Kay Reisen, November, 2008

MARKETINGis EVERYTHING

you do to promote yourbusiness, from the moment

you conceive of it to the pointat which customers buy yourproduct or service and beginto patronize your business on

a regular basis.

The key words to rememberare everything and regular basis.

- Jay Conrad Levinson

However, success today is difficult because customers are:

• Sophisticated

• Price sensitive

• Demanding

• Live time-compressed lives, and

• Have unprecedented control due to the saturation in today’s market.

Therefore, you need to identify and create a competitive advantage by:

1. Conducting market research

2. Examining your current market situation

3. Identifying your target segment(s)

4. Developing the marketing mix

– Product,

– Price

– Place

– Promotion

5. Computing a budget

6. Writing a business plan!

Step 1: Market Research– Trade associations

– National and local press Industry magazines

– National/ international governments

– Informal contacts

– Trade directories

– Published company accounts

– Business libraries

– Professional institutes and organizations

– Previously gathered marketing research

– Census data

– Public records

Market ResearchWeb Sites

• www.sba.gov

• http://www.misbtdc.org

• www.bplans.com

• http://www.businessplans.org/businessplans.html

• www.business.gov

• www.enterpreneur.com

• www.medc.michigan.gov

• http://www.toolkit.cch.com

• www.fedstats.gov

• www.infomi.com

• www.semcog.org

• http://www.businessownersideacafe.com

• http://www.michigan.gov/businessstartup

• http://www.businesstown.com

• http://www.entreworld.org

• www.wsj.com

• www.census.gov

 

Step 2: Examine your current marketing situation

• Review your past performance

• Perform SWOT

• Evaluate your competition

Step 3: Identify your segment(s)

– Marketing Segmentation: The process of dividing a market into customer categories.

– Geographic variables

– Demographic variables

– Psychographic variables

– Geodemographics variables

Demographics

AgeGenderLocationEducationOccupationIncome LevelMartial StatusHousehold Type

Psychographics

Needs Security, esteem, love, acceptance, understanding, beauty,

good health

Values Status, success, greed, simplicity

Buying Styles Price, fads, quality, technology, luxury, convenience

Cultures Modern, artistic, religious, liberal, conservative,

environmental

Interests Sports, reading, fitness, cooking, workaholic, gardening

Market segment

Over the Edge Expeditions caters to sports thrill seekers and outdoor adventure enthusiasts between the ages of 18-44 with middle to high levels of income and education, which includes baby-boomers, women and minorities.

4. Develop the marketing mix

• Product

• Price

• Place

• Promotion

What is a Product?What is a Product?

• A PRODUCT is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or a need. – ServicesServices are an intangible form of product that

consist of:• Activities or

• Benefits

– offered for sale that don’t result in the ownership of anything.

Product Continuum

Source: Business Today, Ninth Edition, Mescon, Bovee Thill, Prentice Hall Publishers.Source: Business Today, Ninth Edition, Mescon, Bovee Thill, Prentice Hall Publishers.

Tangible DominantTangible Dominant Intangible DominantIntangible Dominant

GOODS

IDEASSERVICES

Sal

tS

hoes

DV

D P

laye

rA

utom

obile

Fast

Foo

dC

ruis

eC

onsu

lting

Insu

ranc

eE

duca

tion

Source: Business Today, Ninth Edition, Mescon, Bovee Thill, Prentice Hall Publishers.

Time

Sale

s Vo

lum

e (u

nits

)

+0±

Product Life Cycle

Internet Cellular Phones

VCRs Cassette Tapes

Introduction Growth Maturity Decline

Sales

Profits

Create a Clear Product Identity• include:

– Name– Niche– Quality– Color– Logo– Themes– Location– Selection

Name

• The business name should reflect the nature of the business

“Joe’s Accounting” describes the business

“Joe and Associates” leaves you guessing

Ask: How will my name sound on the phone?

On the radio?

What will it look like in ads?

On stationery?

If your business might attract prospects from the yellow pages, use a name that will be listed first…. Aardvark?

Whatever you do…do a name search to make sure you are not stepping on any toes…

Niche

• Find an unoccupied niche and claim your turf. A niche is a customer segment with unmet needs.

• Service your niche based on:

• Quality or service, speed or convenience, experience or low prices, innovation or selection or any other attribute for which you wish to be known.

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Essentials of Marketing

Product Perceptual Map for Different Brands of Bar Soap

Quality

• High quality leads to repeat and referral sales.

• Poor quality leads to dissatisfied customers.

Color

• Coca-Cola is red.

• McDonald’s is golden

• What is the right color for you?

• Green is a color often associated with anything natural

• Pink is feminine

• Gray is masculine

• Red goes well with low prices

• The color you choose should tie in with your products, niche, and identity.

Logo

• Many people are visually oriented.• Logos should be simple and easy to understand• Should be compatible with your name and identity• Professionally developed• Used everywhere…

Business cards, letterheads, signage, advertising and promotional materials

Themes, slogans

• A theme is a set of words that summarizes your identity.

• Themes should be placed in as many places as possible: brochures, ads, commercials, business cards, trade shows, everywhere.

• Slogans and Catchy Phrases• See how many of these phrases--product and campaign slogans, taglines and catchy phrases

from ads--are lodged in your mind. Match the phrase to its brand.• ___ a. “Don’t leave home without it.” 1. Maxwell House• ___ b. “Where’s the beef?” 2. Allstate• ___ c. “Builds strong bodies 12 ways.” 3. McDonald's• ___ d. “Melts in your mouth, not in your hand.” 4. Hallmark• ___ e. “How do you spell relief?” 5. United• ___ f. “When it rains it pours.” 6. General Electric• ___ g. “Reach out and touch someone.” 7. Yellow Pages• ___ h. “Takes a lickin' and keeps on ticking.” 8. Rolaids• ___ i. “99 44/100 percent pure.” 9. Wonder Bread• ___ j. “Fly the friendly skies.” 10. Timex• ___ k. “Let your fingers do the walking.” 11. AT&T• ___ l. “You're in good hands.” 12. M&Ms• ___ m. “You deserve a break today.” 13. Morton Salt• ___ n. “We bring good things to life.” 14. American Express• ___ o. “When you care enough to send the very best.” 15. Ivory Soap• ___ p. “Good to the last drop.” 16. Wendy's

Themes/taglines/slogans

Location

• Convenient to your target market

• Ample parking

• Clean / decorated

• Easy to find

• Large enough for all your needs

• You can afford it without busting your budget

Selection

• Everyone wants a choice.

• The more you emphasize your selection, the more likely your prospect will be able to decide you’ve got what she/he wants.

Table 14.1: Product-Mix Width and Product-Line Length for Proctor& Gamble Products

PRODUCT-PRODUCT-LINE LINE LENGTHLENGTH

Product-Mix WidthProduct-Mix Width

DetergentsDetergents ToothpasteToothpasteDisposable Disposable Bar SoapBar Soap DiapersDiapers

Paper Paper TissueTissue

Ivory Snow Ivory Snow (1930)(1930)

Dreft Dreft (1933)(1933)

Tide Tide (1946)(1946)

Cheer Cheer (1950)(1950)

Gleem (1952)Gleem (1952)

Crest (1955)Crest (1955)

Ivory Ivory (1879)(1879)

Kirk’s Kirk’s (1885) (1885)

Lava Lava (1893)(1893)

Camay Camay (1926)(1926)

Pampers Pampers (1961)(1961)

Luvs Luvs (1976)(1976)

Charmin Charmin (1928) (1928)

Puffs Puffs (1960)(1960)

Banner Banner (1982)(1982)

Summit Summit (1992)(1992)

10 - 33

BREADTH (DIFFERENT LINES)

Lawn mowers Gardening tools Lawn furniture

Power rotary

Power reel

Hand-powered

DEPTH

(ASSORTMENT

WITHIN A LINE) Rakes

Hoes

Shovels

Chairs

Chaise lounges

Benches

Each in varioussizes and prices

Each in varioussizes and prices

Various sizes and prices in redwood or aluminium withplastic webbing

Product Mix - An Example

Weapons Not Recognized as Part of Product Identity

• Business Cards

• Order Forms/Invoices

• Attire

• Phone Demeanor

• Smiles

Business Cards

• Are powerful selling tools• Use a typeface that is clear and easy to read• Include your area code, zip code and fax number• The feel of a good paper stock or the raised lettering

of your copy can turn a prospect into a customer.• Give more information than the usual name,

address, phone number.• Be unique without calling attention to your

cleverness.

Order Forms/Invoices

• Always show your logo• Pay close attention to all

the wording on the form. Are requests stated politely?

• Make your order form more than a boring business form.

• Examine the paper stock, size, and color. Are they marketing for you?

• Show the right numbers, date, price, and tax.

• Show the customer name, product name and your address

• Can you print something on them (calendars, etc. or things of interest to your customers).

Attire• Attire influences human behavior.• Navy blue signifies authority• Brown shows a lack of sophistication• Black shows too much power• Red calls a great deal of attention to the wearer• Each color puts forth its own message.• When in a dilemma be more formal than informal.• If you are sloppy people make the unconscious but

natural assumption that your company is sloppy too

Phone Demeanor

– The phone should be answered the same way each time

– The answer should be friendly and mention the company name

– More importantly, it should have a built-in warm smile

– Be polite regardless of the caller’s attitude

Smiles

• A smile forms a human bond.

• A smile shows you consider the person a human being.

• A smile says you are personally interested.

• A smile makes the person feel good.

Pricing Strategies

versus

Price conveys image.

Pricing decisions are determined by:

• A firm’s costs

• Customer perceptions

• Customer demand

• Competitor prices

• Your niche

Break-Even Analysis

Break-EvenPoint $$ Profits $$

More Than

$$ Losses $$

Less Than

Fixed costs

Selling price per unit-Variable costs per unit

Cost-Based PricingCost-Based Pricing

Break-Even Analysis

Price-Based Pricing

Establish Optimal PriceEstablish Optimal Price

Based onBased on

Customer Perception/Segment Characteristics

Customer Perception/Segment Characteristics

Figure in CostFigure in Cost

Advertising

Is paid, nonpersonal communication

Village Ice Cream

Advertising

• Establishes credibility for your business

• Allows you to repeat your message and gain access to the unconscious minds of your prospects and customers.

• Use the “free” “2-for-1” etc.

• Best day to run an ad is Sunday when people take the most time to read the paper

• Monday is good too – when men are reading the summarized sports section

• If you can, have the ad run on the right-hand page near the right margin and above the fold

• Trying adding one color to stand out

Major Advertising MediaMajor Advertising MediaMEDIUMMEDIUM ADVANTAGESADVANTAGES DISADVANTAGESDISADVANTAGES

Newspapers Extensive market coverage; low cost; short lead time for placing ads; good local market coverage; geographic selectivity

Poor graphic quality; short life span; cluttered pages; visual competition from other ads

Television Great impact; broad reach; appealing to senses of sight, sound & motion; creative opportunities for demonstration; high attention; entertainment carryover

High cost for production & air time; less audience selectivity; long preparation time; commercial clutter; short life for message; vulnerability to remote controls

Direct Mail Can deliver large amounts of information to narrowly selected audiences; excellent control over quality of message; personalization

High cost per contact; delivery delays; difficulty of obtaining desired mailing list; consumer resistance; generally poor image (junk mail)

Radio Low cost; high frequency; immediacy; highly portable; high geographic & demographic selectivity

No visual possibilities; short message life; commercial clutter; lower attention span than television; easy to switch stationsMagazines Good reproduction; long life; local &

regional market selectivity; authority & credibility; multiple readers

Limited demonstration possibilities; long lead time (from placing to publishing ads); high cost; less compelling than other media

Internet Growing reach; low cost; ability to personalize; can appeal to senses of sight, sound & motion

Difficulty in measuring audiences; consumer resistance, increasing clutter

Yellow Pages

• Do people look for businesses such as yours in the yellow pages?

• If so, the color red pays for itself in the yellow pages.

• Make your ad as large as possible within the constraints of your budget.

• Use words like: reliable, years in business, size of firm, licenses, certifications, degrees, awards.

• Convince the buyer that you are the best and most complete dealer for the product or service.

• Let people know where they can find you.

Circulars

• Can be distributed at your business

• Handed out on street corners

• Placed under windshield wipers

• Costs a few cents each

• Highlights the benefits of doing business with you (name, phone number, hours, theme line).

Direct-Mail Postcards and Doorhangers

• Use them with your customer list

• Make a special offer

• Stand out in some way – outstanding design or compelling offer

• Make sure you tell recipients what to do: visit a location, make a phone call, take an action.

Outdoor Billboards

• Can serve as an excellent reminder if your basic message can be done in 6 words or less.

• Also, if can write these magic words “NEXT EXIT” “TWO MILES AHEAD” “5 MINUTES”

• Generates impulse reactions and instant sales.

Free publicity

• To attract publicity you must have news of interest.

Tips for Stimulating Publicity

• Write an article of interest to customers

• Offer to be interviewed on TV/Cable and radio stations

• Publish a newsletter• Speak to local

organizations• Sponsor a seminar

Write news releases and fax them to the media

Serve on community and industry boards and committees

Sponsor a community project or support a nonprofit organization

Letters to the Editor

For example,

Articles, Courses, & Lectures

• The more credibility you have the more confidence your prospects will have in your business.

• Write articles on your topic of expertise for magazines and newspapers

• Don’t talk to sell – just give great advice – for free but give your company phone number so people can contact you for further information

Network

• Get the most out of this key business development tool– Set goals for every event– Give and get cards– Listen– Catalogue– Follow-up with both give and take

Club and Association Memberships

• Join social clubs, professional clubs, chambers, trade associations, etc.

• Why?

• You meet a lot of prospects

• You learn which customers are happy/unhappy and why

• You can strengthen relationships with customers

Trade Shows & Consumer Fairs

Good place to meet a lot of prospects all at once Great way to show the product in operation and provide

samples Make your booth a class act (have a sweepstakes that

people can enter simply by dropping their business cards into a bowl).

Distribute circulars directing people to your display Train your staff extensively Have a demonstration/video/sample in your booth Don’t forget business cards and brochures/flyers Follow up promptly

Evaluate everything you did and all costs

Community Involvement

• Develop a promotion involving a local school, church, etc.

• Establish tie-ins with community stores.

• Offer to distribute their brochures, if they’ll distribute yours.

• Post your own sign on local bulletin boards – supermarkets, churches, and clubs.

• Offer your product or service to local charities as part of their fund-raising efforts.

• Make special offers, with mailings, set to clubs in your community.

• Organize community events such as 10K races, essay contests, or painting contests. Give T-shirts to participants with your logo on it!

Why Contests and Sweepstakes?

1. To have people try your product or service

2. To make people aware of your product or service

3. To show people where to buy your product or service

4. To get names for your mailing list

5. To gain free publicity

Reprints of Ads & Publicity

• Have your advertisements and publicity do double, even triple duty.

• Have reprints made and give them away.

• Put them up in prominent places where everyone can read them

• Put them into a press kit

• Reprints ad credibility

Strategies for E-Success

• Consider forming strategic alliances• Promote your site online and offline

1. Register with search engines2. Create banner ads3. Use direct mail and newspapers 4. Issue press releases5. Put the company’s Web address on business cards and

anything else you can think of

Customer mailing list

Compile a loyal mailing list of people who have purchased from you.

1. Have a sign up book in your store

2. Add the names of all your customers

3. Have contests or sweepstakes in which people must write their names and addresses in order to enter.

4. Satisfy them by keeping in touch.

5. Invite them to sales.

Follow-up

1. A birthday card

2. A newsletter

3. A letter with a special offer

4. A postcard mailing program

5. A Christmas card

6. A contest or sweepstakes

7. The anniversary of when your customer became your customer

8. Customer Surveys

Stay in touch with your customers, because if you don’t someone else will.

Timing

• Now that you’ve decided what promotional tools to use, what order are you going to use them in?

Strike ZonePromotional Strategy

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Fliers Fliers Fliers Fliers Fliers Fliers Fliers Fliers Fliers Fliers Fliers Fliers Fliers

Publicity Publicity Publicity PublicityField Signs(Baseball)

Field Signs(Football)

Host Batting Clinic

BalloonFestivalBooth

MellonFestivalBooth

Host Sports Clinic

StoreCoupons

StoreCoupons

StoreCoupons

StoreCoupons

Direct Mail Direct Mail Direct Mail

News Ad News Ad News Ad News Ad News Ad News Ad News Ad

Radio Radio

Grand Opening

Event(Giveaways)

20042003Pre-Opening

Grand Opening

Event(Giveaways)

Step 6: Compute a Budget

• If you don’t do enough marketing, you whither.

• Do too much and you waste marketing dollars

• A good rule of thumb is 10% of sales

• If not sure, do some research

Budget

• Pre-Grand Opening– A budget of $3,500 has been allocated to fund pre-launch

promotional activities (included in business plan start-up costs)

• Ongoing– Research indicates that an Advertising spending level of

3% of sales is appropriate for Amusement and Recreation Services (SIC 799). Reference: U.S. Census Bureau Business Expense Report issued December 2000.

– Strike Zone will budget $7,500 in year one (equal to 4% of sales) to foster the initial growth period

SO WHERE DO YOU GO FROM HERE?

1. Market Research

2.Write a Business Plan

Market Research– Trade associations

– National and local press Industry magazines

– National/ international governments

– Web sites

– Informal contacts

– Trade directories

– Published company accounts

– Business libraries

– Professional institutes and organizations

– Previously gathered marketing research

– Census data

– Public records

Market ResearchWeb Sites

• www.sba.gov

• http://www.misbtdc.org

• www.bplans.com

• http://www.businessplans.org/businessplans.html

• www.business.gov

• www.enterpreneur.com

• www.medc.michigan.gov

• http://www.toolkit.cch.com

• www.fedstats.gov

• www.infomi.com

• www.semcog.org

• http://www.businessownersideacafe.com

• http://www.michigan.gov/businessstartup

• http://www.businesstown.com

• http://www.entreworld.org

• www.wsj.com

• www.census.gov

 

• See you next week!

Step 6: Write a Business Plan

73

Kay Reisen