Unit 5 Marketing for the Small Business Small Business Operations

What is Marketing?  Marketing is the creation and maintenance of satisfying exchange relationships. Marketing, 3e, page 9  The marketing concept is using the needs and wants of customers as the primary focus of all business decisions – satisfying customers while making a profit. Marketing, 3e, page 19 Frameworks 5.1

The Marketing Mix  The elements of marketing, also known as the marketing mix or the 4 P’s, are: –Product –Price –Place/Distribution –Promotion Source: Marketing, 3e, pages 22-23Frameworks 5.2

Product  The product is anything offered to the market by the business to satisfy customers needs, including services, ideas, events, and places. Frameworks Source: Marketing, 3e, pages 23

Price  The price is the amount that customers pay for the product or service. Frameworks Source: Marketing, 3e, pages 23

Calculate Product Price Fruit Smoothie 46 ounce bottle = $ 9.76 Sales tax (8%) = 9.76 x.08 =.78 Cost Plus Tax = $10.54 per bottle $10.54 divided by 46 ounces =.23 per ounce.23 x 4 ounces per cup =.92 per cup.10 cost for cup.02 cost for lid TOTAL COST = $ 1.04 per cup Markup 140% = $1.04 x markup (1.40) = $ $1.04 = $2.50 retail price

Place or Distribution  The place or distribution includes the locations and methods used to make the product available to customers. Source: Marketing, 3e, page 23 Frameworks 5.2.2

Promotion  Promotion includes the methods used and information communicated to encourage customers to purchase and to increase their satisfaction. Marketing, 3e, page 23 Frameworks  Viral marketing is a promotional approach that encourages people to pass along a marketing message by word-of-mouth. The internet has allowed viral marketing to have an almost immediate impact. Marketing, 3e, page 599

The Product Mix  A product line is a group of similar products with slight variations in the product mix to satisfy different needs in the market. Marketing, 3e, page 287  A product assortment is the complete set of all products a business offers to its customers. Marketing, 3e, page 287 Frameworks 5.2.3

Evaluate the Product Mix of the SBE  Is the product mix appropriate for the target market?  Should any products be deleted from the product mix?  Are there any products that should be added to the product mix?  Should additional services be added to make the purchase of products easier or more enjoyable? Example: What is the feasibility of a delivery service or an on-line component of the SBE? Frameworks 5.2.3

Competitive Strategies  Competition is the rivalry among businesses for consumers’ dollars. Business Principles and Management, 12e, page 65  Price competition is the rivalry among businesses based on price and value. Marketing, 3e, page 196  Non-price competition occurs when businesses compete on factors other than price. Marketing, 3e, page 196 –Atmospherics are the elements of the shopping environment that are appealing to customers, attract them to a store, and encourage them to buy. Marketing, 3e, page 384 –Visual Merchandising is the coordination of all the physical elements that are used to project the right brand image to customers. Frameworks 5.3 & 5.4

The Role of Competition in Business  Competition forces businesses to offer reasonable prices.  Competition encourages businesses to improve existing products and add benefits and features to their product offerings.  Competition forces business to continuously search for new product ideas.  Competition offers consumers the benefit of a wide variety of products from which to choose. Frameworks Source: Marketing, 3e, pages

The Importance of Atmospherics Frameworks 5.4.2

The Importance of Visual Merchandising Frameworks 5.4.2

Developing Relationships with Customers  Relationship marketing focuses on developing loyal customers who continue to purchase from the business for a long period of time. Marketing, 3e, page 27 –Build trust with the customer. –Communicate with customers to determine the best products and services to meet their needs. –Immediately solve problems encountered by the customer. Frameworks Some Harley-Davidson customers are so loyal to the company that they have tattooed themselves with the company’s brand name.

Personal Selling  Personal selling is direct, face- to-face contact, with potential customers to assess their needs and satisfy those needs. Marketing, 3e, page 477 –Greet the customer. –Determine needs – observe, question, listen. –Demonstrate/present the product. –Answer questions. –Suggestion selling. –Follow up. Source: Marketing, 3e, page 493 Frameworks 5.6.1

Personal Selling - continued  Suggestion selling is offering additional products and services after an initial sale in order to increase customer satisfaction. Marketing, 3e, page 497 –A customer who purchases notebook paper and a 3-ring binder might also need a pencil or an ink pen. –A customer who purchases a handbag might also enjoy having a matching wallet. Frameworks 5.6.1

Personal Selling - continued  Substitute selling involves suggesting items other than the original request when the original request is not available. –Never tell the customer that what they’ve requested is unavailable without offering a similar product as a substitute. –If the school based enterprise is out of frozen mocha mix, offer the customer a “refreshing and healthy” all fruit smoothie. Frameworks Source: Marketing Essentials, 2009, pages

End of Unit 5  Visit the website to review the terms associated with this unit of instruction.  If you have not already done so, create an account with Quizlet.com.  Use your first and last name (without a space) as your login.  Use your first name (or anything you can remember!) as your password.  Using the Quizlet.com search feature, search for cdorman and find Mr. Dorman’s dashboard.  Open the Subjects folder “Small Business Operations.”  Study the flashcards.  Use the test feature and use the scatter feature.