Copyright © 2011 Pearson Education CHAPTER 8

 Marketing ◦ The process of creating and delivering desired goods and services to customers. ◦ Involves all of the activities associated with winning and retaining loyal customers.  National Federation of Independent Business Study ◦ 55% of small business owners say they do not need marketing because their products and services “sell themselves.” Ch. 8: Building a Powerful Marketing Plan8 - 2

Guerrilla marketing strategies: ◦ Are unconventional, low-cost, and creative marketing techniques that allow a small company to realize a greater return from its marketing investment than do larger rivals. ◦ Do not require large amounts of money to be effective – just creativity. Ch. 8: Building a Powerful Marketing Plan8 - 3

1.Pinpoints the specific target markets the company will serve. 2.Determines customer needs and wants through market research. 3.Analyzes a firm’s competitive advantages and creates a marketing strategy to build a competitive edge. 4.Helps to create a marketing mix that meets customer needs and wants. Ch. 8: Building a Powerful Marketing Plan8 - 4

 One objective of market research: Pinpoint the company's target market, the specific group of customers at whom the company aims its products or services.  Marketing strategy must be built on clear definition of a company’s target customers.  Examples: Great Call and Lexus of Palm Beach  Target customer must permeate the entire business – merchandise sold, background music, layout, décor, and other features.  Without a clear image of its target market, a small company tries to reach almost everyone and ends up appealing to few. Ch. 8: Building a Powerful Marketing Plan8 - 5

 Market research is the vehicle for gathering the information that serves as the foundation for the marketing plan. How to Conduct Market Research: 1. Define the problem. 2. Collect the data.  Individualized (one-to-one) marketing  Data mining 3. Analyze and interpret the data. 4. Draw conclusions and act Ch. 8: Building a Powerful Marketing Plan8 - 6

Ch. 8: Building a Powerful Marketing Plan Identify your best customers, never passing up the opportunity to get their names. Collect information on these customers, linking their identities to their transactions. Calculate the long-term value of customers so you know which ones are most desirable (and most profitable). Successful One-to-One Marketing Know what your customers ’ buying cycle is and time your marketing efforts to coincide with it - “ just-in-time marketing. ” Make sure your company ’ s product and service quality will astonish your customers. See customer complaints for what they are - a chance to improve your service and quality. Encourage complaints and then fix them! Enhance your products and services by giving customers information about them and how to use them. Source: Adapted from Susan Greco, “ The Road to One-to-One Marketing, ” Inc., October 1995, pp

 Find a niche and fill it.  Use the power of publicity  Don’t just sell; entertain! ◦ “Entertailing”  Strive to be unique.  Connect with customers on an emotional level. ◦ Build trust ◦ Define a unique selling proposition (USP) Ch. 8: Building a Powerful Marketing Plan8 - 8

 A key customer benefit of a product or service that sets it apart from its competition.  Answers key customer question: “What’s in it for me?”  Consider intangible or psychological benefits as well as tangible ones.  Communicate your USP to your customers often. Ch. 8: Building a Powerful Marketing Plan8 - 9

Ch. 8: Building a Powerful Marketing Plan FIGURE 8.1 The Connection between Branding and a USP Source: Based on Brandsavvy, Highlands Ranch, Colorado

 Social networks sites, such as Facebook and MySpace, allow entrepreneurs to connect with potential and existing customers at little or no cost.  More than half of Facebook users are over the age of 25.  These sites now offer business survey tools and advertising functions for promotional purposes. Ch. 8: Building a Powerful Marketing Plan8 - 11

 An estimated 113 million blogs exist with 5,000 of them from businesses.  Economical and effective online communication.  Blog Guidelines: ◦ Be honest, balanced, and interesting. ◦ Post blog entries consistently so that readers have a reason to return. ◦ Ask customers for feedback. Ch. 8: Building a Powerful Marketing Plan8 - 12

 Study: 19% of Internet users watch online videos every day.  Online video guidelines: ◦ Think “edutainment.” ◦ Be funny. ◦ Connect with current events. ◦ Involve customers. ◦ Keep it short. Ch. 8: Building a Powerful Marketing Plan8 - 13

Only 6% of customers who experience a problem contact the company to complain.  31% tell family members, friends, and colleagues about their negative experience.  6% of those people tell their “horror stories” to six or more people.  For every 100% of customers who have negative experiences with a business, the company stands to lose 32 to 36 current customers or potential customers. Ch. 8: Building a Powerful Marketing Plan8 - 14

 Because 20% of a typical company’s customers account for about 80% of its sales, no business can afford to alienate its best and most profitable customers and survive!  Research shows that repeat customers spend 67% more than new customers.  Attracting new customers costs the typical business seven to nine times as much as keeping existing customers. Ch. 8: Building a Powerful Marketing Plan (continued)

 Study: 60% of customers who change suppliers do so because of problems with a company’s products or services.  World-class companies treat quality as a strategic objective, an integral part of company culture.  The philosophy of Total Quality Management (TQM): ◦ Quality in the product or service itself. ◦ Quality in every aspect of the business and its relationship with the customer. ◦ Continuous improvement in quality. Ch. 8: Building a Powerful Marketing Plan8 - 16

 Reliability (average time between breakdowns)  Durability (how long an item lasts)  Ease of use  Known or trusted brand name  Low price  Tangibles - equipment, facilities, people  Reliability - doing what you say you will do  Responsiveness - promptness in helping customers  Assurance and empathy - conveying a caring attitude Ch. 8: Building a Powerful Marketing Plan8 - 17

The average U.S. work week is 42.5 hours, an increase from 37.5 hours in  Is your business conveniently located near customers?  Are your business hours suitable to your customers?  Would customers appreciate pickup and delivery services?  Do you make it easy for customers to buy on credit or with credit cards? Ch. 8: Building a Powerful Marketing Plan8 - 18

 Are your employees trained to handle business transactions quickly, efficiently, and politely?  Does your company offer “extras” that would make customers’ easier?  Can you bundle existing products to make it easier for customers to use them?  Can you adapt existing products to make them more convenient for customers?  Does your company handle telephone calls quickly and efficiently? Ch. 8: Building a Powerful Marketing Plan (continued)

 Innovation ◦ The key to future success. ◦ One of the greatest strengths of entrepreneurs. It shows up in the new products, techniques, and unusual approaches they introduce.  Entrepreneurs often create new products and services by focusing their efforts on one area and by using their size and flexibility to their advantage. Ch. 8: Building a Powerful Marketing Plan8 - 20

 Listen to customers.  Define “superior service.”  Set standards and measure performance.  Examine your company’s service cycle.  Hire the right employees.  Train employees to deliver superior service.  Empower employees to offer superior service.  Treat employees with respect and show them how valuable they are.  Use technology to provide improved service.  Use mystery shoppers to measure customer service  Reward superior service.  Get top managers’ support.  View customer service as an investment, not an expense. Ch. 8: Building a Powerful Marketing Plan Goal: To achieve customer astonishment!

 Use principles of time compression management (TCM): ◦ Speed new products to market ◦ Shorten customer response time in manufacturing and delivery ◦ Reduce the administrative time required to fill an order.  Re-engineer the process rather than try to do the same thing - only faster.  Create cross-functional teams of workers and empower them to attack and solve problems.  Set aggressive goals for production and stick to the schedule.  Rethink the supply chain.  Instill speed in the company culture.  Use technology to find shortcuts wherever possible.  Put the Internet to work for you. Ch. 8: Building a Powerful Marketing Plan8 - 22

P roduct P lace P rice P romotion Ch. 8: Building a Powerful Marketing Plan8 - 23

 Introductory stage  Growth and acceptance stage  Maturity and competition stage  Market saturation stage  Product decline stage Ch. 8: Building a Powerful Marketing Plan High Costs High Costs Profits Peak Profits Peak Sale s Peak Sale s Peak Sales & Profits Fall Sales & Profits Fall High Costs Sales Climb Profits Peak Sales Peak High Costs Sales Climb Profits Peak Sales Peak ( continued )

FIGURE 8.4 Time between Introduction of Products Ch. 8: Building a Powerful Marketing Plan

Ch. 8: Building a Powerful Marketing Plan Manufacturer Consumer Retailer Consumer Manufacturer Retailer Consumer Wholesaler Manufacturer Retailer Consumer Wholesaler

Ch. 8: Building a Powerful Marketing Plan Price  A key factor in the decision to buy  Focus attention on non-price competition ◦ Free trial offers ◦ Free delivery ◦ Lengthy warranties ◦ Money back guarantees

Ch. 8: Building a Powerful Marketing Plan Promotion  Goal: To inform and persuade.  Through advertising and other communication techniques.  Create an image.  “Marketing is not a battle of products; it is a battle of perceptions.”

Ch. 8: Building a Powerful Marketing Plan Conclusion  A guerrilla marketing plan offers the entrepreneur significant benefits.  Target marketing is key.  Create a competitive and edge through customer focus, quality, convenience, innovation, service and speed.