or desires. • Primary target market should be identified because it will be the main audience. The main goal is to gain attention. • A strong INTEGRATED MARKETING COMMUNICATION PLAN (IMC) should be devise to deliver the compelling messages effectively.

  46. KEY MESSAGES FOR PROMOTION: • Value proposition or Unique Selling Proposition • Product or Service Image • Business Image • Business Values and Philosophy • PROMOTIONAL TOOLS • ADVERTISING – a type of communication that influences the behavior of a customer to choose the product or service of the entrepreneur over the competitors.

  47. OBJECTIVES OF ADVERTISING • Informing, educating, and familiarizing the public with the product or service offerings • Building a trustworthy image; and • Increase sales • Entrepreneurs can advertise thru: • Television • Radio • Internet • Mobile Phones • Print • Out-of-hoe

  48. SELLING - this is the act of trading a product or service for a price or fee. Identify market, once identified you to research to know their profile and behavior. Monitor customers’ satisfaction or after sales must be practiced. • SALES PROMOTION – these are short – term promotional gimmicks wherein practical incentives and appealing activities are incorporated to entice the customers to buy the product or avail the service. • Sales discount • Raffles • Contest and Games • Rewards • Promo Items • Sample distributions or free taste

  49. PUBLIC RELATIONS • These are image-building initiatives of the entrepreneur to make name of the business reputable to stakeholders, such as the target customers, government agencies, business partners, media and the public. • Press Conferences • Launching Events • Social Responsibility Events • Web Public Relations

  50. PEOPLE • People play a vital role in serving customers. • With influx of various competing products and services, one of the major differentiators is how people or employees make a difference in the lives of the customers. • Potential employees also need to be well-compensated and provided with benefits. • The entrepreneur must list the criteria of the following job offers, as well as the requirements such as academic background, job experience, skills or expertise, etc.

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