McGraw-Hill/Irwin Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved. Chapter 8

Written Statement Of Marketing objectives, strategies and Activities to be followed in Business Plan

 MP responds to three Q’s  Where have we been ?  Where are we going ?  How do we get there ?  ‘E’ conduct market research to respond to these Q’s  Research involves Secondary / Primary data process  Helps in marketing mix & strategies  Why do many plan fails? You to find out?

 Who will buy the product or service ?  What is the size of the potential market ?  What price should be charged ?  what is the most appropriate distribution channel ?  What is the most effective promotional strategy to reach and inform potential customers ?  Focus Group not expensive technique for research Market Research involves gathering of data in order to determine such information: Market Research involves gathering of data in order to determine such information:

Step One: Defining the Purpose or Objectives Step Two : Gathering Data from Secondary Sources Step Three : Gathering Information from Primary Sources Step Four: Analyzing and Interpreting the Results

 Sit down & Make a list of the information that will be needed to prepare the marketing plan. Ex: ‘E’ may think there is a market for his product but is not sure who the customers will be So ask people what they think of the product or service and if they would buy it & background demographics  How much potential customers would be willing to pay for the product or service  Where the potential customers would prefer to purchase the product or service  Where the customer would expect to hear about or learn about such a product or service

 Newspaper articles- names, interviewed named should be scanned to make your research more authenticated with respect to market issues  Libraries: Published info about Industry, competitors, trends in consumer tastes & preferences, innovation in the market, Strategy employed by competitors  Government agencies-suppose i want to know what is the income level of the people living in hayatabad...so rather than doing all the hard work myself,i pick up the census data and extract the info that i need  Trade magazines: dept & Chamber of commerce  Internet Dept & Chamber of Commerce Local Banks/ Dept of Labor Local Media

Data collection procedures  Observation : record customers buying behaviors  Networking : experts in the field-valuable low cost method  interviewing: telephone- Mail- personal (adv & dis-adv)  focus groups: potential customers  Questionnaire: Table 8.3 sample questionnaire

 Can be hand-tabulated or entered on a computer  Results should be evaluated and interpreted in response to the research objectives  Data can be cross-tabulated in order to provide more focused results.  Example: Entrepreneur compare results of Q’ by different Age, Occupation, Location- fine tuning can provide valuable insights particularly regarding the segmentation of the market

 Designed to provide answers to three basic questions:  Where have we been?  Where do we want to go (in the short term)?  How do we get there? History of marketplace Marketing Strengths & Weaknesses of the firm Market Opportunities & Threats ‘Q’ addresses marketing Objectives & Goals- in next 12 months Q discusses Marketing strategy implementation- when it will occur- who will be responsible for monitoring

 A marketing plan should:  Provide a strategy.  Be based on facts/assumptions.  Describe an organization for implementation.  Provide for short-term and long-term continuity.  Be simple and short.  Be flexible.  Specify criteria for control. Assignment “Exams”

 Combination of product, price, promotion, and distribution and other marketing activities needed to meet marketing objectives. Marketing Mix Variable Critical Decisions Product Quality of components or materials, style, features, options, brand name, packaging, sizes, service availability, and warranties. Price Quality image, list price, quantity, discounts, allowances for quick payment, credit terms, and payment period. Channels of distribution Use of wholesalers and/or retailers, type of wholesalers or retailers, how many, length of channel, geographic coverage, inventory, and transportation. Promotion Media alternatives, message, media budget, role of personal selling, sales promotion (displays, coupons, etc.), and media interest in publicity.

 Define the business situation.  Define the target market: opportunities and threats.  Consider strengths and weaknesses.  Establish goals and objectives.  Define marketing strategy and action programs.

 Information for a new venture:  Describe how the product or service was developed.  Why it was developed.(satisfy consumers needs)  Information after a new venture has started up:  Present market conditions.  Performance of the company’s goods and services.  Future opportunities or prospects.

 Target market: specific group of potential customers toward which venture aims its marketing plan.  Knowledge of this provides a basis for determining the appropriate marketing action strategy.  Market segmentation: process of dividing a market into definable and measurable groups for purposes of targeting marketing strategy  Otherwise ‘E’ have to identify a product or service that would meet the needs of everyone in the marketplace  Allows the entrepreneur to more effectively respond to the needs of more homogeneous consumers.

 Decide on general market or industry to pursue.  Henry ford manufactured a single product(one color, one style, one size, etc)  Reebok Discovered that many customers who bought running shoes were not athletes (comfort & Style)  Divide market into smaller groups based on:  Characteristics of the customer Geographic Demographic Psychographic  Buying situation Desired benefits (e.g., product features) Usage (e.g., rate of use) Buying conditions Awareness of buying intention

 Select segment or segments to target.  Develop a marketing plan integrating product, price, distribution, and promotion. Example: Unique liquid Cleaner Restaurant grill at operating temperatures Restaurants Remove grease from household appliances Households Clean whitewall tires, bumpers & engines automobiles Boats Restaurant market is segmented by state, type of restaurant (fast food, family) R part of hospital, school, company etc

 Unique liquid cleaner  Strengths : -unique application: used on a hot operating grill with no discernible odor - prior experience of the Company in restaurant business and understanding the customers  Weaknesses - production capacity limited by space & equipment - lacks strong distribution system - lack of cash to support heavy promotional effort

 Establish realistic and specific goals and objectives.  Marketing goals and objectives respond to the question: “Where do we want to go?”.  ( market share, profits, sales, number of distributors, new product launch, pricing policy, sales promotion & advertising support)  Not all goals are quantifiable.  Number of goals or objectives can be limited to between six and eight.

 Specific activities outlined to meet the venture’s business plan goals and objectives.  Product or service  May consider more than the physical characteristics.  Packaging, brand name, price, warranty, image, service, delivery time, features, style, and even the Web site.  Pricing  Costs  Margins or markups  Competition

 Distribution  Provides utility to the consumer.  Must also be consistent with other marketing mix variables.  Promotion  Entrepreneur needs to inform potential consumers about the product’s availability or to educate the consumer  Methods include: print, radio, or television, Internet, direct mail, trade magazines, or newspapers.

 Weaknesses in market planning due to:  Poor analysis of the market and competitive strategy.  Unrealistic goals and objectives.  Poor implementation of the outlined plan actions.  Unforeseen hazards like weather or war.