steve kaplan: marketing 101

Marketing 101:The Fundamentals

Presented BySteve Kaplan

Marketing 101: The Fundamentals Slide 2 of 153™

| COURSE OUTLINE

Objectives of this course…

• To help you understand what marketing is.• To help you learn how to conduct market research.• To help you understand how to analyze your market environment and determine your target market.

• To help you determine how to position your product.• To educate you on the 4 P’s (product, price, place & promotion) and how to apply them to marketing.

• To show you the basics on how to create a marketing plan.


| COURSE OUTLINE

Course Outline1. What is marketing?

2. Conducting market research3. Analyzing the market environment4. Selecting your target markets

5. Market positioning

6. Designing products & services

7. Pricing products & services

8. Placing products & services.

9. Promoting products & services

10. Creating a marketing plan


| COURSE OUTLINE

1What Is Marketing?


| COURSE OUTLINE

What is marketing?• Most people mistakenly identify marketing with selling and

promotion.• While selling and promotion are a part of marketing, they

are not most important part.• In Principles of Marketing Philip Kotler stated:

• If the marketer does a good job of identifying consumer needs, developing appropriate products, and pricing, distributing, and promoting them effectively, these goods will sell very easily.


| COURSE OUTLINE

Defining Marketing…• Marketing can be defined as an activity directed at

satisfying needs and wants through exchange processes.• The ultimate goal of marketing is to make selling

nonessential,• To know and understand the customer so well that the

product or service fits him or her and sells itself.


| COURSE OUTLINE

Goods, Services, & Ideas…• Marketing deals with goods, services, and ideas.• A good is something someone can touch.• A service is providing an intangible benefit to customers.• An idea can include concepts or images.• For this course, we will use the word product to refer to

goods, services, and ideas.


| COURSE OUTLINE

Needs, Wants, & Demands…• One of the underlying concepts of marketing is trying to

satisfy a customer’s needs, wants and demands.• Needs are plentiful. Basic human needs include food,

clothing, warmth, safety and belonging.• Wants are simply needs shaped by culture and the

individual.• Demands are simply the wants of a consumer when

backed by the ability to pay for that want.


| COURSE OUTLINE

Exchange Processes…• Marketing usually occurs to help facilitate an exchange

between a buyer and seller.


| COURSE OUTLINE

Dynamic marketing environment…

• There are many forces that affect the marketing environment, including:• Competition• Laws and Regulations• Economic and Social Conditions• Cultural Factors

• These forces can be dramatic and difficult to predict.• Be aware of these forces because they can create threats and generate opportunities for your business.


| COURSE OUTLINE

The marketing mix…• The marketing mix is another important concept when it

comes to marketing.• The marketing mix refers to activities that a firm can

control to produce the response it wants from the target market.

• These variables can be categorized into four groups, also know as the four P’s of marketing.


| COURSE OUTLINE

The 4 P’s of marketing…1. Product – This is what you are offering to your target

market, be it a tangible product or a service.2. Price – The amount you will charge for your product.3. Place – Channels your product will go through to reach

the customer.4. Promotion – How you raise awareness with your

target market.


| COURSE OUTLINE

The 5th P of marketing…• While the previous four P’s are important to the marketing

mix, there is one that is left out.• Positioning• Positioning is not dealing with where you will place your

product in the market, but where you will place you product in the mind of the consumer.

• Marketing Mix worksheet


| COURSE OUTLINE

2Conducting Market Research


| COURSE OUTLINE

Marketing research data…• There are two main types of data that will help you in

researching your market.• The first is secondary data. Secondary data is

information that already exists somewhere. It was collected for another purpose.

• Primary data, consists of information collected for the specific purpose at hand.


| COURSE OUTLINE

Start with secondary data…• Researchers will usually start by collecting secondary data.

• Secondary data can be obtained quicker and at lower costs.

• When collecting secondary data evaluate it carefully to make sure that it is:• Relevant• Accurate• Current• Impartial


| COURSE OUTLINE

Researching your industry…• With all the resource outlets that exist today, there are

many opportunities for you to gather secondary information on the industry you will be participating in.

• The following sources should help you in getting started:• NAICS Code • Hoovers• Standard & Poor’s • Trade Associations


| COURSE OUTLINE

Researching your customer…• Before you start researching your customer, it is important

that you determine whether they will be individuals in a particular area or if they will be other businesses.


| COURSE OUTLINE

Researching consumers…• There are many secondary data sources for researching

consumers.• Consumer expenditure surveys

– Census data

– Demographics

– Psychographics

• VALS – (Values, Attitudes, & Lifestyles Surveys)

• Zip code psychographics


| COURSE OUTLINE

Researching businesses…• If your target customers are other businesses, the

following links may be helpful in conducting research:• Business expenditure survey

– Economic census

– IRS data


| COURSE OUTLINE

Estimating your market size…• After you have determined who your customer will be and

found some of their characteristics,• You need to estimate the size of your target market.• IRS, Census, RMA, and Dun & Bradstreet are all sources

that can help you estimate your target market size.


| COURSE OUTLINE

Collecting primary data…• Since primary data does not already exist it can become

very costly and time consuming to gather.• There are several ways to collect primary data.• The most common methods are observation, survey, and

experiment.• These methods can be done by mailings, telephone calls,

and personal interactions to name a few.


| COURSE OUTLINE

The three research approaches…• Data is gathered in the observational approach by

watching people in either a natural or artificial setting.• The survey approach is best suited for those who are

looking to gather descriptive information.• The experimental approach involves selecting two groups,

giving them different treatments, and then measuring the effects.


| COURSE OUTLINE

Contacting research subjects…• With mail questionnaires you can collect a fairly large

amount of information at a low cost.• Telephone interviewing costs more than mail

questionnaires but can provide more information quickly.• Individual interviewing is another way of gathering

information. This type of interviewing may require an incentive to get people to participate.

• Gathering a group of people together to discuss certain topics with a trained interviewer is known as group interviewing.


| COURSE OUTLINE

The anatomy of a questionnaire…• When developing a questionnaire keep the following in

mind:• Take your time to make sure that it is carefully developed and

tested.• Carefully choose your wording of each question.• The sequence of the questions is also important.• Make sure that all the questions included in the survey are

necessary.


| COURSE OUTLINE

Interpreting market research…• Interpreting data can easily become overwhelming if you

are not careful. • Make sure that you report only major findings.• Do not use too many statistical analyses just for the sake

of using them.• Put your findings into simple terms so that even someone

not familiar with the survey will be able to understand them.


| COURSE OUTLINE

3Analyzing The Market Environment


| COURSE OUTLINE

Macro and micro environments…• The marketing environment is made up of two

environments;• The microenvironment is the immediate environment

that effects the companies ability to serve customers.• The macroenvironment consists of larger social forces

that affect all players in the microenvironment.


| COURSE OUTLINE

Analyzing your company…• All groups in a company - Accounting, R&D,

Manufacturing, Top Management – are part of a company’s microenvironment.

• All these departments will have an impact on the marketing decisions and actions of the company.

• For this reason, the marketing manager should try to work closely with these departments and others when establishing a marketing plan.


| COURSE OUTLINE

Distribution channels...• Distribution channels will also play a role in the

microenvironment.• Suppliers, middlemen, warehouses and transporters are

just a few of the factors that will effect the business.• Be aware of these factors and how they will affect your

market planning and decisions.


| COURSE OUTLINE

Analyzing your customers…• Which customer market will the company operate in?

• Consumer• Industrial• Reseller• Government• International

• Each of these markets’ characteristics should be analyzed on how they will effect the company.


| COURSE OUTLINE

Competitive forces…• The number of firms that supply a similar product will play

a role in the competitive environment.• Once you determine the number of competitors, you

should then analyze competitive tools that will set you apart from the competition or give the competition an advantage over you.

• The first competitive tool most companies will use is price.


| COURSE OUTLINE

Monitoring competition…• Be aware of the actions of your competitors.• Also develop an understanding of the market you are

participating in,• and what the customers in this market want.


| COURSE OUTLINE

SEPTE analysis…• A SEPTE analysis is a process that helps in analyzing the

macroenvironment.• SEPTE stands for…

• Social environment• Economic environment• Political and legal environment• Technological environment• Environmental issues


| COURSE OUTLINE

Social environment…• Social environmental factors include demographics and

cultural aspects. • These factors affect customer needs and the size of

potential markets. • Some social factors include:

• population growth rates• population shifts• age structure (youths, young adults, retirees, etc.)• the changing in family structure


| COURSE OUTLINE

Economic environment…• Economic trends can affect the marketing environment in

several ways.• Fluctuations in real income determine how much

consumers will have to spend on discretionary goods and services.

• Also take into account the income distribution and the average income of your target market.


| COURSE OUTLINE

Other economic factors…• Other economic factors include income, cost of living,

interest rates, and savings and borrowing patterns.• These factors can have a substantial impact on the

marketplace.


| COURSE OUTLINE

Political and legal environment…• Developments in the political and legal environment can

have serious consequences on your marketing efforts.• Be aware of:

• Legislation regulating business• The affects of government agencies such as the FDA, FCC, or

EPA on your company.• Growth of public interest groups that positively or negatively affect

your business.


| COURSE OUTLINE

Technological environment…• Technological factors can lower barriers to entry and

influence outsourcing decisions.• Some examples of technological factors include R&D

activity, automation and rate of technological change.• Another factor that may affect the technological

environment is if a company concentrates only on minor improvements or major innovations.


| COURSE OUTLINE

Environmental issues…• In our ever changing world, marketers should pay close

attention to certain environmental factors that could create tremendous impacts on the marketplace.

• Impending shortages on raw materials, increased cost of energy, increased levels of pollution, and government regulations and intervention all play a role in the environmental marketplace.


| COURSE OUTLINE

SEPTE analysis…• Now that you have walked through the steps of the

SEPTE analysis, apply it to your own marketplace.• The following worksheet will help you through the

process.• SEPTE analysis worksheet


| COURSE OUTLINE

4Selecting Your Target Markets


| COURSE OUTLINE

Consumer vs. Business…• The first step in selecting your target market is to

determine whether your customers are consumers or businesses and industries.

• Keep in mind that you can have more than one target market. However, if you find the description of your market too broad or general, then ask yourself:

• Is there really more than one target market here?


| COURSE OUTLINE

Geographic location…• Next consider the geographic level you will target.• Will your customers be mostly at the local, state, national

or international level?• You also need to decide what the geographic makeup of

your target market will be.• You can classify your target market as either rural,

suburban, urban, or a mix of any of these.


| COURSE OUTLINE

Demographic variables…• What characteristics will your target market share that will

differentiate them from others?• These variables should be measurable and can include

any of the following:- Age - Education- Gender - Occupation- Race - Family Size- Ethnicity - Marital Status- Income - Social Class


| COURSE OUTLINE

Demographic resources…• Many resources are available to help you define the

demographics of your target market.• U.S. Census Bureau

– Consumer Spending Surveys

– Business Expense Surveys

– American Factfinder

– State and County Quick Facts

– EasiDemographics


| COURSE OUTLINE

Psychographics of your market…• Psychographics help define characteristics of a group

based on their lifestyle, personality, and social class.• One of the most popular surveys of psychographics is

known as the VALS.• Value, Attitude, Lifestyle Surveys


| COURSE OUTLINE

VALS…• VALS place consumers into certain segments based on

their responses to a particular survey.• There are eight segments that they may be placed into.• These segments are then defined by certain

characteristics and traits that they share.• For more information go to:

• http://www.sric-bi.com/VALS/


| COURSE OUTLINE

Zip code psychographics…• People with similar lifestyles tend to live in the vicinity of

one another.• Zip code psychographics can help you define

characteristics of a region by just knowing its zip code• For more information go to:

• http://cluster2.claritas.com/YAWYL/Default.wjsp?System=WL


| COURSE OUTLINE

Selecting your target market…• To recap, when selecting your target market it is easiest

to start broad and then move to more narrow to define your market.• Are you targeting consumers or a business/industry?• What is the geographic makeup of your target market?• What are the demographics of your target market?• What are the psychographics of your target market?


| COURSE OUTLINE

5Market Positioning


| COURSE OUTLINE

The concept of positioning…• One of the best-known names in American advertising

circles is David Ogilvy.• After spending several billion dollars on advertising,

Ogilvy listed 32 things his ad agency had learned.• Of the thirty-two, he said that the single most important

decision involved positioning the product.• He claimed that marketing results depended less on how

advertising was written than how the product or service was positioned.


| COURSE OUTLINE

The origins of positioning…

• In their 1981 book, Positioning: The Battle for your Mind, Al Ries and Jack Trout describe how positioning is used as a communication tool to reach target customers in a crowded marketplace.

• Not long thereafter, Madison Avenue advertising executives began to develop positioning slogans for their clients and positioning became a key aspect of marketing communications.

• While positioning begins with a product, the concept really is about positioning that product in the mind of the customer. In other words, marketing is a battle of perception, not products.


| COURSE OUTLINE

What is positioning?• Ries and Trout explain that the concept is really about

positioning a product in the mind of the customer. Strategy is therefore planned in the mind, not the marketplace.

• This approach is needed because consumers are bombarded with a continuous stream of high-volume advertising.

• The consumer's mind reacts to this high volume of advertising by accepting only what is consistent with prior knowledge or experience.


| COURSE OUTLINE

How positioning works…• It is quite difficult to change a consumer's impression

once it is formed.• Consumers cope with information overload by

oversimplifying and are likely to shut out anything inconsistent with their knowledge and experience.

• In an over-communicated environment, the advertiser should present a simplified message and make that message consistent with what the consumer already believes by focusing on the perceptions of the consumer rather than on the reality of the product.


| COURSE OUTLINE

The importance of being first…• The easiest way of getting into someone's mind is to be

first.• It is very easy to remember who is first, and much more

difficult to remember who is second. Even if the second entrant offers a better product, the first mover has a large advantage that can make up for other shortcomings.

• However, all is not lost for products that are not the first. By being the first to claim a unique position in the mind of the consumer, a firm effectively can cut through the noise level of other products.


| COURSE OUTLINE

A few positioning examples…• Miller Lite was not the first light beer, but it was the first to

be positioned as a light beer, complete with a name to support that position.

• Similarly, Lowenbrau was the most popular German beer sold in America, but Beck's Beer successfully carved a unique position using the advertising: "You've tasted the German beer that's the most popular in America. Now taste the German beer that's the most popular in Germany."


| COURSE OUTLINE

Finding your unoccupied position…• If a product is not going to be first, it then must find an

unoccupied position in which it can be first.• At a time when larger cars were popular, Volkswagen

introduced the Beetle with the slogan "Think small.”• Volkswagen was not the first small car, but they were the

first to claim that position in the mind of the consumer.


| COURSE OUTLINE

Other positioning examples…• Other positions that firms successfully have claimed

include:

– age (Geritol)

– high price (Mobil 1 synthetic engine lubricant)

– gender (Virginia Slims)

– time of day (Nyquil night-time cold remedy)

– place of distribution (L'eggs in supermarkets)

– quantity (Schaefer - "the one beer to have when you're having more than one.")


| COURSE OUTLINE

Repositioning the competition…• Sometimes there are no unique positions to carve out. In

such cases, Ries and Trout suggest repositioning a competitor by convincing consumers to view the competitor in a different way.

• Tylenol successfully repositioned aspirin by running advertisements explaining the negative side effects of aspirin.

• Repositioning a competitor is different from comparative advertising. Comparative advertising seeks to convince the consumer that one brand is simply better than another. Consumers are not likely to be receptive to such a tactic.


| COURSE OUTLINE

Repositioning Stoli…• Consumers tend to perceive the origin of a product by its

name rather than reading the label to find out where it really is made.

• Such was the case with vodka when most vodka brands sold in the U.S. were made in the U.S. but had Russian names.

• Stolichnaya Russian vodka successfully repositioned its Russian-sounding competitors by exposing the fact that they all actually were made in the U.S., and that Stolichnaya was made in Leningrad, Russia.


| COURSE OUTLINE

Repositioning Pringles…

• When Pringle's new-fangled potato chips were introduced, they quickly gained market share.

• However, Wise potato chips successfully repositioned Pringle's in the mind of consumers by listing some of Pringle's non-natural ingredients that sounded like harsh chemicals, even though they were not.

• Wise potato chips of course, contained only "Potatoes. Vegetable oil. Salt.“

• As a result of this advertising, Pringle's quickly lost market share, with consumers complaining that Pringle's tasted like cardboard, most likely as a consequence of their thinking about all those unnatural ingredients.


| COURSE OUTLINE

Avis tries harder…• Consumers rank brands in their minds. If a brand is not

number one, then to be successful it somehow must relate itself to the number one brand.

• A campaign that pretends that the market leader does not exist is likely to fail. Avis tried unsuccessfully for years to win customers, pretending that the number one Hertz did not exist. Finally, it began using the line, "Avis is only No. 2 in rent-a-cars, so why go with us? We try harder."

• After the campaign, Avis quickly became profitable. Whether Avis actually tried harder was not relevant to their success. Rather, consumers finally were able to relate Avis to Hertz, which was number one in their minds.


| COURSE OUTLINE

Applying positioning…• Sun Tzu stated, "battles are won or lost before they are

ever fought."• The concept of positioning applies to products in the

broadest sense.• Services, your business itself, tourist destinations,

countries, and even careers can benefit from a well-developed positioning strategy that focuses on a niche that is unoccupied in the mind of the consumer or decision-maker.


| COURSE OUTLINE

To position your product or service…• Ask yourself, “How can I be the first to claim a unique

position in the mind of my customer.”• What exactly is my positioning message?• Remember, your consumer's mind reacts by accepting

only what is consistent with their prior knowledge or experience.

• Don’t try to change their mind, instead find a position that they already believe to be true or have trouble being in opposition to such as the “Clean Air Act.”


| COURSE OUTLINE

Finding your niche…• Remember, you must own your niche and own it outright.

No one else can occupy your space.• If you can’t own it, especially from a marketing

expenditure outlay, then decrease the size of niche until you can.

• If somebody else occupies your chosen space try to reposition them.


| COURSE OUTLINE

Finally, let’s consider your message…

• Your positioning message is what you will consistently reinforce to your selected niche.

• The message should help your customer identify, understand, and remember your position.

• To be effective, your message needs to be short—usually under five words—three or less is better.

• You should also try to let go of the intangibles such as your product features and price points and speak to your customer’s emotions. For example: Just do it—Nike.


| COURSE OUTLINE

To craft your message…• Begin by listing why your customers choose to do

business with you rather than your competitors.• Try to list about three to five reasons listed in the order of

importance.• Now, narrow down the key difference between your

business and your competitors in a single word.


| COURSE OUTLINE

Be very careful…• When you listed why your customers choose to do

business with you, it is probably true that you included words like: quality, customer service, expertise, selection, or location.

• Repeat this to yourself: These words represent boring, rational argument. In fact, they are probably the exact words that your competitor would list as well.


| COURSE OUTLINE

Avoiding rational logic…• When you appeal to rational thought you, in effect, create

an argument in the customer’s mind.• To solve this issue, try moving your message from the

customer’s head to their heart.• To do this you need to appeal to their emotions.


| COURSE OUTLINE

An example of selling emotions…• A grass seed company tried an experiment.• They took their seed and put it into two separate

packages:• One simply said Grass Seed and the price of $.99.• The second was named Lawn Seed and showed a beautiful lawn

flowing down toward a river. The price was $3.99.

• Remember, the seed inside the packages was identical. But nonetheless, the Lawn Seed outsold the grass seed by a factor of 4:1.

• People don’t want grass seed but rather the hope, feeling, and aspiration of having the beauty of that pictured lawn—and that’s really what they are paying for.


| COURSE OUTLINE

Consider your message again…• Go back and review your positioning message and ask

yourself, “Does it create boring, rational argument or does it sell emotional hope and aspiration?”

• Start by re-writing your message in a sentence and then whittle your message down to three words or less.

• Remember Nike didn’t say, “We have the highest quality shoes made through state-of-the-art processes of the best procured materials meaning they are long-lasting, durable, and offered at an excellent price point.”

• No, be very clear, they said: “Just do it.”


| COURSE OUTLINE

6Designing Products & Services


| COURSE OUTLINE

What is it that you sell?• One of the first questions to ask yourself is what does

your product do?• Other questions that you should address are:

• What need is addressed by the product?• What are its features and benefits?• Who supplies the products or materials?

• Whether you make or resell a product, these questions are important to answer.


| COURSE OUTLINE

Manufacturing a product…• If you manufacture a product, the following questions

need to be addressed:• How is it produced?• What materials and labor are required?• How will its quality be measured and controlled?• What is its technological lifespan?• What research and development has been conducted and what still

needs to be done?


| COURSE OUTLINE

Selling a service…• Delivering a service can be quite different then

manufacturing a product.• Some questions to address may include:

• What services do you offer?• How do they work?• What materials or equipment is needed?• What are your labor needs for these services?• What are the steps in your service process?• What benefit(s) do you provide customers?


| COURSE OUTLINE

Intellectual property…• Intellectual property is any product of the human intellect

has some value in the marketplace. • Intellectual property can include business strategies,

images, ideas and concepts.• In some cases it can be worth more to a business than

tangible assets.• For more information on intellectual property visit the

World Intellectual Property Organization.


| COURSE OUTLINE

Patents, trademarks & copyrights…• An important issue that comes up when discussing

intellectual property is how to protect it. • Protection can be obtained through a trademark, patent or

copyright.• For information on patents, trademarks and copyrights go

to… • United States Patent and Trademark Organization• United States Copyright Office


| COURSE OUTLINE

Packaging your product…• After you have addressed questions about your product,

you should then consider how you will package it?• The primary function of packaging use to be to hold and

protect the product.• Today, however, packaging is becoming an increasingly

important marketing tool.


| COURSE OUTLINE

Designing the packaging…• Many decisions are needed about the packaging – size,

shape, color, material, and label.• Be sure that the packaging is consistent with the product

you are offering.• Run engineering, visual and consumer tests when

developing the packaging.• Also reevaluate the packaging frequently after it has been

introduced into the market.


| COURSE OUTLINE

UPC barcodes…• Once a company has designed the packaging for a

product, many want to include a UPC barcode on their product.

• You can obtain a UPC barcode through the Uniform Code Council, Inc.


| COURSE OUTLINE

Product liability insurance…• Americans initiate more product liability lawsuits than do

customers in any other country in the world.• There has been a 983 percent increase in product liability

cases heard by federal courts since 1974.• A few famous cases you might recognize…

• Firestone Tire/Ford Explorer (tire blowouts)• Mrs. Liebeck vs. McDonald’s (hot coffee)


| COURSE OUTLINE

Product liability insurance…• Product liability may occur when a customer suffers harm

from using the product.• To incur liability you don’t necessarily have to be the

manufacturer.• Everyone down the supply chain (including the wholesaler

and retailer) could be affected.• A competent professional can help you determine what

level of insurance your business will need.


| COURSE OUTLINE

Regulatory issues…• Depending on what type of product you will offer plays an

important role in regulatory issues that will apply.• To find out what regulatory issues apply to your product

visit the following agencies:• Federal Trade Commission

– Food and Drug Administration

– Consumer Product Safety Commission


| COURSE OUTLINE

Product Mix…• While some companies only offer one product or service,

most companies try to diversify themselves by offering a product mix.

• A product mix is the set of all product lines and items that a particular seller offers to buyers.

• Use the worksheet below to help you organize your product mix.• Product Mix Worksheet


| COURSE OUTLINE

Product life cycle…• A new product will go through a four stage process

throughout its lifetime.• The Product Life Cycle Diagram


| COURSE OUTLINE

Stages of the product life cycle…• In the introduction stage the firm is seeking to build

awareness and develop the market.• During the growth stage the company is seeking to

increase their market share by building preference over their competitors.

• In the maturity stage growth slows as similar products appear on the market.

• Sales fall rapidly in the decline stage.


| COURSE OUTLINE

7Pricing Products & Services


| COURSE OUTLINE

Pricing decisions…• There are a number of internal and external factors that

will come in to play when setting prices.• Some of the internal factors may include pricing

objectives, strategy and costs.• External factors may include nature of the market and

demand, competition and the economy.


| COURSE OUTLINE

Pricing objectives…• Pricing objectives help answer the question: What are you

trying to achieve with your pricing strategy?• Survival• Profit• Return on Investment• Market Share• Cash Flow• Status Quo• Product Quality


| COURSE OUTLINE

Pricing strategy…• Once you have determined your objectives you should

then focus on the methods you will use to determine your prices.

• Keep in mind laws that regulate pricing and pricing strategies such as the Clayton Act.

• For more information on the Clayton Act go to:• http://www4.law.cornell.edu/uscode/15/12.html


| COURSE OUTLINE

Types of pricing strategies…

• There are several basic pricing strategies.• Skim Pricing - Set your price high with the goal of capturing

short-term profits.• Penetration Pricing - Set your price low to discourage

competition and appeal to a larger market segment.• Fixed Pricing - Price is set by manufacturer or middleman and

not subject to negotiation.• Variable Pricing - Price is negotiated between buyer and seller.• Price Lining - Establishes only a few prices for all the items

within a given product line.• Keystone Pricing - percentage markup applied to the product’s

cost.


| COURSE OUTLINE

More pricing strategies…• Other pricing strategies include:

• Customary Pricing - set price at the considered standard level for the product.

• Psychological Pricing - strategies that try to make the product’s price more desirable.

• Prestige Pricing - encouraging consumers to equate pricing with quality and status.

• Geographic Pricing - charging different prices for different regions of geography.

• Pricing Leader - determining if you will be a price leader or follower.


| COURSE OUTLINE

The nature of the market…• Be aware of the floor and ceiling prices in your market.• The costs of the product will set the floor for the

marketer.• The ceiling is set by the market and its demand.• Set your price between these two points but keep in

mind consumers will compare the price of the product against the value of owning it.

• Avoid establishing where the costs will outweigh the benefits, and consumers will no longer buy your product.


| COURSE OUTLINE

Competition and their prices…• Consumers will compare the price and value of a product

to that of comparable items.• Learn the prices and quality of your biggest competitors.• Use this information in helping you to establish a pricing

point of your own.


| COURSE OUTLINE

Economic factors…• Booms, recessions, inflation and interest rates all effect

the pricing of a product.• These economic turns will affect the costs to produce and

consumers’ sensitivity to price and benefits of the product.• Be aware of the current economic conditions and the

economic forecast for the future when establishing a price.


| COURSE OUTLINE

Determining gross margins…

• Once you have set the cost you can then determine the gross margin for the product.

Compare your product’s gross margin with industry standards from sources such as RMA.

Product Price (to consumer)minus Product Cost (to you)

equals Gross Margin of Product


| COURSE OUTLINE

8Placing Products & Services


| COURSE OUTLINE

Placing decisions…• Placing your product is the third of the four P’s.• It encompasses channels of distribution that serve as a

transporter for getting your product to your customers.• Decisions you will need to make in placing your product

include market coverage, channel member selection, logistics, and location.


| COURSE OUTLINE

Market coverage…• You must first determine which markets you are going to

reach and with what objectives.• Be sure to include items such as the desired level of

service and functions to be performed by channel members.

• Constraints to developing your objectives may come from several sources.• Customers, products, intermediaries, company policies,

competitors, and the environment.


| COURSE OUTLINE

Channel member selection…

• Marketing channels direct the flow of products from producers to consumers.

• They may go directly from producer to buyer.

Producer Consumer

WholesalerProducer ConsumerRetailer

Or the may have several steps between production to consumers.


| COURSE OUTLINE

Part of the process…• What part of the distribution process does your business

handle, if any?• Warehousing• Order processing• Inventory management• Packaging• Materials handling• Receiving• Transportation and shipping


| COURSE OUTLINE

Retailers in the distribution channel…• As you move down the marketing channel from

manufacturing, to wholesaling and so on, it may become unclear what your distribution channel will look like.

• Often, retailers believe that they do not have a distribution channel.

• The fact is a retailer’s location is their distribution channel.


| COURSE OUTLINE

Number of channel members…• You must decide how many intermediaries will be in the

marketing channel.• Several middlemen will be needed for intensive

distribution - stocking your product in as many outlets as possible.

• Limited dealers will be granted the rights to distribute your product with exclusive distribution.

• Selective distribution stands in the middle. It requires more than one intermediary, but fewer than the intensive distribution.


| COURSE OUTLINE

Supply chain management…• An important function of the marketing channel is the joint

effort of all members to create a supply chain.• Supply chain management refers to the long-term

partnerships among channel members to reduce inefficiencies, costs, and redundancies in the market channel.

• If managed correctly, a competitive advantage can be established.


| COURSE OUTLINE

Logistics of your channel…• When planning your distribution channel you should be

able to answer the following questions.• What will the ordering process look like?• Where will inventory be located?• How much inventory should be kept on hand?• How should goods be shipped?


| COURSE OUTLINE

Shipping options…• There are several ways to handle shipping.• FOB Factory Pricing: The costs of transporting the

product from seller to buyer are borne by the buyer.• Freight Absorption Pricing: Paying some of the

transportation costs in order to bring the price in line with competitors.

• Uniform Delivered Pricing: A standard price charged regardless of location.

• Zone Pricing: Charging different prices for different regions of geography.


| COURSE OUTLINE

Location of your business…• An important decision that you need to make is where will

your business be located.• Make sure the location you select fulfills the needs of your

business; location needs, space needs, accessibility needs, etc.

• Also check to see what traffic counts the facility experiences. (check with your state Department of Transportation)

• Choosing a Successful Location for Your Business


| COURSE OUTLINE

The cost of your location…• What will it cost to lease or buy the needed facility?• Make sure that you can afford the location that you

choose.• Also find out the term and duration of the lease of the

desired location.• For more information, go to: Finding and Renting Space

for Your Business


| COURSE OUTLINE

Channel regulations…• There are a multitude of federal, state, and local laws

governing channel management.• Through such laws as the Sherman Antitrust Act and the

Federal Trade Commission Act, the government is trying to make sure that free trade and competition are protected.


| COURSE OUTLINE

9Promoting Products & Services


| COURSE OUTLINE

The promotional mix…• The promotional mix consists of four main tools.

• Advertising,• Personal selling,• Sales promotion and• Publicity

• By identifying these tools you will be able to lay out the basis of a media plan and promotional budget for your company.


| COURSE OUTLINE

Advertising and its various forms…• Advertising deals with communicating with your

customers in a very public way.• By advertising you are able to repeat your message to

customers numerous times in various formats.• However, be aware that while you are able to get your

message to customers, they do not have to pay attention to it.


| COURSE OUTLINE

The various forms of advertising…(Click on a link below)

Direct mail Trade shows Yellow pages Newspaper Magazines Radio Television Outdoor advertising Email advertising Telemarketing


| COURSE OUTLINE

Direct mail…• Direct mail allows for the most careful aim of your target.• Direct mail is one of the least expensive methods of

marketing on a per-sale basis.• But be aware that an expected response rate for a

general direct mailing can be as low as 2%.• For help on direct mailings go to:

• http://www.the-dma.org


| COURSE OUTLINE

Trade shows…• Trade shows provide an opportunity to make contacts with

purchase-minded people.• Identify objectives and locations for shows that you

believe will generate the most leads for your business.• For help identifying trade shows go to:

• http://www.tsnn.com


| COURSE OUTLINE

Yellow pages…• In the yellow pages you are on level playing ground with

your competitors because your ad can appear as big as theirs.

• If you cannot stand out from your competitors never tell your customers to “Find us in the yellow pages.”

• Instead, direct them to your listing in the white pages where every listing in the same size.

• To advertise in the yellow pages call:• 1-800-249-4449


| COURSE OUTLINE

Newspaper…• Newspapers are great for broadcasting news.• Ad types, dates, frequency and sizes are all important

issues you need to address.• However, try not to let the newspaper design or write the

copy for your ad. If they do, your ad may appear like all of the other ads in the paper, including your competitors.

• For a listing of newspapers go to:• http://newsdirectory.com/

– http://www.mediapost.com


| COURSE OUTLINE

Magazines…• An ad placed in a properly produced magazine can give

high credibility to a small business.• With magazines you can reach a more specific target than

with newspapers.• For a listing of magazines go to:

• http://www.newsdirectory.com• http://www.mediapost.com


| COURSE OUTLINE

Radio…• Radio advertisements can bring you into more intimate

contact with prospects than a newspaper can.• The response rate is usually equivalent to that of

television, but with lower costs.• Estimated listener base, demographics of that base,

time of airing, and length of spots are all issues to keep in mind when developing a radio ad.

• For a listing of radio stations go to:• http://www.mediapost.com/


| COURSE OUTLINE

Television and cable…• While television can be highly effective, it can also be very

costly.• To be effective, television ads must placed in front of

audiences on a regular basis.• With cable you can have the advantage of being able to

pick which subscriber areas you want to target and picking particular stations you want to advertise on. (CNN, ESPN, etc.)

• For a listing go to http://www.mediapost.com.


| COURSE OUTLINE

Outdoor advertising…• Outdoor advertising is effective at reminding people.• It offers high repeat exposure and flexibility.• However, with outdoor advertising there is no audience

selection.• For a listing go to:

http://advertising.utexas.edu/world/index.asp?pageid=Outdoor


| COURSE OUTLINE

Email Advertising…• Emails are similar to direct mailings in that they allow for

the most careful aim of your target.• Be sure to be aware of the laws that govern email

advertising.• For a summary of these laws go to:

• http://www.techlawjournal.com/cong106/spam/Default.htm


| COURSE OUTLINE

Telemarketing…• Telemarketing can be a convenient way to educate

customers about your products and services while offering a great deal of flexibility.

• However, be aware that many consumers today see telemarketing as a nuisance.

• They may also be leery of telemarketing fearing that it is a possible scam.


| COURSE OUTLINE

Telemarketing fraud…• The Federal Trade Commission (FTC) estimates that

fraudulent telemarketers swindle American consumers out of more than one billion dollars each year.

• Make sure that you are aware of the laws that govern telemarketing.

• For more information go to: http://consumer.net/telemarketing/tcpainfo.asp


| COURSE OUTLINE

The pros & cons of personal selling…• Personal selling may be the most effective tool at certain

times due to…• Personal selling involves face-to-face communication. • Lasting relationships can be established with personal

selling.• When face-to-face with a salesperson, the customer is more

likely to respond.

• While personal selling is an effective tool, its cost can be overwhelming to a company.


| COURSE OUTLINE

Selecting a sales force…• If you decide to take part in personal selling, a sales force

will be needed.• Be sure to ask yourself how you will handle the following:

• Recruitment and selection of sales personnel• Training sales personnel• Compensation and motivation• Controlling and evaluating sales force performance


| COURSE OUTLINE

Sales promotion…• Sales promotions usually have three distinctive

characteristics that help to set them apart.

1. They provide information and help gain attention.

2. They provide an incentive to the customer.

3. They encourage the consumer to buy quickly.


| COURSE OUTLINE

Consumer sales promotions…• Sales promotions for consumers can come in various

forms.• These forms include coupons, demonstrations, frequent-

user incentives, point-of-purchase displays, free samples, money refunds or rebates and contests or sweepstakes.


| COURSE OUTLINE

Business sales promotion…• There are also numerous ways to offer sales promotions

to businesses or industries.• When targeting these types of customers try offering

quantity discounts, free merchandise, buy-back allowances, dealer listings or cooperative advertising.


| COURSE OUTLINE

The appeal of publicity…• A well planned publicity campaign along with other

promotional tools can be highly effective and help you save money at the same time.

• Part of the appeal of publicity is that it can offer high credibility, it can catch people off guard and help dramatize a product or company.


| COURSE OUTLINE

Types of publicity tactics…• What types of publicity tactics will you employ?• A press release is one option. Some reasons to issue a

press release include:• Support of a social cause• Winning of quality awards• New product launches• Speeches of top management

• Other types of publicity include public speaking engagements and public events.


| COURSE OUTLINE

What comes next?• After you decide on which tools from the promotional mix

you want to use, you then need to develop a promotional budget.

• This is usually a major obstacle for companies because while they may know what tools they want to use, they may not know how to allocate money to properly use them.


| COURSE OUTLINE

Setting the promotional budget…• Many companies set their budget as a percentage of

current or forecasted sales.• While other companies mirror their budget to that of their

competitors. • Still some companies will approximate their budget by

how much the objectives they wish to meet will cost in advertising dollars.


| COURSE OUTLINE

A percentage of sales…

• For retail or location based service companies, the following formula will usually work in helping to estimate a promotional budget.

Projected Gross Sales

times 12% (.12)

minus Cost of Rentequals Advertising Budget


| COURSE OUTLINE

10Creating A Marketing Plan


| COURSE OUTLINE

Why have a formal plan?• Many entrepreneurs insist that hustle is all that is required

in the marketing of their business.• But energy alone is not enough. Energy must be directed

by intelligence.• Intelligent marketing is marketing that is first and foremost

focused on a core idea.• All your marketing must be an extension of this idea—it

isn’t enough to have a better idea—you need to have a focused strategy.


| COURSE OUTLINE

The plan’s structure…• A complete marketing plan includes the following three

sections:• The marketing plan identifies the market and your strategy.• The creative plan is similar to the marketing plan but is limited to

the content of your marketing materials.• The media plan which sets forth and details your selected media

weapons and media calendar.


| COURSE OUTLINE

Let’s start with the marketing plan…• The marketing plan identifies the market and your

overarching positioning strategy.• The length of your final marketing plan is up to you and

depends on your organizational culture and the audience that will read and use the plan.

• At first, though, try to state it in just one paragraph.• According to Jay Conrad Levinson, author of Guerilla

Marketing, a simple plan can be created in just seven sentences.


| COURSE OUTLINE

A simple marketing plan…• Sentence one explains the purpose of the strategy.• Sentence two explains how you’ll achieve this purpose. It

describes your competitive advantage and benefits.• Sentence three describes your target market—or markets.• Sentence four, the longest, outlines the marketing

weapons you’ll employ.• Sentence five describes your niche—your positioning.• Sentence six reveals the identity of your business.• Sentence seven states your budget, which should be

expressed as a percentage of projected gross revenues.


| COURSE OUTLINE

The creative plan…• Almost any marketing person worth his or her salt will tell

you that marketing is not creative unless it sells.• Advertising legend Leo Burnett used to remind his staff

that a person can be creative by coming downstairs with his or her socks in their mouth—but what’s the point?

• There must be a reason for your creativity, and your creativity should never detract from your message.


| COURSE OUTLINE

Developing the creative plan…• A creative strategy is similar to a marketing plan but is

limited to the marketing materials only—and directed solely at their content.

• A creative plan can be written in as little as three sentences which detail:• The purpose of the creative message• How the purpose will be achieved• The mood, tone, or personality of the advertising


| COURSE OUTLINE

Your marketing calendar…• Once you’ve selected the marketing media and weapons

that can propel you to your goal, be sure you use them in an orderly, logical manner.

• This can best be accomplished by the third and final section of your marketing plan: the marketing calendar.

• A marketing calendar indicates whether or not you can use these methods properly because it forces you to come to terms with the costs and realities of the media you select.


| COURSE OUTLINE

A more complex plan…• In some cases you may need a more in-depth marketing

plan.• This plan can be structured in the following format.

• Executive Summary• Challenges• Situation Analysis• Market Segmentation• Selected Marketing Strategy• Short & Long-Term Projections• Conclusion• Appendix


| COURSE OUTLINE

Executive summary & challenge…• The executive summary is simply a summary of the

marketing plan.• It should highlight the main points of your plan.• The challenge section of the marketing plan should

include a brief description of the product that will be marketed.

• The challenge should also include associated goals such as sales figures and strategic goals.


| COURSE OUTLINE

Situation analysis…• The situation analysis should include the following:

• Company Analysis - Goals, culture, strengths and weaknesses.• Customer Analysis - Number and type of customer, value drivers

and decision process.• Competitor Analysis – Market position, strengths, weaknesses and

market share of competitors.


| COURSE OUTLINE

Situation analysis…• The situation analysis should include a section on

collaborators such as subsidiaries, distributors, etc.• A SEPTE may also be included in the situation analysis.• A SEPTE analysis will help in measuring the:

• Social and cultural environment• Economic environment • Political and legal environment• Technological environment• Environmental issues


| COURSE OUTLINE

SWOT analysis…• A SWOT analysis is the last section of the situation

analysis.• This type of analysis helps to determine internal and

external environmental factors.• The internal factors are the strengths and weaknesses of

the business.• The external factors are the opportunities and threats in

the market.• SWOT analysis worksheet


| COURSE OUTLINE

Market segmentation…• The purpose of the market segmentation section is to help

describe the segment(s) of the market you are targeting.• Included in this segmentation are:

• A description of the target market• Percent of sales for this group• What they want• How they use the product• Support requirements• How to reach them• Price sensitivity

• Include a segment analysis for each market segment you are targeting.


| COURSE OUTLINE

Selected marketing strategy…• This section of the marketing plan should include a

discussion of the strategy you have selected.• It should include decisions you have made regarding each

of the 4 P’s (product, price, place, and promotion).• Be sure to include things such as brand name, scope of

product line, list price, payment terms, distribution channels and advertising issues in this section.


| COURSE OUTLINE

Finishing up your plan…• The short and long-term projections should include

immediate and future desired results and how these results will be achieved.

• This section may also include a forecast of revenues and expenses related to the plan.

• A conclusion should be placed at the end of the plan to summarize the plan’s contents.

• Any other information that may pertain to the marketing plan should be paced in the appendix.


| COURSE OUTLINE

Just how important is marketing?• The Father of Modern Management, Peter Drucker

emphasized the importance of marketing when he said:• “There are only two functions of a business: marketing and

innovation.”

• Remember, there is no business without first a customer.

steve kaplan: marketing 101

Documents

marketing marketing

ps of marketing

marketing plan

p of marketing

course outline course

marketing mix worksheet

ideas marketing deals

ultimate goal of marketing