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Chapter 5
Develop the Marketing Plan
The Marketing Concept:
 The belief that consumer wants & needs are the driving force behind any product
development or marketing effort.
 There was a time when marketing decisions were made primarily on investment
reasoning.
 Today, it is based on customer’s needs and wants.
 Consumers are more educated today especially with the birth of the internet.
 Competition has increased particularly in regards to globalization.
 The U.S. has evolved from product-driven to consumer driven market.
 The product is now a small part of the sales concept.
 Smaller business is closer to their customers and stay “in tune” with them more
easily.
Market Research
 A process designed to learn as much about the potential customer as possible.
 A systematic gathering, recording, and analyzing of data about problems relating
to the marketing of goods and services.
Six Steps of Marketing Research
1) Define the question that will be the focus of the research.
2) Determine what Data is needed. Not all data will provide the information
needed.
3) Collect the Data.
 Primary data is original data often collected through surveys and
questionnaires.
 Secondary data is available through chamber of commerce’s,
library, census, community college demographic data, etc.
4) Analyze the data. It should include both the results and interpretation of
the results. Page 98 Table 5-1
5) Implement the data through a plan of action.
6) Evaluate your action plan.
a) Compare demographics to other similar markets.
b) Market research should be ongoing.
c) Knowledge is the result of research.
d) Determination and creativity are necessary for success.
Target Marketing
Page 101 Figures 5-2 & 5-3
Market Segmentation
 Identifying the customer begins with segmentation.
 Small business does not serve mass markets so they must determine which portion
of the market is most likely to purchase their product.
 Niche – The focus is a manageable segment of the market that can be effectively
reached and influenced.
 Customer Profile tells the entrepreneur whom the marketing plan should be
directed.
 This group is the target market and should be quite narrowly defined.
Marketing Mix is the four “P’s”
1) The right product.
 Tangible features – things you can see and touch.
 Intangible features are things you feel.
 Product mix will have some products that do not sell as well as
others.
 It is often said that %80 of the profits are derived from %20 of the
products.
 The challenge is to determine how large of a selection will be
sufficient to satisfy the needs of your market.
2) Place
 The exchange point of the product is an effective marketing tool if
the business can create the perception that the product is easy to
acquire.
 The manufacturer must decide the best way to get the product into
the hands of the consumer.
 Channels of distribution may or may not include a retailer.
3) Price
 The balance between what the consumer will pay and profit for the
entrepreneur.
a) Cover the cost of the products including acquisition and
delivery.
b) Cover all business operating expenses.
c) Make sure the profits are sufficient to pay the owner a fair
salary for efforts and risks taken.
d) Retain a certain portion of the revenue for future expansion
and improvement of the business.
e) Entice the customer to return because of the high value they
perceive for the prices charged.
 If price is an effective marketing tool, use it!
4) Promotion
 This is the technique that business uses to communicate with
their markets.
 Advertising is a paid non-personal presentation of a sales
enticing message.
a) It tells customers that the business exists and where it is
located.
b) Informs customers about the products or services the
business offers.
c) Ongoing communication with the customer.
d) Keeps the business name in front of the buying public.
 Sales promotion must understand the communication channel
illustrated on page 105 Figure 5-6.
 Personal Selling
a) Approach or introduction
b) Presentation is a carefully orchestrated declaration
of the features of the product.
c) Handling objections should be anticipated and
solutions should be prepared and practiced.
d) Trial close is the test of whether the consumer is
prepared to buy.
e) Close is the customer’s intent to buy.
f) Follow-up. The buyer may feel cognitive
dissonance or uncertainty as to whether the
purchase was the correct one. Good sales people
will understand this and call the buyer to
compliment their choice and build their support.
 Visual merchandising is the “silent sales person” in how the
product is presented.
 Public Relations consist of planned events that demonstrate
the goodwill of the business.
Marketing Strategies
1.
2.
3.
4.
5.
6.
.
Establish an Advertising Budget
Plan & Schedule Advertising.
Make decisions about sales promotions
Decide how personal selling will be handled.
Create Visual Merchandising.
Develop a Strategies Calendar.
Small Business Marketing Guidelines
 Invest time, energy, and imagination, not just money.
 Measure their success by making profits, not sales.
 Use good sense to make up for experience. (Until you have it)
 Focus on excellence, not diversification.
 Place emphasis on making larger transactions with existing customers, not
just on adding new customers.
 Use a combination of marketing strategies instead of just sticking to one
that appears to work.
 Look for free ways to promote our business.
 Keep track of the number of relationships they establish, not just the
number of sales.
 Find ways to add drama to their promotional activities and products in
order to get the customer’s attention.
 Invite their customers to get involved.
 Communicate in a clear and believable manner.
Homework
1)
2)
3)
4)
5)
The Global Entrepreneur, page 107
Ethics for Entrepreneurs, page 108
Ship in a Bottle, page 112
A Case in Point, page 114
Read Chapter 6