Entrepreneurship and Small Business Management Chapter Developing the Right Marketing Mix and Plan Ch 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 Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 07458 Ch 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 Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 07458 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? Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 07458 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 Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 07458 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 Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 07458 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 Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 07458 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 Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 07458 Place  The type of business affects the location that works best    Who are your customers? Where they shop? Goal: Find a location affordable for you, yet also convenient for customers Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 07458 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 Entrepreneurship and Small Business Management, 1/e 10 © 2012 Pearson Education, Upper Saddle River, NJ 07458 Promotion Methods             Advertising specialties Banner ads Billboards Blogs Broadcast media Brochures Business cards Catalogs Coupons Direct mail Directories Flyers Entrepreneurship and Small Business Management, 1/e 11            Networking Newsletters Print media Promotional clothing Public speaking Samples/demos Special events Sponsorships Telemarketing Toll-free numbers Web sites © 2012 Pearson Education, Upper Saddle River, NJ 07458 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 Entrepreneurship and Small Business Management, 1/e 12 © 2012 Pearson Education, Upper Saddle River, NJ 07458 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 Entrepreneurship and Small Business Management, 1/e 13 © 2012 Pearson Education, Upper Saddle River, NJ 07458 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 Entrepreneurship and Small Business Management, 1/e 14 © 2012 Pearson Education, Upper Saddle River, NJ 07458 Marketing Plan Components Components StandAlone Plan Opportunity Analysis: X • Industry Analysis X • SWOT Analysis X • Environmental Analysis X • Competitive Analysis X Entrepreneurship and Small Business Management, 1/e 15 Bus Plan Section © 2012 Pearson Education, Upper Saddle River, NJ 07458 Marketing Plan Components StandComponents Alone Plan Marketing Analysis: Bus Plan Section X X • Overall Market and Target X X • Goals and Objectives X X • Marketing Strategy X X Product/Service X X Pricing Strategy X X Promotion Strategy/Plan X X Place/Distribution X X Philanthropic Plan X X Entrepreneurship and Small Business Management, 1/e 16 © 2012 Pearson Education, Upper Saddle River, NJ 07458 Marketing Plan Components Components StandAlone Plan Marketing Analysis (continued): • Future and Contingency Plans X X X X Financial Projections X Implementation Time Line X Measurement X Supplemental Materials X Entrepreneurship and Small Business Management, 1/e 17 Bus Plan Section © 2012 Pearson Education, Upper Saddle River, NJ 07458 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 Entrepreneurship and Small Business Management, 1/e 18 © 2012 Pearson Education, Upper Saddle River, NJ 07458  ... philanthropy, to your business Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 074 58 Ch Performance Objectives (continued)  Understand the importance... for your business?  Promotion—How will you advertise and publicize your product? Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 074 58 Create... Pricing Branding Delivery Key to successful branding: focus on the product’s primary benefit Entrepreneurship and Small Business Management, 1/e © 2012 Pearson Education, Upper Saddle River, NJ 074 58