module 5 marketing plan. 2aboriginal banking marketing the majority of individuals asked, “what is...

Module 5Marketing Plan

2 Aboriginal Banking

Marketing

The majority of individuals asked, “what is marketing?” respond by explaining advertising. Marketing is the most critical component of all business plans.

Marketing is the process of examining the wants and needs of others and then satisfying those needs with products and/or services. A popular slogan that describes marketing is “Find a need and fill it.” For the purposes of the E-Spirit competition the marketing module will only provide a superficial overview of the marketing process.


Marketing Plan

Marketing Basics: The Marketing Concept was introduced in the 1950’s and has been adopted as the standard for business. The marketing concept consists of three key components for marketing success:

To market your product successfully, you need to know at least the following:

Who is going to buy? Where will they go to get it?

Why buy from you? How much will they pay?

What is it they want? How much will they buy?

How will you sell it? How much profit do you want?


Targeting Your Market

> What characteristics of our potential consumer should be examined?– Income– Education– Buying patterns– Geographical location– Interests/hobbies– Current trends– Current and future competition (who is the customer buying from

now?)


Targeting Your Market

> Others (how many other characteristics can you think of?)


Primary and Secondary Markets

It can be useful to separate your target market into the most likely clients and the less likely clients:

Primary markets: The most obvious or biggest group of buyers for your product or service. Ex.: the primary market for the baby-clothing store is young moms and dads with a moderate income.

Secondary markets (and sometimes even tertiary or third markets): An area or group of buyers from which you could capture some sales. Ex.: Here are two possible secondary markets for the baby-clothing store:


Primary Research

This means gathering information yourself for the first time, because the exact information you need doesn't already exist anywhere. Primary research usually involves people surveys.

Example: The primary (main) target for the baby-clothing store is young moderate-income families. We want statistics to find out if that market exists in our area, and if that market will support our store. The best way is to ask our community directly. That's primary research!


Primary Research: Surveys

Surveys: Whether you live in a small community or in a larger area, you would have trouble surveying everyone in the area. So instead, you survey a small, typical group. This is known as a representative sample. From that sample, you can make an estimate for the larger group. Even big professional market research firms rely on representative samples to do their studies.

You can do your survey by telephone, mail, e-mail or in person. Each method has its advantages and disadvantages:

Telephone surveys are cost effective and quick, and have a reasonably good response rate (50% to 60% percent of people are willing to answer).


Surveys

Mail is cheaper, but you get what you pay for: a much lower response rate (5% to 15% of people take the time to fill out the questionnaire and send it back).

E-mail has become a major marketing tool. At the same time, people get more and more spam. You don't want people to delete your survey before they even look at it.

In person surveys at community functions (powwows, dances and conferences) or mall interviews take the most time and are usually the most challenging. But they can give you useful information because you also get people's comments and reactions.


Questionnaires

No matter what method you choose for your survey, you first have to prepare your questionnaire. After your team has decided on the questions it wants to ask, try out the questionnaire on family members. See what Kokum (Grandma) thinks. Or ask some of your future customers for their comments.

Some sample questions:

Do you have children or grandchildren between the ages of 1 month and 12 years?

Where do you usually shop for children's clothing? Is it a convenient location?


Secondary Research

What about secondary research? That's when you use information that already exists. If someone has already gathered business information about your potential market, use it! Remember, the more you know about your market, the easier it will be to figure out who your ideal customers are. Ex.: you should be able to find data on how many people live in your area, average incomes, and average ages.

The trick is to find the source of information you need for your particular business. That's why it's called research: it's not likely to land on your desktop in a neat package!


Secondary Research

Good sources of information for starting-up your small business include:

Local business associations: hotel and restaurateurs associations, Retail Council of Canada, etc. ; Junior Achievement ; Local chambers of commerce; Economic development organizations ; Local public libraries; The yellow pages; University and college business departments and their libraries; Government offices, like the archives departments; First Nations and Métis Capital Corporations; Community Futures Development Corporations; Indian Affairs (general reference Web site).


Secondary Research

The following Web sites can also help you:

> Family Expenditures in Canada

> Dun & Bradstreet

> Strategis

> Canadian Census data from Statistics Canada

> Canada Business Service

> Centre Scott's Directory of Canadian Manufacturers and Suppliers.

> Canadian Almanac Directory.


Consumer Behaviour #1

Why do customers decide to purchase certain products or services over others on the market?


Market Segmentation

No business can have one marketing strategy and reach everyone. The world is just too big. There are too many different people and businesses out there. That's why companies try to attract specific groups or types of people. These are called market segments.

Big business and corporate America really capitalize on this. They realize that people have different needs, and they design their products to meet those needs.


Market Segmentation: Example

> Shampoo companies have different marketing strategies for different market segments. Here are some of the messages you will find when you stroll down the shampoo aisle:– Clinically proven hypoallergenic for sensitive heads – Baby soft – UV protection in shampoos and conditioners for people worried about

the ozone – Shampoo for normal, color treated, permed, or damaged hair – Shampoo to give a smooth and sleek look

> And the list goes on!



To satisfy a want, need, or

perceived want or need

> Impulse

> Major purchase

> Trend

> Emergency

> Gifts

> Holiday


Team Responses

> Business

> Other?



What process does the typical consumer undergo prior to purchasing a product or service?

Awareness– Consumer must be aware of your product or service (advertising)

Information Gathering– Gathers information concerning similar products or services

Evaluation– Makes a decision based on research gathered



Purchase– Purchases the product or service of their choice

Post-Purchase– Decides if the decision was a good one!

REMEMBER THE LAST GREAT PURCHASE YOU MADE, HOW MANY PEOPLE DID YOU TELL?

REMEMBER THE LAST BAD PURCHASE YOU MADE, HOW MANY PEOPLE DID YOU TELL?


Product and/or Service

What product is your business going to sell? (Remember that your product can also be a service). Whether you are selling used CDs, gas, a new line of clothing, natural products, or environmentally friendly products, the customer has to want or need to buy it!

The big question then becomes: Why would someone buy your product?

What unique or special features does your product offer customers? To answer that question , think of your target market. How is your product supplying something that the people in your market need, regularly use, or want?


Examples

Ziggy's Video & Internet will offer an extensive selection of video games, movies and high-speed Internet service for all your home entertainment needs.

Ziggy's Video & Internet is a progressive business recognized by the technology community as a leader in the support of information technology solutions.

When you explain the features of your business, remember not to confuse this with the benefits.


Product Pricing

How do you set a price for your product or service?

What does it cost to produce? (Cost-based pricing)

How many units or services must be sold to start making a profit? (Break-even analysis)

Will price be based on industry average or competition?

Price will be based on consumer perceptions for a quality product or service. (Target market considerations)

Other? How many other ways can you set the prices for your product?


Price: Costs

When you calculate how much it costs to produce your product, you should consider the following:

Cost of goods means everything you have to buy in order to make and sell your product. If you are in a service industry, you should include the products and services you buy from your suppliers.

Labour includes the people you have to pay to get your product manufactured, packaged and delivered to stores.

Overhead expenses are your business' monthly expenses, such as; rent; taxes; utilities; equipment costs; phone; office supplies postal/shipping/courier costs; bank loans; equipment rental to use at events; supplier rental equipment.


Price: Costs

Advertising, marketing and sales

The customer has to know you exist before they can buy from you! What's the best way to let your target market know about your business? How much will it cost?

If you are thinking about advertising, make sure you are reaching your market. Does your typical potential customer read the newspaper, watch TV, or surf the net?

Your team can also market the business every day by networking in the community. Word of mouth can be an effective way to spread the word about your company. You can also advertise in local magazines and actively participate in community happenings.


Price

Here are some other things to consider:

What is your competition charging for their service or product?

Who is your company catering to: is it middle-class families, or families on a budget, etc?

What is the customer in your market willing to pay?

How will you generate sales?

Have you included these costs in your price?

Will your company be provided payment terms, allowing you to pay later?


Pricing Strategies

1. Skimming– Price high than competition (upscale customer)– Low sales volume – high return (per unit)

2. Penetration– Lower prices than competition (attract consumers)– Gain market share– High volume sales-low return (per unit)


Pricing Strategies

3. Demand Oriented– Prices may vary for differing customer (example: movie theatres child

prices vs. Adult prices)– Different consumers are willing to pay for your product/services but at

different prices

4. Leadership– Prices are set the same as the “industry” leader (What is good for the

goose strategy)– Leadership strategy accounts for the rationale of why all candy bars cost

the same or soft drinks!


Pricing Strategies

Competition – Oriented– Prices are based on what ALL of your competition is doing– Prices dependent on consumer perceptions, loyalty, business image,

customer service, warranties, etc.– Prices can be above or below competition prices


Place

1. Where is your potential customer most likely to shop for your product or service? Most likely, in a location that is convenient for your customer. Consider that when you choose your site.

2. When is your customer most likely to buy your product? If your shop is always closed when the customer is shopping, then it won't matter if you're in the best possible location. So choose your hours of operation carefully.


Place: Distribution Channels

Distribution channels

Your product goes through several steps from the time it is manufactured, until the time it is purchased by the final consumer (or the industrial client like a construction company). The final consumer is the person who buys an item for personal use, and not for resale.

The different steps the product goes through are called intermediaries. There are 2 types of intermediaries:

Wholesalers are the people or businesses that sell to the retailers or construction companies, but hardly ever to the final consumers. Wholesalers are also called suppliers or distributors.

Retailers are the business people or businesses that sell the goods to the final consumers.


Example

> McCain Foods manufactures fries in potato land: Carberry, Manitoba.

> The fries are sold to a wholesaler (who stores them)

> The wholesaler sells them to a supermarket (retailer)

> And finally they are sold to the customer—that's you.


Let’s Recap

> http://www.youtube.com/watch?v=Tb8bF2hCyLw&feature=related

> Know your customers: Where will they shop? At what times of the day, and on which days of the week will they shop?

> What is the cost of your building location? Is it worth your hard-earned money?

> Who is your competition?

> Is your location safe for your customers, your team and Mother Earth?


Promotion and Advertising

To figure out which promotional tools will help you meet your marketing goals, with your budget, you need to do some more research think about your customer be creative.

This will keep you from wasting money and time on strategies that won't work for you. Ex.: advertising your business in the newspaper is a waste if your target market tends to listen to the radio.

Have fun and remember to be honest about your product and promotion of your business.


Promotional Plan

Marketing: You may choose to provide and distribute materials like brochures, newsletters, flyers, posters, etc. Make sure your documents (and your logo) are catchy and filled with information.

What do you think should be included in your promotional plan?


Promotional Activities

This includes;

> sponsorships for special events

> participation in community projects, powwows, trade shows, friendship and youth centres, job/health fairs

> contests and give-aways (with your logo on the items)

> coupons, free samples

> public speaking events

> advertising

> outdoor advertising (billboards and bus boards)

> radio and Internet sites.


Name, Logo and Slogan

We talked about these in Module 2. But let's look at them more closely. These three things are important because they get repeated in all your documents and promotional activities.

Your company should have a powerful name, logo and company slogan. These will improve your business image and reputation, attract attention and stimulate curiosity. They should:

> connect with your consumers

> make a lasting impression

> say something about your values.


Name, Logo and Slogan

Use your slogan everywhere; TV, print advertisement, posters, Web sites, direct mail, tradeshows and meetings.

Like the slogan, your business name can say a lot about your product or service. The best names are short, sweet and descriptive. Describe your product or service and convey important selling points. For example, if using recycled products will appeal to your customers, mention that in your name.

Again, it's more important that your name be clear than clever. Ex.: I doubt anyone would know what my business is, if I called it BCARS—Biological Consumer Accredited Reengineering Systems.


Competition

Do you know who your competitors are and what they have to offer? It's time to find out.

This is called a competitor analysis or survey. The process takes some time but it's worth the effort. It will help you find out your competitive advantage:

What can your business offer that others can't?

What customers want: Are their needs being met? How can you meet those needs?


Competition

Ask yourself the following questions:

> Who are my competitors? But don't forget that competition isn't limited to your specific product. It also includes other related and replacement items. Ex.: If you sell ice cream cones, your competitors, naturally, include other ice cream cone vendors. But you're also competing with vendors of other desserts.

> What are the strengths and weaknesses of the competition? Consider price and selection, location and business hours, quality, advertising, staff, distribution methods and customer service.

> What are their selling features? Can you improve on these?

> On what basis do they compete? Are they friendly or totally driven?


Competition

From your survey, you will have some information about the why but not the how. Here are some ways to get more complete information on your competitors:

> The Internet

> Community functions

> Sharing circles: listen to the people

> Telephone books

> Personal visits: go to your competitor's location and observe what they do

> Talk to customers, Elders and other people: listen to what customers are saying about your competitors

> Ads and presentations.


Marketing Common Mistakes

1. Not knowing your market (Where you do business)

2. Unclear target market (Your customer)

3. Trying to capture the entire market “shot gun approach”

4. Assuming your market will buy your product without concrete evidence (survey, ask!)

5. Not knowing how you are going to promote your product or service, through what means? (Newspaper, T.V., newsletter, other?)

6. Forgetting details such as when, where, why and how you will reach your target customer – along with expenses


Marketing Common Mistakes

7. Underestimating the importance of customer loyalty and perceptions

8. Forgetting what business you are in?

9. Not having a clear vision, goals and objectives

E-Spiritwww.bdc.ca/en/espirit

module 5 marketing plan. 2aboriginal banking marketing the majority of individuals asked, “what is...

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