The Business Entrepreneur Seminars (Module 16 of 16)

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Marketing 101:
The Fundamentals
By:
Enrique R. Suarez
suarezenrique@yahoo.com
http://www.wix.com/suarezenrique/delta

Marketing 101: The Fundamentals Slide 4 of 153
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What Is Marketing?
This document is a partial preview. Full document download can be found on Flevy:
http://flevy.com/browse/document/the-business-entrepreneur-seminars-module-16-of-16-1332

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Goods, Services, & Ideas…
§ Marketing deals with goods, services, and ideas.
§ A good is something someone can touch.
§ A service is providing an intangible benefit to
customers.
§ An idea can include concepts or images.
§ For this course, we will use the word product to
refer to goods, services, and ideas.This document is a partial preview. Full document download can be found on Flevy:

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Dynamic marketing environment…
§ There are many forces that affect the marketing
environment, including:
– Competition
– Laws and Regulations
– Economic and Social Conditions
– Cultural Factors
§ These forces can be dramatic and difficult to predict.
§ Be aware of these forces because they can create
threats and generate opportunities for your business.

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The 5th P of marketing…
§ While the previous four P’s are important to the
marketing mix, there is one that is left out.
§ Positioning
§ Positioning is not dealing with where you will
place your product in the market, but where you
will place you product in the mind of the
consumer.
§ See Marketing Mix worksheet

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Start with secondary data…
§ Researchers will usually start by collecting secondary
data.
§ Secondary data can be obtained quicker and at lower
costs.
§ When collecting secondary data evaluate it carefully
to make sure that it is:
– Relevant
– Accurate
– Current
– Impartial

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Researching consumers…
§ There are many secondary data sources for researching
consumers.
– Consumer expenditure surveys
– Census data
– Demographics
– Psychographics
• VALS – (Values, Attitudes, & Lifestyles Surveys)
• Zip code psychographics
http://www.strategicbusinessinsights.com/vals/presurvey.shtml
http://guides.lndlibrary.org/content.php?pid=373509&sid=3059640

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Collecting primary data…
§ Since primary data does not already exist it can
become very costly and time consuming to gather.
§ There are several ways to collect primary data.
§ The most common methods are observation,
survey, and experiment.
§ These methods can be done by mailings, telephone
calls, and personal interactions to name a few.This document is a partial preview. Full document download can be found on Flevy:

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The anatomy of a questionnaire…
§ When developing a questionnaire keep the
following in mind:
– Take your time to make sure that it is carefully
developed and tested.
– Carefully choose your wording of each question.
– The sequence of the questions is also important.
– Make sure that all the questions included in the survey
are necessary.This document is a partial preview. Full document download can be found on Flevy:

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Macro and micro environments…
§ The marketing environment is made up of two
environments;
§ The microenvironment is the immediate
environment that effects the companies ability to
serve customers.
§ The macroenvironment consists of larger social
forces that affect all players in the
microenvironment.

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Analyzing your customers…
§ Which customer market will the company operate
in?
– Consumer
– Industrial
– Reseller
– Government
– International
§ Each of these markets’ characteristics should be
analyzed on how they will effect the company.

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SWOT Analysis - Discover New
Opportunities, Manage and Eliminate Threats…
Strengths
§ What advantages does your organization have?
§ What do you do better than anyone else?
§ What unique or lowest-cost resources can you draw upon
that others can't?
§ What do people in your market see as your strengths?
§ What factors mean that you "get the sale"?
§ What is your organization's Unique Selling
Proposition (USP)?

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Threats…
§ What obstacles do you face?
§ What are your competitors doing?
§ Are quality standards or specifications for your job, products or
services changing?
§ Is changing technology threatening your position?
§ Do you have bad debt or cash-flow problems?
§ Could any of your weaknesses seriously threaten your
business?
§ Do the following SWOT exercise in the below link:
http://www.mindtools.com/pages/article/worksheets/SWOTAnaly
sisDownload.htm

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Technological environment…
§ Technological factors can lower barriers to entry
and influence outsourcing decisions.
§ Some examples of technological factors include
R&D activity, automation and rate of
technological change.
§ Another factor that may affect the technological
environment is if a company concentrates only on
minor improvements or major innovations.

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Consumer vs. Business…
§ The first step in selecting your target market is to
determine whether your customers are consumers
or businesses and industries.
§ Keep in mind that you can have more than one
target market. However, if you find the
description of your market too broad or general,
then ask yourself:
§ Is there really more than one target market here?

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Demographic resources…
§ Many resources are available to help you define
the demographics of your target market.
– U.S. Census Bureau
– Consumer Spending Surveys
– Business Expense Surveys
– American Factfinder
– State and County Quick Facts
– EasiDemographics

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Zip code psychographics…
§ People with similar lifestyles tend to live in the
vicinity of one another.
§ Zip code psychographics can help you define
characteristics of a region by just knowing its zip
code
§ For more information go to:
– http://guides.lndlibrary.org/content.php?pid=373509&sid=3059
640

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The concept of positioning…
§ One of the best-known names in American advertising
circles is David Ogilvy.
§ After spending several billion dollars on advertising,
Ogilvy listed 32 things his ad agency had learned.
§ Of the thirty-two, he said that the single most important
decision involved positioning the product.
§ He claimed that marketing results depended less on how
advertising was written than how the product or service
was positioned.

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How positioning works…
§ It is quite difficult to change a consumer's impression once
it is formed.
§ Consumers cope with information overload by
oversimplifying and are likely to shut out anything
inconsistent with their knowledge and experience.
§ In an over-communicated environment, the advertiser
should present a simplified message and make that
message consistent with what the consumer already
believes by focusing on the perceptions of the consumer
rather than on the reality of the product.

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Finding your unoccupied position…
§ If a product is not going to be first, it then must
find an unoccupied position in which it can be
first.
§ At a time when larger cars were popular,
Volkswagen introduced the Beetle with the slogan
"Think small.”
§ Volkswagen was not the first small car, but they
were the first to claim that position in the mind of
the consumer.

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Repositioning Stoli…
§ Consumers tend to perceive the origin of a product by its
name rather than reading the label to find out where it
really is made.
§ Such was the case with vodka when most vodka brands
sold in the U.S. were made in the U.S. but had Russian
names.
§ Stolichnaya Russian vodka successfully repositioned its
Russian-sounding competitors by exposing the fact that
they all actually were made in the U.S., and that
Stolichnaya was made in Leningrad, Russia.

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Applying positioning…
§ Sun Tzu stated, "battles are won or lost before
they are ever fought."
§ The concept of positioning applies to products in
the broadest sense.
§ Services, your business itself, tourist destinations,
countries, and even careers can benefit from a
well-developed positioning strategy that focuses
on a niche that is unoccupied in the mind of the
consumer or decision-maker.

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Finally, let’s consider your message…
§ Your positioning message is what you will consistently
reinforce to your selected niche.
§ The message should help your customer identify,
understand, and remember your position.
§ To be effective, your message needs to be short—usually
under five words—three or less is better.
§ You should also try to let go of the intangibles such as
your product features and price points and speak to your
customer’s emotions. For example: Just do it—Nike.

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Avoiding rational logic…
§ When you appeal to rational thought you, in
effect, create an argument in the customer’s mind.
§ To solve this issue, try moving your message from
the customer’s head to their heart.
§ To do this you need to appeal to their emotions.

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Designing Products & Services

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Selling a service…
§ Delivering a service can be quite different then
manufacturing a product.
§ Some questions to address may include:
– What services do you offer?
– How do they work?
– What materials or equipment is needed?
– What are your labor needs for these services?
– What are the steps in your service process?
– What benefit(s) do you provide customers?

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Packaging your product…
§ After you have addressed questions about your
product, you should then consider how you will
package it?
§ The primary function of packaging use to be to
hold and protect the product.
§ Today, however, packaging is becoming an
increasingly important marketing tool.This document is a partial preview. Full document download can be found on Flevy:

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Product liability insurance…
§ Americans initiate more product liability lawsuits
than do customers in any other country in the
world.
§ There has been a 983 percent increase in product
liability cases heard by federal courts since 1974.
§ A few famous cases you might recognize…
– Firestone Tire/Ford Explorer (tire blowouts)
– Mrs. Liebeck vs. McDonald’s (hot coffee)

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Product Mix…
§ While some companies only offer one product or service, most
companies try to diversify themselves by offering a product mix.
§ A product mix is the set of all product lines and items that a
particular seller offers to buyers.
§ Use the websites below to help you organize your product mix.
– http://www.solver.com/solver-tutorial-product-mix-example-
step-step-excel
– https://www.extension.purdue.edu/extmedia/ec/ec-730.pdfThis document is a partial preview. Full document download can be found on Flevy:

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Pricing Products & Services

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Pricing strategy…
§ Once you have determined your objectives you
should then focus on the methods you will use to
determine your prices.
§ Keep in mind laws that regulate pricing and
pricing strategies such as the Clayton Act.
§ For more information on the Clayton Act go to:
– http://www4.law.cornell.edu/uscode/15/12.htmlThis document is a partial preview. Full document download can be found on Flevy:

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The nature of the market…
§ Be aware of the floor and ceiling prices in your market.
§ The costs of the product will set the floor for the
marketer.
§ The ceiling is set by the market and its demand.
§ Set your price between these two points but keep in
mind consumers will compare the price of the product
against the value of owning it.
§ Avoid establishing where the costs will outweigh the
benefits, and consumers will no longer buy your
product.

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Determining gross margins…
§ Once you have set the cost you can then determine
the gross margin for the product.
§ Compare your product’s gross margin with industry
standards from sources such as RMA.
Product Price (to consumer)
minus Product Cost (to you)
equals Gross Margin of Product

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Market coverage…
§ You must first determine which markets you are
going to reach and with what objectives.
§ Be sure to include items such as the desired level
of service and functions to be performed by
channel members.
§ Constraints to developing your objectives may
come from several sources.
– Customers, products, intermediaries, company policies,
competitors, and the environment.

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Retailers in the distribution channel…
§ As you move down the marketing channel from
manufacturing, to wholesaling and so on, it may
become unclear what your distribution channel
will look like.
§ Often, retailers believe that they do not have a
distribution channel.
§ The fact is a retailer’s location is their distribution
channel.

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Logistics of your channel…
§ When planning your distribution channel you
should be able to answer the following questions.
– What will the ordering process look like?
– Where will inventory be located?
– How much inventory should be kept on hand?
– How should goods be shipped?

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The cost of your location…
§ What will it cost to lease or buy the needed facility?
§ Make sure that you can afford the location that you
choose.
§ Also find out the term and duration of the lease of
the desired location.
§ For more information, go to:
http://www.nolo.com/legal-encyclopedia/business-
licenses

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The promotional mix…
§ The promotional mix consists of four main tools.
– Advertising,
– Personal selling,
– Sales promotion and
– Publicity
§ By identifying these tools you will be able to lay
out the basis of a media plan and promotional
budget for your company.

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Direct mail…
§ Direct mail allows for the most careful aim of
your target.
§ Direct mail is one of the least expensive methods
of marketing on a per-sale basis.
§ But be aware that an expected response rate for a
general direct mailing can be as low as 2%.
§ For help on direct mailings go to:
– http://www.the-dma.org

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Newspaper…
§ Newspapers are great for broadcasting news.
§ Ad types, dates, frequency and sizes are all important
issues you need to address.
§ However, try not to let the newspaper design or write the
copy for your ad. If they do, your ad may appear like all of
the other ads in the paper, including your competitors.
§ For a listing of national an international online newspapers
go to:
http://www.50states.com/news/
http://www.listofnewspapers.com/

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Television and cable…
§ While television can be highly effective, it can
also be very costly.
§ To be effective, television ads must placed in front
of audiences on a regular basis.
§ With cable you can have the advantage of being
able to pick which subscriber areas you want to
target and picking particular stations you want to
advertise on. (CNN, ESPN, etc.)
§ For a listing go to http://www.mediapost.com.

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Telemarketing…
§ Telemarketing can be a convenient way to educate
customers about your products and services while
offering a great deal of flexibility.
§ However, be aware that many consumers today
see telemarketing as a nuisance.
§ They may also be leery of telemarketing fearing
that it is a possible scam.This document is a partial preview. Full document download can be found on Flevy:

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Selecting a sales force…
§ If you decide to take part in personal selling, a
sales force will be needed.
§ Be sure to ask yourself how you will handle the
following:
– Recruitment and selection of sales personnel
– Training sales personnel
– Compensation and motivation
– Controlling and evaluating sales force performance

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Business sales promotion…
§ There are also numerous ways to offer sales
promotions to businesses or industries.
§ When targeting these types of customers try
offering quantity discounts, free merchandise,
buy-back allowances, dealer listings or
cooperative advertising.

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What comes next?
§ After you decide on which tools from the
promotional mix you want to use, you then need to
develop a promotional budget.
§ This is usually a major obstacle for companies
because while they may know what tools they
want to use, they may not know how to allocate
money to properly use them.

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Creating A Marketing Plan

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Let’s start with the marketing plan…
§ The marketing plan identifies the market and your
overarching positioning strategy.
§ The length of your final marketing plan is up to you and
depends on your organizational culture and the audience
that will read and use the plan.
§ At first, though, try to state it in just one paragraph.
§ According to Jay Conrad Levinson, author of Guerilla
Marketing, a simple plan can be created in just seven
sentences.

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Developing the creative plan…
§ A creative strategy is similar to a marketing plan
but is limited to the marketing materials only—
and directed solely at their content.
§ A creative plan can be written in as little as three
sentences which detail:
– The purpose of the creative message
– How the purpose will be achieved
– The mood, tone, or personality of the advertising

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Executive summary & challenge…
§ The executive summary is simply a summary of
the marketing plan.
§ It should highlight the main points of your plan.
§ The challenge section of the marketing plan
should include a brief description of the product
that will be marketed.
§ The challenge should also include associated goals
such as sales figures and strategic goals.

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SWOT analysis…
§ A SWOT analysis is the last section of the
situation analysis.
§ This type of analysis helps to determine internal
and external environmental factors.
§ The internal factors are the strengths and
weaknesses of the business.
§ The external factors are the opportunities and
threats in the market.
§ See SWOT analysis worksheet

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Finishing up your plan…
§ The short and long-term projections should
include immediate and future desired results and
how these results will be achieved.
§ This section may also include a forecast of
revenues and expenses related to the plan.
§ A conclusion should be placed at the end of the
plan to summarize the plan’s contents.
§ Any other information that may pertain to the
marketing plan should be paced in the appendix.

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The Business Entrepreneur Seminars (Module 16 of 16)

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The Business Entrepreneur Seminars (Module 16 of 16)