1. Marketing Section

2.  Def: Individuals or companies that are interested in your particular product or service and are willing to pay for it (Who & Where)  Put yourself in your customers’ shoes

3.  The following are questions you must ask:  Final Consumer Age, Gender, Income, Religion, Race Location How do they spend their time/money Needs or wants satisfied How many live in area Demand for product Where do they currently buy What are they willing to pay Competitive advantage  Business Consumer Industry Location Needs or Wants satisfied

4.  Def: Groups of customers within a large market who share common characteristics  Example:  Leisure services market is broken into following segments: Outdoor Adventurers Frequent Vacationers Couples who eat out often  Targeting the entire market would make ZERO sense.  Restaurant segment is broken down further: Fast Food Sit down Italian Food/Chinese Food

5.  Def: Description of the characteristics of the person or company that is likely to purchase a product/service  Demographics  Psychographics  Use-based data  Geographic data

6.  Sporting Goods Store  Individual 23 to 52 years of age  Participates in sports  Wants good quality sports equipment  Looks for good prices  Lives in Mendham  Average household income $42,000K/yr

7.  Def: Data that describes a group in terms of the following:  Age  Marital Status  Family Size  Ethnicity  Gender  Profession  Education  Income

8.  Def: Data that describes a group of people in terms of the following:  Tastes  Opinions  Personality Traits  Lifestyle Habits

9.  Def: Data that helps you determine how often potential customers use a particular service  Ex: If you were starting a travel agency, how often do potential customers travel

10.  Def: Data that helps you determine where potential customers live and how far they travel to do business with you  Ex: If you were opening a coffee shop it would be important to know that people are not willing to travel more than a mile for coffee

11.  Def: A system for collecting, recording, and analyzing information about customers, competitors, products/services  Can be expensive and time consuming  Primary Data vs. Secondary Data

12.  Information collected for the very first time  Used to identify and understand target market  Options  Surveys  Observation  Focus Groups  Disadvantages  Time consuming and Expensive

13.  Found in already published sources  Places to find it:  Publications issued by government or community organizations US Census Bureau Chamber of Commerce  Books on industry  Websites for Government or Business  Books on Entrepreneurs  Trade Magazines and Journals  Newspaper articles and statistics

14.  1. Define Question  Who is target market?  2. Determine Data Needed  What data do you need to collect  3. Collect Data  How will you go about collecting?  4. Analyze Data  5. Take Action  How will you use data to make decisions  6. Evaluate Results  Gage the decisions you make on data

15.  Direct Competition: A business that makes most of its money selling the same or similar products/services to the same market  Indirect Competition: A business that makes only a small amount of its money selling the same or similar products/services to the same market

16.  1. Make a list of competitors  2. Summarize the products and prices offered  3. Strengths and weaknesses of competition  4. Strategies and objectives of competition  5. Determine opportunities in market  6. Threats to business of competition

17.  Build Loyalty  If customers want to only shop at your business you don’t have worry about competition  How to build loyalty  Listen and respond to feedback  Superior service  More convenient hours  Store-specific credit cards  Personal notes or cards to say happy b-day/thanx  Frequent-buyer programs

18.  A plan that identifies how the goals you wish to achieve through marketing will be achieved  It should address  Product introduction or innovation  Pricing  Distribution  Promotion  Sales or market share  Projected Profitability

19.  Product or Service  Target Market  Competition  Marketing Budget  Business Location  Pricing Strategy  Promotional Strategy  Distribution Strategy

20.  Product Mix  Different products you will offer  Features  Colors, Size, Quality, Hours, Warranties, Delivery  Benefits  Healthy, cost effective, safe, reliable, long lasting  Branding  Name, symbol, design used  Packaging  Positioning

21.  Before you select strategy, you need to establish objective.  Maximize Sales  Discourage Competition  Establish Image  Increase Profits  Attract Customers

22.  The amount earned as a result of the investment (usually expressed as %)  If you want to receive a 15% return on your investment of $5,000 you would need to price your product so that it will earn $750  $5,000 x.15 = $750

23.  Business’s percentage of total sales generated by all companies in the same market  If MiniappleUS sells $192,500 in a market with a total size of $1,750,000, then you have an 11% market share.  If you have a new product then you have 100% market share

25.  Ways to increase market share:  Lower Prices  Advertising  Networking  If MiniappleUS wants 40% of the market and a 10% ROI I would need to generate $700,000 of the $1,750,000 of the market (1.75M x.40)  I decide to lower prices to gain traffic and once I increase market share I can raise prices slightly to increase my ROI.

26.  Demand Based Pricing  Find out what consumers are willing to pay for your product and price accordingly  Cost-Based Pricing  Using the wholesale cost and determine price with markup price.  If you chose to markup 40% for artichoke hearts that cost $1.77 wholesale you would do the following $1.77 x.40 = $.71 $1.77 + $.71 = $2.48  You would then sell your artichoke hearts at $2.48

27.  Time Based Pricing  A plumber charges $100 an hour for a job that is 1.5 hours would take in $150.  You must determine if you want to charge separately for parts and materials.  Bundling  Combining under one charge rather than making customer pay for each part of the service  Internet, Phone, TV

28.  Licensing  Process of selling your idea to a company for the development and launch of new product  Payment: Up Front Payment Royalties Payment on percentage of sales Annual Minimum You get paid a minimum amount each year regardless of sales

29.  Introductory Pricing  Sales will be low, marketing costs high, and little profit will be made at beginning of product life cycle Price Skimming Used when a product is new and unique and starts with a high price to recover costs for development As more competitors enter, price may be dropped Penetration Pricing Low prices to build a strong customer base Discourages competition

30.  Psychological Pricing  Based on belief that certain prices have impact on how customer percieves product Prestige Pricing Selling high to create a feeling of superiority Odd/Even Pricing Suggests that customers are sensitive to certain ending numbers ($29.99 vs $30.00) Price Lining Different levels of pricing for items Customers go to price they can afford Promotional Pricing Limited time pricing to increase sales Multiple Unit Pricing 10 for $10 which suggests a bargain and customers will buy more than if priced individually

31.  Discount Pricing  Customers are offered reduced price Cash Discounts Pay before this time, save money Company gets cash quicker Quantity Discounts Buy more and save Cuts down costs on business selling expenses Seasonal Discounts Used for selling seasonal merchandise out of season