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Business Planning Basics Tooele SBDC 4 Week Program. Week 2 Marketing. Ryan Murray, MBA, CBA Elora McGovern. After this class you should:. Understand the relationship between your market and your sales and how to create a successful company

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business planning basics tooele sbdc 4 week program

Business Planning BasicsTooele SBDC4 Week Program

Week 2

Marketing

Ryan Murray, MBA, CBA

Elora McGovern

after this class you should
After this class you should:
  • Understand the relationship between your market and your sales and how to create a successful company
  • Understand your competition and develop a strong competitive advantage for your business
  • Know the basics of market research and how to do it correctly
  • Become familiar with the 5 steps to marketing
  • Correctly identify a good market opportunity
  • Be able to create a feasible marketing strategy
3 keys to success
3 Keys to Success
  • Management Team
    • Do I have the right people in place doing the right things
  • Market Opportunity
    • Is there a demand for my Product/Service in my market area
  • Marketing Strategy
    • Is my business positioned to seize the market opportunity
      • (do a have a legitimate competitive advantage and is the market aware of it)
marketing is a function of roi
Marketing is a Function of ROI

Sales

Product Service

Market

Profits

“Sales is a function of your market, marketing drives sales”

competitive advantage
Competitive advantage
  • As of April 2011, Google had 65.4% of the market share, Yahoo had 15.9% and Bing had 14.1%. Yahoo and Bing together made up just less than half of what Google had.

http://imprezziomarketing.com

competitive advantage1
Competitive Advantage
  • Olympics!
  • Win the gold by tenths of a second
  • Watch: 2008 Men’s 4X100 freestyle relay 2008
what is
What is
  • Competitive Advantage?
  • Value?
  • Differentiation?
  • Core Competencies?
competitive advantage2
Competitive Advantage
  • A superiority gained by an organization when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. Competitive advantage results from matching core competencies to the opportunities.
value in marketing
Value in Marketing
  • The extent to which a good service is perceived by its customer to meet his or her needs or wants, measured by customers willingness to pay for it. It commonly depends more on the customers perception of the worth than on its basic value.
differentiation
Differentiation
  • Result in efforts to make a product or brand stand out as a provider of unique value to customers in comparison with its competitors.
  • Car Dealer
    • “I sell cars.”
    • How is he different from the others?
      • "My name is Mike from Competitive Motors. We've found that there is a lot of confusion in the automotive market today because there have been over 150 new models introduced in just the past three years. We've developed a computer book that profiles everything the buyer wants in a car and in less than five minutes, identifies the models most likely to fit their needs."
core competencies
Core Competencies
  • A unique ability that a company acquires from its founder or develops that cannot be easily imitated. Core competencies are what gives a company one or more competitive advantages, in creating and delivering value to its customers in its chosen field.
  • A secret successful product
    • Competitors secret to great hair: Shampoo. Rinse. Conditioner- leave for 3 minutes. Rinse.
    • My secret: Wouldn’t you like to know? My hair is still better.
what is your competitive advantage
What is your Competitive Advantage?
  • What are you best at?
  • Why will your customers buy from you and not your competition?
  • What can I do for my customers that my competitors do also, but I can do it better and I CAN PROVE IT!
developing your competitive advantage
Developing your Competitive Advantage
  • Erica Olsen– How to Develop your Competitive Advantage
where do you begin
Where do you begin?
  • Think: What are you best at?
    • What makes you greater than your competitors?
  • Solve: Why are you better than your competition?
understanding competition
Understanding Competition

Competition is defined as “ANYTHING that eats into your revenue”

4 Types of Competition

  • Direct Competition
    • Businesses that provide the same product/service
  • Indirect Competition
    • Businesses that provide a different product/service that meets the same need
  • Open Market
    • Customers in your market area that should be buying your product /service but aren’t
  • Yourself
    • Customers that already buy from you but should or would buy more
fruit tree theory
Fruit Tree Theory
  • Pick the low hanging fruit first
  • Go for the abundant fruit next
  • (Don’t worry about the other 2)
why market research
Why Market Research?
  • Identifying your target market
  • Decision making guidance
  • Provide fact based analysis
  • Eliminates intuition and emotion
  • Reduces Business Risk
  • Identify opportunities and threats
what to research for
What to Research for
  • Competitor research
  • Research other industries
  • Look at what BIG business are doing
    • Up sale strategies
    • AutoZone phone and shelves strategy
  • Trends
    • What are people talking about?
    • Anti-bulling push
google said so
Google Said So…
  • Be efficient navigating the internet by using reliable sources
    • .com (When was it updated?)
    • .gov
    • .org
    • Blogs and social media sites
    • Wikipedia
getting started
Getting Started
  • Clearly define your key objectives and goals
    • knowing will help you identify your path and keep you from chasing squirrels
    • Target Market or Location for your business?
  • Type of research and data
    • Surveys, reports or statistics
secondary data
Secondary Data
  • Secondary data—data previously collected for any purpose other than the one at hand
    • Annual reports or other reports within your firm
    • Government departments agencies
    • Periodicals
    • News media
    • University and non-profit organization studies
secondary data disadvantages
Secondary Data Disadvantages
  • Mismatch between the researcher’s unique problem and the purpose for which the secondary data was originally gathered.
    • Who gathered the data?
    • Why was the data obtained?
    • What methodology was used?
    • When was the data gathered?
primary data
Primary Data
  • Primary research is used when specific information is needed. It is data gathered for the first time.
    • Surveys (be effective)
    • Experiment
    • Observation research
    • Mystery shopper
dig deep
Dig Deep
  • Strengths Weaknesses Opportunities Threats
  • SWOT for self/business/industry
  • Identify your competitors
dig deeper with segmentation
Dig Deeper with Segmentation
  • Demographics (Age, gender, family size, life-cycle, income, education, religion, and nationality)
  • Geographic (Areas in the word, city, small town, density, climate)
  • Physiographic(moral values, lifestyle, culture, personality) Facebook! A flaw is assume—look at behavior
  • Behavioral(Occasions, benefits, loyalty, attitude, and user rate) when or how do people buy?
how to put it all together
How to put it all together
  • Don’t over think it, but be creative
  • Utilize “Business English” practices
  • Analyze
  • Always have a sources page
  • Build a mini data base with the work you find while conducting research
  • Yes, it can be tedious, but you will move forward
example
Example
  • http://www.tooelebusiness.org/marketing-and-market-research.html
5 points to market
5 Points to Market
  • Product/Service
  • Relative Price Point
  • Target Market
  • Market Mediums
  • Marketing Strategy
5 points to market1
5 Points to Market
  • Product/Service
  • Relative Price Point
  • Target Market
  • Market Mediums
  • Marketing Strategy

These Become Your Market Opportunity

Your Marketing Strategy is unique to your business, but the Market Opportunity is the same for everyone

5 points to market2
5 Points to Market
  • Product/Service
  • Relative Price Point
  • Target Market
  • Market Mediums
  • Marketing Strategy

These are used to develop Your Marketing Strategy

Your Marketing Strategy is unique to your business, the Market Opportunity is the same for everyone

relative price point
Relative Price Point

$

$$

Relative in terms of your competition

target market
Target Market
  • Is Your Market Big Enough
  • Geographical Area
    • Let’s me know how many people
  • Best Customer Theory
    • (Chet Holmes, Ultimate Sales Machine)
  • Price is a key factor
  • (Why medium income?)
market mediums
Market Mediums
  • Internet
    • Google Ad Words
    • Facebook
    • Youtube
  • Newspaper
  • Yellow Pages
  • Word of Mouth
  • Billboards
  • Direct Mail
  • Etc, etc
mid point homework
Mid-Point Homework
  • Describe your competitive advantage and rate it on a scale of 1 to 5
  • Create a competitor list with their strengths and weaknesses and price point
  • Based on your relative price point, identify your target market in detail
  • Identify whether or not your target market is a small, medium, or large market to sell to (Bonus: calculate the minimum size target market needed for your business)
developing your strategy
Developing Your Strategy

Price

Quality

Differentiation

developing your strategy1
Developing Your Strategy

Price

$

Relative Price Point

$$$

Quality

Differentiation

developing your strategy2
Developing Your Strategy

Price

Quality

Differentiation

developing your strategy3
Developing Your Strategy

Price

  • The key is
  • Being able to beat the competition
  • Serve a market that isn’t being adequately addressed by the competition

Quality

Differentiation

rate your company s competitive advantage
Rate Your Company’s Competitive Advantage
  • Competitive Advantage
  • Rate your company’s competitive advantage from 1 – 5
    • (1 being little to none and 5 being virtually untouchable)

1 through 3: little to no chance of being profitable in the long run

4 or 5: good competitive advantage

discussion points
Discussion Points
  • Market Mediums
  • Marketing ROI
    • Measuring your results
    • Using a “control group” in your marketing
  • Marketing Budgets
  • Marketing Mistakes
    • Not doing it consistently
    • Not budgeting for it
    • Not planning
    • Buying “whatever”
    • Not buying anything
homework
Homework
  • Establish a marketing budget and implement it into your financial forecasting. Make sure that your sales forecast is a function of marketing and write the relation as part of your business plan.
  • Determine whether you are focusing on price, quality, and/or differentiation.
  • If your competitive advantage is below 4, brainstorm with your management team ways to strengthen your competitive advantage.
  • Provide a written description of your marketing strategy. Make sure that it is well enough written that someone outside of the business could implement the strategy based on your description.