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2. Entrepreneurship and Business Management

3. Marketing plan
Module 6

4. Think about it Where will I locate my business?
How will I determine the price of my product?
Which promotion methods will I use?

5. Introduction: The marketing mix
All four Ps must be integrated to form a successful marketing mix.
The marketing manager controls the four Ps.
Figure 6.1: The marketing mix

6. Product description
Unit 6.1

7. Product description
A product is an item that has been produced with the aim of satisfying customers’ needs.
Such a product can be tangible or intangible.
Tangible’ means that it can be ‘touched’.
Intangible items cannot be touched.
Each product possesses features and benefits.
A product feature is a characteristic of your product.
A product benefit is an advantage that a product offers to a customer.

8. Product description
When doing marketing, always sell the product benefits first and support this with the features of the product.
Figure 6.2: A tangible product consists of the product, packaging and labelling

9. Products can be classified into three types:
Industrial products
These are goods and services used to produce or manufacture other goods.
Examples are raw materials and machinery.
Consumer products
These products satisfy the needs of the consumer/households.
The consumer is the end user.
A distinction can be made between convenience, shopping and speciality goods.

10. Products can be classified into three types:
Services
Services are intangible (cannot be touched).
Consumption and production take place at the same time.
Examples are a laundry, a hairdressing salon, garden services, a guest house and accounting services.

11. Packaging Packaging is the wrapping that surrounds a product.
It protects a product, but also assists in the marketing of a product, as it identifies, describes, displays and promotes an item.
A distinction can be made between different types of packaging.

12. Packaging
Figure 6.3: Different
types of packaging

13. Labelling serves the following functions:
It provides the consumer with important information.
It describes the content.
It contains instructions and warnings.
It gives information about the ingredients/ contents.

14. Labelling
Figure 6.4: Nutritional values
on a labelled product

15. Important point
The Consumer Protection Act 68 of is very strict regarding the disclosure of all relevant information to the consumer.
This includes ensuring that there is detailed labelling, that the origin of the product is disclosed, that any applicable warnings are given, and that complete instructions are provided.

16. VIDEO: NEVER STOP TALKING ABOUT YOUR BRAND

17. Activity 6.1
Test your knowledge of this section by completing Activity (page 100 of your Student’s Book)

18. The importance of pricing for profit
Unit 6.2

19. The importance of pricing for profit
To be successful, a business needs to sell the correct product to the customer at the correct place and at the correct price.
The objective of most businesses is to make a profit.
A profit can only be made if cost calculations are done correctly.

20. Factors influencing pricing
Figure 6.5: Factors influencing pricing
Figure 6.6: The impact of cost reduction and other factors on profit

21. Factors that influence price
Table 6.1: Factors that have an influence on price
Factor
Influence on pricing
Competitors
A detailed competitor analysis must be done to determine your own competitive advantage.
No pricing can be done without taking the prices of competitors into account.
The customer
Who is your target market?
What are they looking for?
Cost
This will have a definite influence on your selling price and profit.
The higher the price that you have to pay for a product, the more difficult it becomes to keep your prices low.
Channels
Try to cut out middlemen (intermediaries).
The longer the distribution channel becomes, the higher the cost price will be.

22. Pricing techniques Pricing techniques include: Skimming price.
Penetration price.
Cost-plus pricing.
Competitive pricing.
Odd pricing.
Discounts.
Leader pricing.

23. Pricing concepts Total costs = Fixed costs + Variable costs
Mark-up = Selling price − Cost price

24. Activity 6.2 – 6.3
Test your knowledge of this section by completing Activity 6.2 – (page 102 – 104 of your Student’s Book)

25. What is meant by ‘promotion’?
Unit 6.3

26. What is meant by ‘promotion’?
‘Promotion’ means communicating with consumers to make them aware of products and to encourage potential consumers to buy these. proucts.
Figure 6.7: The promotion mix

27. Goals of advertising
Advertising is a non-personal, paid-for and persuasive form of promotion by identified sponsors through various forms of media.
A distinction can be made between business as opposed to product advertising.
Business advertising involves creating an image over time and adding intangible value.
Product advertising, on the other hand, focuses on an immediate, short-term reaction.
Figure 6.8: Business advertising

28. Selecting advertising media
Aspects that should be taken into account include the following:
Who is my target market?
How can they be reached?
What is my advertising budget?
How frequently do I want to advertise my product?
What is the most effective way of communicating with my target market?
What is the goal of my message?
What do my competitors do to advertise their products?

29. Selecting advertising media
Figure 6.9: Product advertising

30. Selecting advertising media
Figure 6.10: Advertising media

31. Developing an advertising plan
Advertising is costly and therefore thorough planning should be done.
This entails:
Creating the advertisement or advertising message.
Selecting the advertising media.
Measuring the success of the advertising.

32. Creating an advertisement
When creating a written advertisement, take note of the following points:
Clearly state the business’s name.
Include the logo and/or trademark of the business.
Include a ‘special’.
Be careful not to include too much detail and stimuli in the advertisement.
Make use of colour.

33. Creating an advertisement
When creating a written advertisement, take note of the following points:
Use different fonts.
Include the address and contact details of the business.
Use pictures and drawings, where applicable.
Use correct and creative language.
Put a border around the advertisement.
Keep the style consistent to enable customers to identify your business immediately.

34. Measuring the success of advertising
A good advertisement should meet the criteria as discussed under ‘Creating an advertisement’.
Another method that can be used to evaluate an advertisement is to use the AIDA principle.
The success of advertising is also measured by doing regular financial analyses.
Figure 6.12: What ‘AIDA’
stands for

35. Measuring the success of advertising
Compare the sales before and after advertising.
Compare the number of customers visiting your shop before and after advertising.
Build in something into the advertisement to measure the reaction.
Ask customers where they heard about the business/product.

36. Measuring the success of advertising
AIDA stands for ‘attention, interest, desire and action’.
Attention: Do something to grab the attention of the customer.
Interest: State the benefits and advantages of the product.
Desire: Show that you can solve the problem of the customer.
Action: Get the customer to buy your product.

37. The value of publicity Did you know?
‘Publicity’ means that a message or report about an enterprise is placed in a newspaper free of charge.
It can also be broadcast.

38. What is the value of publicity?
It is free.
It has a longer lifespan than advertising.
It reaches a far wider audience than advertising generally does.
It has greater credibility.
It must, however, also be remembered that negative publicity can harm the image of an organisation.

39. VIDEO: KNOW WHO TO LISTEN TO

40. Activity 6.4
Test your knowledge of this section by completing Activity (page 110 of your Student’s Book)