Download Chapter 9: Marketing Your Business

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Chapter 9: Marketing Your Business
Marketing Mix
The blending of the four marketing elements
of product, distribution, price, and
promotion used to reach a target market
Product mix
The different products and services a
business sells
- Select Product features
o Color
o Size
o Quality
o Business operations
 Hours
 Delivery
 Warranties
 Installation
- Branding – name, symbol of designed
used to identify your product
- Package – the box
- Labeling – where you put info on the box
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Chapter 9: Marketing Your Business
Positioning
Is placing a product in a certain market
to get a desired customer response
- family car vs. luxury car
Distribution
Channels of Distribution:
The routes that products and services
take from the time they are produced to
the time they are consumed
Channels of Distribution for retail Goods
- be open during hours that are
convenient for customers
- catalogs, fliers, or direct mail
- Phone or Fax
- Internet
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Chapter 9: Marketing Your Business
Receiving Goods to Sell
Places to buy merchandise
- American Wholesales & Distributors
Directory
- The Thomas Register
- AT&T Business Directory
- Trade Magazines
Channels of Distribution for Service Business
- usually sold directly to customer
(single direct channel of distribution)
Channels of Distribution for Manufacturing Business
- Sell to other businesses / Who sell to final
customers
- Use all distribution possible
Physical Distribution
- transportation, storage, product handling
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Chapter 9: Marketing Your Business
Price: (pricing strategy)
Set prices low enough so customers will buy
from you but high enough to make a profit
-
Maximize sales
Discourage Competition
Attract Customers
Maintain an Image
Increase profits
Return on Investment
Think about the cost (investment) to
make and market a product
Obtain Market Share
Think about buying market share with
low prices
Market Share – the percentage of sales
for all companies in the market that a
business captures
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Chapter 9: Marketing Your Business
Determining Price
Demand-Based Pricing:
Pricing base upon how much customers
are willing to pay for a product or
service
Cost-Based Pricing
Price determined by using wholesale
cost (or mfg cost) as the basis for the
price charged
Markup Price: determined by adding
an amount to the whole sale price
Wholesale cost X markup % = Markup
Wholesale cost + Markup = Price
Markdown Price: A price determined
by subtracting an amount from the retail
price
Retail price X discount % = Discount
Retail price – discount = price
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Chapter 9: Marketing Your Business
Determining Price (cont’d)
Competition Based Pricing
Pricing determined by what the competition
charge for the same goods or services
Pricing a Service
Time-based Pricing
Price based on the number of hours needed
to complete the service
Hourly Charge X # hours = Price
Bundling
Services bundled together and sold at one
price
Breakeven Point
The lowest price at which the seller’s costs
are covered but there is no profit
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Chapter 9.2: The Marketing Mix Promotion
Promotional Mix:
The strategy for promoting your business using
advertising, publicity and other methods of
promotion
Advertising:
A paid form of communication sent out by a
business about a product or service
- used to convey a positive image
o business
o product
- Public relations
o The act of establishing a favorable
relationship with customers
- Choose your message
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Chapter 9.2: The Marketing Mix Promotion
Choose your medium:
o Television
 Pros
 Reached millions
 Short commercials
 Long infomercials
 Customer can see product
 Customer can hear promotion
 Cons
 Very expensive
 Too broad an audience
 May not reach target audience
o Radio
 Pros
 Less expense that TV
 More certain of target audience
 Can get demographic profile of
listener
 Cons
 Customer can’t see product
 May ignore ads
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Chapter 9.2: The Marketing Mix Promotion
Choose your medium: (cont’d)
o Newspaper
 Pros
 Relatively inexpensive
 Target limited geographical
area
 Reaches large number of
people
 Cons
 Many people who are reached
may not care about your
product
 Lots of other ads in same paper
o Direct Mail
 Pros
 Can buy target group mailing lists
 Effective if people read it
 Cons
 Often thrown out as “junk mail”
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Chapter 9.2: The Marketing Mix Promotion
Choose your medium: (cont’d)
o Telephone Directory Ad
 Pros
 People see ad when they need
what you sell
 People always know where
your ad is
 Cons
 People only look when they
already need something
o Magazine advertising
 Pros
 Excellent way to get to target
audience
 Nationally distributed
 Cons
 May be outdated
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Chapter 9.2: The Marketing Mix Promotion
Choose your medium:
o Outdoor advertising
 Pros
 Keep business name “out
there”
 Cons
 Limit viewing time = limited
info
o Transit Advertising
 Pros
 Similar to billboards but more
viewing time
 Good if trying to reach people
who use public transportation
 Cons
 Not seen by people who don’t
use public transportation
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Chapter 9.2: The Marketing Mix Promotion
Publicity:
The free promotion generated by media
coverage
Press release:
A written statement meant to inform the
media about an event or product
Selling
Personal Selling
Direct communication between a
prospective buyer and a sales representative
who tries to persuade buyer to make a
purchase
Product Knowledge
To be an effective salesman you must know
all aspects of your product
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Chapter 9.2: The Marketing Mix Promotion
Selling (cont’d)
Determine customer’s wants and needs
- perform a “needs assessment”
- discover how buy will make decision
o rational – sell logical facts
 safety
 quality
 reliability
 economy
o emotional – sell desire
 protection
 appearance
 comfort
 recreation
- use the Problem Solving Approach
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Chapter 9.2: The Marketing Mix Promotion
Other Types of Promotion
Sales promotions:
Offer incentive to customers in order to
increase sales
-
contests
free samples
coupons
frequent purchaser programs
- rebate (refund offered to buyers of products)
Telemarketing
Using the telephone to market your product
- expensive
- annoying to some customers
- effective
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Chapter 9.3: Set Marketing Goals
Establish Goals
Short Term Goals:
What do you want your business to achieve in
the next year?
-
number of customers
level of sales
profits
etc.
Medium-Term Goals
What do you want your business to achieve in
the next two to five years?
- Short term goals plus
- market share
- networking
Long Term Goals:
Thinking about 5, 10, 20 years out will help you
plan and effect current decisions
Write your Marketing Plan
Chapter 9: The Marketing Mix