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  1. 1. MARKETING Bill Taylor Northeast Area Community Development Educator University of Wyoming The University of Wyoming is an equal opportunity/affirmative action 1 institution.
  2. 2. What is marketing? Marketing is everything you do to promote your business, from the moment you conceive of it to the point at which customers buy your product/service and begin to patronize your business on a regular basis. Jay Conrad Levinson – Guerrilla Marketing University of Wyoming 2 HANDOUT: Slides
  3. 3. University of Wyoming 3
  4. 4. University of Wyoming 4
  5. 5. The Marketing Process • Research – Gather information about industry, customers, competitors, and market potential. • Market Analysis – Helps you decide on strategies • Market Plan – Implementation of the strategies University of Wyoming 5
  6. 6. Analyzing the Customer • Determining your customer “profile” – Demographics – physical characteristics which segment people • Age groups, income levels, number of homeowners, shift workers vs. salaried professionals, ethnic and racial groups – Psychographics – mental characteristics which motivate people to buy • Vegetarians, interested in the arts, outdoors oriented, confident, fearful University of Wyoming 6
  7. 7. Analyzing the Customer (cont.) • Who is your customer? – Is the type of customer your business generally attracts the customer you want to attract? University of Wyoming 7
  8. 8. Researching Your Customer • Primary • Secondary – Phone surveys – Library references – Personal interviews – Trade associations – Intercept (randomly – US Census & other selected people) governmental data – Written surveys – Computerized – Focus groups databases – Publication inserts University of Wyoming 8
  9. 9. Determining Your Market Area • Geographical boundaries and size – Geographical scope – Assumptions can make or break your market – What about shipping and advertising? – Target customers are different from Newcastle to Gillette to Rapid City University of Wyoming 9
  10. 10. Determining Your Market Area (cont.) • You want to start a business that offers linked computer services specifically for doctors and hospitals. Town A – 5000 Town B – 50,000 •One small hospital facility for •25 miles away from town A emergency treatment only •Two major hospitals •Five local physicians •20 local physicians University of Wyoming 10
  11. 11. Competitive Advantage • Price • Products/Services • Quality offered • Expertise • Image/Reputation • Customer service • Location • Store layout • Sales method • Store appearance • Management • Selection • Credit policy • Advertising • Stability • Reliability University of Wyoming 11
  12. 12. Think outside the obvious… • The obvious customer isn’t the only customer. • The obvious competitor isn’t the only competitor. University of Wyoming 12
  13. 13. Determining Trade Area and Target Market • Determining the number of people in your trade area who “fit” your customer profile. – Target market – a sub-segment of the overall trade area • Have specific characteristics – What percentage of this “target market” will actually respond with a purchase? University of Wyoming 13
  14. 14. Niche Marketing • Seeking out and capitalizing on pockets of opportunity. – Usually small, specific customer base that has not been reached – they have a need you can fill. – A marketer can become a big fish in a small pond… • Competition is less intense. • Lower costs of reaching the market. • Greater potential to achieve dominance. – Niche markets may be less stable or long-lived – May be too small to provide sufficient gross sales University of Wyoming 14
  15. 15. Determining Market Potential • Who will buy & how much will they spend? – Accuracy of your market research is important. • Customer profile • Competition identified • Size of trade area – The amount of your resources available for development and marketing will have a strong effect on which customers you target, who you take on as competition and what size of trade area you intend to market to. University of Wyoming 15
  16. 16. Projecting Sales Volume 1. Total number of people (or businesses) in your trade territory. 2. Total number in trade territory who fit customer profile. 3. Estimated $ amount spent by customers on products. 4. Equals total annual market potential. 5. Your estimated % share of this market. 6. Equals your projected annual market potential. HANDOUTS: Mkt Analysis University of Wyoming 16 Wksht & Resources
  17. 17. The Five “P”s of a Market Plan • P #1 – Products or Services – What do they (your products) or you (your services) do? – What makes yours’ unique or special? – Who will buy them? – When will they buy them? – How much will you charge? University of Wyoming 17
  18. 18. The Five “P”s of a Market Plan (cont.) • P #2 – Packaging – The way your business is presented to the marketplace. • Image of business • Consistency of presentation in all communications • If you see golden arches you always know what to expect. University of Wyoming 18
  19. 19. The Five “P”s of a Market Plan (cont.) • P #3 – Place – Where do you do business? – Location can impact customer availability and customer service – Location needs to “fit” the customer expectation – Your position in the distribution chain affects your decision about location – A gift store in the industrial section probably won’t have much of a draw University of Wyoming 19
  20. 20. The Five “P”s of a Market Plan (cont.) • P #4 – Pricing – What influences price? • Cost – pricing from “bottom up” – Raw materials, labor, overhead, taxes, profit – Comparison to competition, market position University of Wyoming 20
  21. 21. The Five “P”s of a Market Plan (cont.) • P #4 – Pricing (cont.) – What influences price? (cont.) • What is the market willing to pay? – Seasonality – Convenience – Elasticity of consumer » Milk (grocery store – convenience store) » Computer programmer ($15/hr - $100/hr) • Demand – “top down” pricing – Analyze the range of acceptable prices » Set price » Analyze costs » Is there adequate profit? University of Wyoming 21
  22. 22. The Five “P”s of a Market Plan (cont.) • P #4 – Pricing (cont.) – What influences price? (cont.) • Perceived value – What does your psychographic profile tell? » “Worth” of $50 pair of name brand jeans to a rancher? » Image pricing positions your product/service based on perceived value – BMW vs. Chevy » Price/quality relationship University of Wyoming 22
  23. 23. The Five “P”s of a Market Plan (cont.) • P #4 – Pricing (cont.) – Common pricing mistakes • Failure to allow for waste, inventory shrinkage, damaged goods • Not adjusting prices yearly • Ignoring cost of replacing equipment (depreciation cost) • Understanding cost of getting and keeping customers • Underpricing special services – e.g. product variation, extra services • Not including an owner/manager salary University of Wyoming 23
  24. 24. The Five “P”s of a Market Plan (cont.) • P #5 – Promotion – No matter how much time and effort is put into the product, pricing, and placement, the whole process is likely to fail without good promotion. – “Top of Mind Awareness” • Communicates a message • Builds an image • Creates awareness University of Wyoming 24
  25. 25. The Five “P”s of a Market Plan (cont.) • P #5 – Promotion (cont.) Don’t tell me about your grass seed, tell me about my lawn! University of Wyoming 25
  26. 26. Promotion • Promotional Mix – The combination of tools used to promote products or services • Personal selling • Word of mouth • Public relations • Sales promotion • Advertising University of Wyoming 26
  27. 27. Promotion (cont.) • Personal Selling – Face-to-face presentation & promotion of products/services – Searching out prospects – Providing follow-up • Word-of-mouth – Consumers talking about products/services they have liked or disliked – One of most effective promotional tools – Targeted to satisfied customers University of Wyoming 27
  28. 28. Promotion (cont.) • Public Relations (PR) – Listen to the public – Develop policies & procedures that are in the public interest – Inform people that you are being responsive to their needs • E.g. health concerns, environmental concerns, concern for children, etc. University of Wyoming 28
  29. 29. Promotion (cont.) • Public Relations (PR) (cont.) – Publicity – a function of PR • …any newsworthy or interesting information about an individual, product, or organization. • …that the media distributes to the public. • …that is not paid for, or controlled by, the sponsor. University of Wyoming 29
  30. 30. Promotion (cont.) • Public Relations (PR) (cont.) – Publicity (cont.) Advantages Disadvantages •Free •No control •Hard-to-reach audiences  How, when, where, how many times, if •Various media coverage •Info may be altered •Believability •Good vs bad University of Wyoming 30
  31. 31. Promotion (cont.) • Sales – Short-term activities that stimulate consumer purchasing and supplement other promotional activities. Displays Bonuses Premiums Gifts Trade shows Demonstrations Contests Incentives Exhibits Samples Rebates Coupons Catalogs University of Wyoming 31
  32. 32. Promotion (cont.) • Advertising – Paid, nonpersonal communication through various media, by organizations or individuals, who are in some way identified in the advertising message. – Expenditures in order • Newspaper – 25% • Television – 22% • Direct mail • Yellow pages • Radio • Magazines • Outdoor University of Wyoming 32
  33. 33. Promotion (cont.) • Elements of Effective Promotion – Who? The right audience • Your targeted market segment – What? The right message • The tone that best suits the image & product • The information your target market segments want to hear – Benefits of your product/service – Your competitive advantage University of Wyoming 33
  34. 34. Promotion (cont.) • Elements of Effective Promotion (cont.) – Where? The right place • Where your targeted market segments look for information University of Wyoming 34
  35. 35. Promotion (cont.) • Marketing misconceptions – Companies control the market • …“If we build it, they will come.” – Once you have developed a market approach that works, you have mastered marketing. • …remember when IBM was synonymous with computers? – There is a magical market bullet that works for everyone. • …there is no “one right way” to market any product or service. University of Wyoming 35
  36. 36. Promotion (cont.) • Marketing misconceptions (cont.) – Marketing and selling are the same thing • …selling is only one aspect of the marketing process. • …businesses that focus their efforts solely on creating sales run the risk of disaster. – Marketing is the same as advertising • …advertising is just one part of the marketing process. University of Wyoming 36
  37. 37. Time – A Key (Judith A. Barry, Cornell University) Are you getting the most out of your marketing strategy? • Time costs money – Value of time used is often underestimated • Is return to time adequate to pay for the time invested? If not, why are you doing it? – Analyze skills • Introverts get worn out being with people all day – Is the right person doing the marketing? University of Wyoming 37
  38. 38. Time – A Key (cont.) • Think of using a middleman – Using the skills and experience of external people may save money and time – Again, assess your skills – is your time better spent in development and production? • “Time costs money, but my time is free.” – Wrong! All time costs money. You could always be doing something else. – If you get sick someone will have to be paid to do the same job. – Even if lifestyle is an important ingredient, remember: the bills must be paid. University of Wyoming 38
  39. 39. Time – A Key (cont.) • Where to get more time? – As development, quality control, and production takes more time how can additional time be given to the important task of marketing? • Strategic planning is necessary – Looking at the big picture – Setting important goals and operations first – Assigning the best sets of skills to the most appropriate tasks – Reducing, cutting back, changing, expanding with long-term goals in mind University of Wyoming 39
  40. 40. QUESTIONS? The University of Wyoming is an equal opportunity/affirmative action 40 institution.