1. Chapter 4 Developing the Right Marketing Mix
Entrepreneurship
Chapter 4
Developing the Right Marketing Mix
Mariotti: Entrepreneurship

2. Marketing Mix = the 4 Ps Product Price Place Promotion
Goal: Bring the right product to the right place at the right price with the right promotion.
Marriotti: Entrepreneurship

3. What Does the Price Tell Consumers About Your Product/Service?
Strategies:
Cost plus: cost plus profit margin
Penetration: low price early in PLC to gain market share
Skimming: high price early in PLC before competitors enter market
Meet or beat the competition
Marriotti: Entrepreneurship

4. Place Who are your customers? Where do they shop?
Goal: Find location affordable for you yet also convenient for customers.
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5. Promotion
Using advertising + publicity to get your market message to your customers
Advertising (purchased): billboards, TV ads, magazine ads
Publicity (free): mentions in media such as articles, stories on TV, etc.
Marriotti: Entrepreneurship

6. Promotional Ideas Banner ads Billboards Brochures Business cards
Direct mail
Catalogs
Discount coupons
Flyers
Gifts
Clothing bearing logo
Samples/demos
Special events
Team sponsorships
800 numbers
Marriotti: Entrepreneurship

7. Logos and Trademarks
Logo: identifying symbol for product/service or business.
Trademark: logo registered with U.S. Patent Office; may not be infringed upon
Infringement: illegal use of someone’s intellectual property
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8. Intellectual Property
Logos—protected by trademarking
Inventions—protected by patents
Art—protected by copyrights
Online intellectual property—protected by electronic rights (1998 Digital Millennium Copyright Act)
Marriotti: Entrepreneurship

9. Marketing Materials
Examples: brochures, posters, order forms, business cards, invoices
Should reinforce competitive advantage
Serve 3 functions
Help you organize your thinking
Enable you to teach others in company about the business
Enable you to sell product/service
Marriotti: Entrepreneurship

10. Media Print + Television + Radio = Media
Use media to generate publicity
Mail/fax pitch letter and press release
Pitch letter “pitches” the story of your business
Press release provides facts to answer: who, what, when,where, why, how?
Follow up with phone call
Marriotti: Entrepreneurship

11. Philanthropy
Giving money, time, advice, skills to help solve social or environmental problems
Foundations: nonprofits that collect donations for charities that help people, animals, environment. Ex: Habitat for Humanity
Many philanthropic foundations were started by entrepreneurs. Ex: Bill and Melinda Gates Foundation
Philanthropy creates goodwill: reputation, name recognition, positive customer relations
Marriotti: Entrepreneurship

12. Cause-Related Marketing
Inspired by commitment to a cause
Simple way to work philanthropy into your business
Examples:
Donate fixed % of revenue to charity
Donate product/service
Encourage employees to volunteer
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13. Nonprofit Organizations
Businesses whose mission is to contribute to greater good of society
Classified by IRS as 501 (c ) (3) corporations
Tax exempt—do not pay federal or state taxes; profits must be used for mission
Marriotti: Entrepreneurship

14. Relationship Marketing
Focus on establishing long-term relationships with customers.
Making the sale is just the beginning of the relationship with the customer.
More profitable strategy than transaction-oriented marketing (which focuses on making the sale).
Marriotti: Entrepreneurship

15. Fixed Costs
Marketing is a fixed costs, meaning it does not fluctuate (change) with sales.
Fixed costs (USAIIRD):
Utilities
Salaries
Advertising
Insurance
Interest
Rent
Depreciation
Marriotti: Entrepreneurship

16. Breakeven Analysis Q: Can you afford your marketing plan?
A: Calculate breakeven point.
Breakeven point: business is selling enough units to cover fixed costs.
If business is not breaking even, you can’t afford your marketing plan.
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17. Calculating Breakeven Units
Breakeven units = Fixed Costs (per month or per year)/Gross profit per unit
$180 fixed costs (per month)/$6 gross profit per unit = 30 units.
This business must sell 30 units per month to cover its fixed costs.
Marriotti: Entrepreneurship