Essential of Technology Entrep. & Innovation- Chapter eight developing the right marketing mix

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In chapter right of the course, we discuss the marketing mix.
This course provide the students with a conceptual knowledge regarding the essentials for management practices of a technology-based organization, and the evolution of technology. The topics covered in this course would include: • Introduction to the concept of entrepreneurship. • What entrepreneurs do and their importance to economy • How to seize business opportunity; • Know the process of creativity and difference between invention and innovation • Know how innovation is important as a dimension of entrepreneurship • Critical factors in managing technology; including • The Time Factor (Osborn effect) • Technology Push and Market Pull • The S-Curve of Technology • Technology and Product Life Cycle • The Chain Equation of Technology Innovation • Price Knowledge Gape Relation • Difference between Entrepreneurship and Stewardship Management • Difference between technology leader and followers • Competition and Competitiveness Concepts. • The process of the technological innovation; • Who are the customers; and • How to optimize cost and find finance for your projects • Demonstrate the importance of business plan, including the marketing and financial plans and how to prepare it. • Know the structure and management of a technology organization

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Essential of Technology Entrep. & Innovation- Chapter eight developing the right marketing mix

  1. 1. CS443 Course Introduction To Entrepreneurship p p Spring 2009, Modern Science & Arts University Chapter Eight: Developing the Right Marketing MixInstructor:Al-Motaz Bellah Alaa Al-AgamawiChapter Source, “chapter Four: entrepreneurship starting and operating a small business”book, by Steve Mariotti, 2007, Pearson Education, Inc. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  2. 2. Marketing Mix2 A marketing mix is the combination of four factors called the four Ps that factors, P s,together communicate your competitive advantage to customer: Product Price Place Promotion If you tweak one "P," you must pay attention to how it affects the others If you raise your price, for example, are you now still selling the product in the right place? Or will you need to move to a location that will put you in contact with consumers willing to pay the new price? Where will you promote your product at the higher price? Will you have to take out an ad in a different magazine or newspaper to reach these more affluent consumers? i h h ffl ? Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  3. 3. Marketing Mix3 Your marketing goal is to bring the right product to the right place at the rightprice with the right promotion. Product-The product (or service) should meet or create a consumer need. The packaging is also part of the product. Your customer might throwaway f your packaging but that does not mean it is unimportant. Starbucks revolutionized the coffee shop by creating different cup sizes and p y g p using Italian names. Place-Place your product where customers who need it do their shopping. Selling bathing suits in Alaska in February is not going to fill a customer need need. Where should you go to bring your product or service to the attention of your market? If you are selling a l lli luxury item, you will need to place it i stores that are i ill d l i in h visited by consumers who can afford it. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  4. 4. Marketing Mix4 Price The product has to be priced low enough so the public will buy it and high Price-The it,enough for the business to make a profit Price also should reflect your marketing vision. If you are marketing a luxury item, a relatively low price might not send the right message to the consumer. Promotion-Promotion consists of advertising publicity and other promotionaldevices such as discount coupons or giveaways. p g y Publicity is free, while advertising is purchased. If a newspaper writes an article about your business, its publicity. If you buy an ad in that newspaper youre advertising newspaper, you re advertising. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  5. 5. Pricing5 According to Guerrilla Marketing Attack, by Jay Levinson a study of consumers in Attack Levinson,the furniture industry found that Price came ninth when consumers were asked to list factors affecting their decision make a purchase. Quality was the number two influence on buying patterns, and Confidence in the product was number one. p Service was third. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  6. 6. Pricing Strategies6 Cost-plus This method simply takes your cost and adds a desired profit margin Cost-plus-This margin. This method fails to take marketing vision into consideration. Penetration Strategy-This method uses a low price during the early stages of aproducts life cycle to gain market share. d lf l k h Japanese companies used this method to dominate the VCR market. Skimming Strategy-The opposite of p g gy pp penetration strategy, this method seeks to charge gy ga high price during the introductory stage of the PLC, when a product is novel and hasfew competitors. RCA used this strategy when it introduced color television television. Meet or Beat the Competition-This is a common strategy in service businesses. Airlines tend to compete intensely by low­ering their ticket prices. The Th more you can show that your business is diff h h b i i different from your competition, f ii however, the less you will have to compete with your price. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  7. 7. Place, Location7 The type of business you are running will influence your choice of location location. For a retail business, location is the key to attracting customers. Ideally, you will want your store or business to be where your market is. For nonretail businesses the key to location might be cost or con­venience, ratherthan proximity to the market. Wholesale businesses require a great deal of storage space and are best q g g p located in out-of­the-way areas where rent or property costs are low. As for service businesses, the Internet is making it easier for people who provideservices such as graphic or Web site design writ­ing or accounting, to start their design, writ­ing, accountingbusinesses in their homes Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  8. 8. Promotion8 Promotion is the use of advertising and publicity to get your mar keting message mar­ketingout to your customers. Publicity is free mention of your business in newspapers and magazines or onradio and TV stations. An advertisement is a paid announcement that a product or a service is for sale. If your business is providing an unusual service, you might be able to get a local y p g y g gnewspaper to do an article. That article would be publicity for your business-you didnot pay for it, yet consumers will learn about your service by reading the article. Publicity is sometimes referred to as public relations, or "PR " relations PR. Each piece of publicity has enormous value. It has a lot of credibility withconsumers because you did not pay someone to write it. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  9. 9. Promotion9 You can promote your business through: Banner Ads Billboards Brochures Business cards Direct Mail Catalogs Discount Coupons Flyers Free Gifts Sample and Demonstrations Special Events S i lE Sponsorship Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  10. 10. Logo and Trademarks10 A Logo (short for logotype) is an identifying symbol for a product or business A Logo is printed on the business’s stationery, business cards, and flyers. when a logo has been registered with the US patent office to protect from beingused by others, it is called trademark A company uses a trademark so that people will recognize its product instantly,without having to read the company name or even having to think about it. g p y g Customers do not have a lot of time to study different products be­fore decidingwhere to spend their money. If you can consistently offer a quality product or service and create a logo that successfully represents your company, you are on your way to success. Over time, your logo will become associated with your business. It is up to you to make sure that the customer thinks of quality when he or she sees your logo. k h h hi k f li h h h l This association can become an advantage over the competition. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  11. 11. Copyright11 Art is another form of intellectual property. If you are a songwriter author, or property songwriter, authorpainter, you will create works that you might sell. If you do not protect your work, however, someone else can sell it. A copyright is the form of legal protection offered to literary, musical, and artistic f f ffworks. The owner of a copyright has the sole right to print, reprint, sell and distribute, py g g p previse, record, and perform the work un­der copyright. The copyright protects a work for the life of the au­thor/artist plus seventy years. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  12. 12. Electronic Rights12 Now that writing, photographs, art, and music can be posted on the Web, writing photographs art Webentrepreneurs must protect their intellectual property online, as well. The rights to reproduce someones work online are called electronic rights. Using artwork without permission, even if it is a song or photo posted online, is fInternet piracy. President Clinton dealt a blow to Internet piracy in 1998 when he signed the p y gDigital Millennium Copyright Act into law. The act protects copyrighted software,music, and text on the Internet by outlawing the technology used to break copyrightprotection devices devices. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  13. 13. Protect Your Electronic Rights13 "Work-made-for-hire"-This means you are giving up the rights to your work. Now Work-made-for-hire This workthe buyer can use it anywhere with­out paying you anything beyond the original feeyou negotiated. Rights"-This means you are handing over all rights to your work to the buyer. "All Ri h " Here are some strategies for protecting your electronic rights. I Get the buyer to define exactly what is included in "electronicrights"-online y y g publication? CD-ROMs? Anything else? Put a limit on how long the buyer can have the electronic rights-one year, for instance instance. Ask for an additional fee for each additional set of rights. A good rule of thumb would be to ask for 15 percent of the original fee every time your work is i used somewhere electronically. d h l i ll Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  14. 14. Marketing Materials– Competitive Advantage14 All promotional items for your business should reflect and reinforce your marketingvision, which in turn will reinforce ‘Your competitive advantage’. They should include: name of your business, your logo, and a slogan, if you have one. All your business materials, in fact, such as order forms, invoices, and receipts, y pshould also reflect and reinforce your businesss competitive advantage. Good marketing materials serve three functions: Creating them will organize your business thinking thinking. They will enable you to teach others in your company about the business. They will enable you to go into the marketplace and sell your product or service. i Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  15. 15. Image is Important15 You will have a much stronger impact if all your business materials are tiedtogether with a strong, coordinated image: Business cards Stationery Flyers Brochures Press releases Mailing cards Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  16. 16. Where to Advertise?16 An effective ad for a small business typically concentrates on the benefit theproduct or service provides to the customer. This is why it is important that you accomplished Step 1 of the marketing process:consumer analysis. You need to know who your customers are in order to know how toreach them with advertising. If you are advertising a snowing trip, for example, it would be a waste of money y g g p p yto take out an ad in a magazine for senior citizens. By visualizing your customer, you avoid wasting money on customers who arentinterested in your product or service service. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  17. 17. Gaining Goodwill17 Many entrepreneurs try to make a difference in their communities by giving moneyand time to organizations that help people. Microsoft, for example, made it possible for the National Foundation for Teaching Entrepreneurship to develop an Internet-based entre­preneurship curriculum, BizTech. Microsoft has donated both money and computer p g programming expertise to this project. g p p j Why would Microsoft do this? First, Microsofts founder, Bill Gates, believes in NFTEs mission and wants to help young people learn about business business. Second, Microsoft gains publicity and goodwill. Goodwill is composed of intangible assets, such as reputation name recognition, and customer relations. Goodwill can give a company an ii d l i G d ill i advantage over its competitors. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  18. 18. Relationship Marketing18 Most companies have moved away from "transaction oriented" marketing which transaction-oriented marketing,focuses on closing a sale with customers, and toward, "relationship" marketing, whichfocuses on creating long-term relationships with customers by making sure they aresatisfied. f Relationship marketing acknowledges that making the sale is just the beginning ofthe relationship between a company and a customer: p p y Companies communicate to their customers through marketing. The most profitablemessage a company can communicate is that it would like to serve customers over alifetime in a mutually beneficial relationship relationship. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  19. 19. Marketing is a Fixed Cost19 Marketing is part of your business s fixed costs. Fixed costs are costs that do not businesss costsvary with sales: Utilities (gas, electric, telephone) . Salaries S l i Advertising Insurance Interest Rent Depreciation There are also variable costs, such as commissions, that vary with sales. For ab i t i th h t b bl t it fi d t M t fi d tbusiness to survive, though, it must be able to cover its fixed costs. Most fixed costs,are hard to cut back if your sales are slow. Marketing costs are more flexible. They fall under advertising, and may also showup under salaries, if you hire a marketing consultant or a full-time marketing staff. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  20. 20. Business Plan Practice (Project Section)…20 Chapter 4, entrepreneurship starting and operation a small business book Page 112, Question number 5 Page 112, Question number 7 Page 112, Question number 8 Page 113, Application Exercise Assignment Deadline: Week After Next. Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi
  21. 21. 21 Q&A… Developing the Right Marketing Mix Chapter 8 By: Motaz Al-Agamawi

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