Download Making Startup Effec..

Unit 1.4
Making the Start-up
Effective
Customer
Focus
What is a customer?
A customer is anyone
who buys a product
– either a good or a
service – from a
business
What is Customer Service?
The way
businesses
look after
their
customers
Meeting Customer Needs
Using the five people from page 1,
cut out their pictures and at the
side write down five items they
might buy in a supermarket.
Competition is heating up!
• Businesses can’t be complacent about their
customers
• With e-commerce and email marketing businesses can reach customers 24/7
• Technology allows products to meet
individual customer needs more closely
• Increasing customer confidence about
complaining – customers expect high
standards
• Social media networks make it easier for
word-of-mouth recommendation (or not!)
Why Customer Focus is
Important
• Businesses can only survive if they have
customers
• A business must have enough customers
willing to pay the price that is charged
• If customers will pay the price charged, the
business will make a profit
Customer Focus
Identifying Needs
• Businesses must find out what their customers
want
What types of people would buy these sunglasses?
Customer Focus
Anticipating Needs
• Businesses must try and understand what customers
want in the future – fashions change over time.
2009
1960s
1970s
Customer Focus
Meeting Customer Needs
• Businesses must know what customers want
and produce goods/services that meet those
needs.
Where would these grannies go for lunch?
True: stand up
False: stay seated
People who buy goods and/or services are called
customers.
True
Businesses can survive if they do not have customers
False
To be successful a business must sell their product at a
price that a customer is willing to pay
True
A business needs to carry out market research to find
out what their customer needs are.
True
A consumer is someone who buys a product.
False
Some ways that customer needs
differ
• Benefits they want (quality, style)
• Amount they are able to or willing to pay
(budget, expensive)
• Quantities they buy (bulk buy or one-off
purchase)
• Time and place that they buy (instant, online)
The Car Market – different
benefits
What types of people would buy these cars?
Fashion Retailing – the amount
people are willing to pay
What price
would customers
pay for a dress?
Quantities that are bought
What quantities are people likely to buy in these stores?
Time and Place People Buy
Shopping Centre
Buying Online
Markets
Where can people go to
do their shopping?
Ways that Customer Needs Differ
Benefits
Different customers want different types of quality and style.
Refer to the pictures and explain examples.
Amount People are Willing to Pay
Some customers will pay high prices, others will want cheaper
goods. Refer to the pictures and explain examples.
Quantities
Some customers want to buy in bulk, others will purchase single
items. Refer to the pictures and explain examples.
Time and Place People Buy
Customers have different preferences as to where and when they
buy goods and services. Refer to the pictures and explain
examples.
Benefits
Example
Different customers are interested in buying different types of
products with different qualities and benefits. For example, in the
car market, some customers want a car for their family and so
they need plenty of space and a large boot. Other customers are
interested in buying a sports car that has plenty of gadgets.
Other customers are interested in
how the car looks and how fast it
will go.
An example of a family car.
The Marketing Mix
The marketing mix covers the
way a business uses product,
price, place (distribution) and
promotion to market and sell
its product.
The Four P’s
The marketing mix is often referred to as the Four
P’s:
Product
Price
The product or service that
the customer buys
How much the customer pays
for the product
Place
Promotion
How the product is
distributed to the customer
How the customer is found &
persuaded to buy
Blending the Mix
• The marketing mix blends
together the elements of a
marketing strategy
• The mix must be consistent
with the product and its target
market
Example – launch of iPhone
Product
Three products in one – phone,
iPod, web browser, apps
3G broadband connection
Innovative design
Place
Sold in stores and on-line
Price
Depends on phone tariff & model
£350-£750 range
Price falling
Promotion
Web & TV advertising
Billboards
Stuart Hughes makes his money
By designing exclusive elite
Gadgets.
Over 500 diamonds. The “Home” button
has interchangeable pink and white
diamonds. These two diamonds alone
are worth £4m. It will cost you £5m to
buy.
271 grams of 22-carat gold and
136 diamonds. The gold iphone
will cost you £1.92 million.
Memory Challenge
Marketing Mix
Price
Customer
Promotion
Customer Service
Product
Profit
Market Research
Customer Needs
Place
Over to you!
The Marketing Mix:
The Four P’s
The product or service that
the customer buys
Product
How much the customer pays
for the product
Price
How the product is
distributed to the customer
How the customer is
persuaded to buy
Place
Promotion
What is a Product?
A product is
anything that is
capable of
satisfying customer
needs
The Importance of Product
Product
Price
Promotion
Place
The product needs to exist for the other elements of
the mix to happen.
Businesses must decide the purpose of the product.
They must also decide who is likely to buy the
product.
The Chair Market
Products change over time …
Due to
• changing tastes and fashion
• new ideas, innovations and use of new technology
1950
2009
Products that have significantly
changed over time
What is price?
• The amount charged
for buying a product
• Everything that a
customer has to give
up in order to acquire
a product or service
Many factors affect price
• Costs of production
eg a business must
sure they charge a
price that covers the
cost of making the
product
• Competitors’ prices
• What customers are
willing to pay
• Age of the product
• State of the economy
• Customer demand
• Business objectives
James Dyson is at it again …
innovation …
http://www.msnbc.msn.com/id/21134540/vp/33306438#3330643
8
http://www.talktalk.co.uk/video/21118/news/Dyson-no-longersucks,-it-blows/#21118
What is his USP (unique selling point)?
Where is he intending to sell the product and
why?
Why is he charging nearly ten times the normal
price for the product?
Dyson Bladeless Fan
• USP – no blades,
childproof, better air
flow
• High price - market
skimming – taking
advantage of “early
adopters”.
• Price: £199
• Target market – Japan
– hotter weather,
Japanese like new
gadgets
Pricing Strategies
Different pricing strategies have different
names.
Complete the activity by matching the
pricing strategy to the definition.
Complete the 10 questions by identifying
the most likely pricing strategy being
described.
Stick the sheets into your exercise book.
Pass the Buck:
I will give you a topic. In turn, each member of
your team must write down TWO things about the
topic. Fold the paper over and pass the paper to
the next person in your team – they then write
down TWO things. You get a point for every
different issue you write down.
Pass the Buck
Pricing Strategies
Customer Focus
(Keeping customers satisfied)
Entrepreneurs
Invention and protecting
your ideas
The Marketing Mix:
The Four P’s
The product or service that
the customer buys
Product
How much the customer pays
for the product
Price
How the product is
distributed to the customer
How the customer is
persuaded to buy
Place
Promotion
Place:
The aim of effective distribution
To make products
available in the right
place at the right time
in the right quantities
Issues about place (distribution)
• How can a business
ensure that its products
reach existing and
potential customers?
• How and where do
customers prefer to buy
the product?
• How important are
factors such as stock
availability, price, speed?
Who gets involved in
distribution
Retailer
Producer
Wholesaler
Other Distribution Channels used
Internet
Market Stalls
Mail Order Catalogues
Door-to-door sales
Promotion =
marketing communication
Communication
techniques aimed at
informing, influencing
and persuading
customers to buy or use
a particular product
Many Uses of Promotion
• Increase sales
• Attract new customers
• Encourage customer
loyalty
• Encourage trial
• Create awareness
• Remind potential
customers
• Reassure new
customers
•
•
•
•
Change attitudes
Create an image
Position a product
Encourage brand
switching
• To distribution (e.g.
sales by retailers)
Main methods of promotion
• Advertising
• Sales promotion
Other Methods:
• Personal selling
• Public relations/publicity/
Sponsorship/
Merchandising
• Direct marketing
“AIDA” Advertisement
Design
Create Action
Gain Interest
Create Desire
Get Attention
Get Attention?
Gain interest?
Create desire?
Create action?
“Shock”
Do these adverts:
Tactics:
Create Action?
Benetton
And “Fur
Gain Interest?
Is Dead” (Sophie
Create Desire?
Ellis Bextor)
Get Attention?
Some adverts portray
a message …
… but use few words …
… to attract attention
Use of text and colour
may be used to attract
attention …
… the content of the
wording may create
desire
Some adverts are informative:
• provide information on a topic
• provide contact details/
opening times …
… but still try to attract attention
Pass the Buck:
I will give you a topic. In turn, each member of
your team must write down TWO things about the
topic. Fold the paper over and pass the paper to
the next person in your team – they then write
down TWO things. You get a point for every
different issue you write down.
Pass the Buck
The Marketing Mix
Methods of Distribution
Uses of Promotion
10 Questions
The Marketing Mix
Customer Service
Downside
Patent
Enterprise
Innovation
Blue Skies Thinking
Market Research
Unique Selling Point (USP)
Trademark
My Marketing Mix
Product
Type of product:
Pen that also
works as a USB stick
Name of produce:
“Memory Pen”
Types of people who will buy my pen:
• Mainly men
• People who move around with their work
• Students
Price
Price I will charge:
£20
Pricing strategy I will use:
• Cost plus pricing – I will work out how
much it costs to make and then add a “markup”.
Place
Where I will sell my pen:
• Retail stores: PC World, Staples, WH Smith,
Supermarkets such as Tesco
• On the internet: via websites
Promotion
Methods of advertising I will use:
• Magazines: Computer Weekly, PC Magazine,
Computing
• Newspapers: The Sun, The Daily Mail