agenda • Remember – assignment 3 due next week • Marketing (1) • Explain the role and importance of marketing. • Marketing plans (for your assignment) • Why? • What do they look like • How do you find the required material • Lets review a couple of samples • Marketing pitch (for your presentation)
Marketing – role & importance • Role • The process by which a product or service is introduced and promoted to potential customers • use marketing strategies to create product or service *awareness*. • As awareness becomes a reality, it is also the point where new customers start to spread the word, telling friends and family about this amazing new product they discovered. • Marketing builds brand name recognition or product recall with a company. • importance • Attracting customers will be one of your largest challenges • Marketing is an investment in future sales. • BUT… • In its first year, a company might spend as much as half of its sales on marketing programs. • After the first year, a marketing budget can reach as much as 30 percent--sometimes more--of the annual sales.
Marketing plan • Marketing Starts with Your Customers! • Your marketing plan details how you intend to meet your customers’ needs and communicate the benefits of your products or services to them. When deciding about market positioning, pricing, promotions, and sales, your customers should be top of mind. • Your marketing plan should describe 1) how you will segment your target market, 2) how you will position your products or services compared to your competition, 3) what your pricing strategy will be, and 4) how you will effectively reach and influence your customers. http://www.smallbusinessbc.ca/starting-a-business/how-write-a-marketing-plan
1) how you will segment your target market (1) • Your target market is a group of customers that has a similar need for a product or service, money to purchase the product or service, and willingness and ability to buy it. • To identify your target market and best serve your market, you need to: • Know your customer • Understand what your customers needs • Why they buy • Because you have limited time, resources, and budget, you cannot be everything to everyone. To effectively reach customers, you need to segment your target market into one primary market on which you focus most of your energy, and at most three secondary markets.
1) how you will segment your target market (2) • You can segment your target market along these key characteristics: • Demographic: Who are your customers? Include information such as: • Age/ Gender / Family size • Family life cycle (single, married with or without kids, divorced) • Income / Occupation / Education • Religion / Nationality / Ethnicity • Geographic: Where do they live? Include information such as: • Their country • Region (e.g. Pacific, Prairies, Eastern seaboard) • City and density (rural, urban) • Climate • Psychographic: Why do they buy? Include information such as: • Social class (lower, middle, upper) • Lifestyle (leisure activities, exotic vacationer, saver) • Personality (gregarious, authoritarian, ambitious)
2) Your market positioning • Positioning is the image of your product or service that you create in the mind of your target market. Your goal is to create an image that’s unique, differentiated, and definable in the mind of your customers. To position your product or service, try the following: • It’s essential that all of your marketing materials support the position or image you are creating. • It’s also critical for you to know your present and potential competitors, both direct and indirect. Examine their strengths and weaknesses relative to yours. This will help you select a market position that provides a competitive advantage. • Your overall position should emphasize those factors that your customers value most, and those which make you stand out from your competition.
3) Your Pricing Strategy • Your customers' ability and willingness to buy. Ability to pay is determined by your customers’ income level. Willingness to buy is determined by your customers' taste, need, perceived value, and where your products and/or services rank on your customers' level of importance. • Perceived value of your product or service. You can determine the perceived value of your product or service by asking your customers how much they would be willing to pay for the same service in a different setting. Or, if you are contemplating adding a new feature or benefit to your product or service, ask them how much they would be willing to pay for the improvement. It is perceived value that decides the price that your customers are willing to pay. • Your costs. Your prices must cover both your fixed and variable costs, and allow you a reasonable margin for profit. • Your competition. How do your prices compare to similar products and/or services offered by your competitors? Do you offer extra features or benefits for which you can charge a premium? Have you clearly differentiated your business and your products and services from those of your competitors (both direct and indirect)?
4) Your Promotion Strategy • Promotion is the activity of informing, persuading, and influencing your customers’ purchase decisions. • The type and scope of promotional activities that you need to undertake will depend on what the promotion is intended to do, and what goals and objectives you want to achieve. There are a number of reasons for promotional activities: • here are the general types of promotional activities (aka advertising): • Sales promotion. Sales promotions focus on short-term incentives to encourage sales of your products and/or services. • Publicity and Public Relations. Also generally known as PR, publicity and public relations exercises expose your company to the public: • Personal Selling. This type of promotion involves a direct, face-to-face relationship with your customer. It includes explaining or demonstrating the features and benefits of your products and/or services in an attempt to persuade the customer to buy.
Some examples • http://www.mplans.com/computer_consulting_marketing_plan/executive_summary_fc.php • http://www.mplans.com/organic_bakery_marketing_plan/marketing_vision_fc.php
Marketing pitch • An example: http://www.youtube.com/watch?v=ADd-g5E9UcM • Between 30-60 seconds • Components: • a memorable introduction, • the benefits and solutions you provide, • and what makes you unique. • Your pitch can then be adjusted to the individual, depending on who they are. Define yourself in a way that will elicit interest, such as increasing profits, saving money, specific expertise, prompt service or solving a particular problem. Use whatever sets you apart.
10 tips for perfecting your pitch • Be concise • Solve a problem • Tell them what they want to hear • Speak in plain english • Grab the listeners attention • Ask qualifier questions • Tailor your pitch to your audience • Show your passion • Conclude with a call to action • Tell a consistent story http://www.stengelsolutions.com/tips_10.htm
Four step process for crafting an elevator pitch • Step 1 – Begin with an ACTION PHRASE that is NOT a noun. (”I am a X” — but don’t use a “label” in the blank. You don’t want people to put you in a box.) • Step 2 – Add a one sentence statement about what you DO. (”I do Y” — What do you help people or businesses do?) • Step 3 – Give a statement of the SPECIFIC IMPACT. (”People who utilize my process find Z” — list one or two things from the perspective of your potential employer.) • Step 4 – End with a CALL TO ACTION. (”I am looking to be introduced to A” — be specific! If you ask for something non-specific you are likely to get it. What good is that?) (This is the process devised by sales trainer James Nudelman a.k.a. the Noodle.)
Lets practice • Spent 10 minutes working on your own marketing pitch (for your business described in your business plan) • We will “network” with each other and I will time you – give each party in the conversation 60 seconds to try your marketing pitch. • Then switch and try it again!