1. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. ChapterChapter5 Market Your Business 5.1 Develop the Marketing Plan 5.2 The Marketing Mix─Product 5.3 The Marketing Mix─Price

2. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 2 Lesson 5.1 Developing the Marketing Plan Goals Explain the importance of marketing a business. Discuss how to develop a marketing strategy for a business. Describe what information is included in a marketing plan.

3. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 3 Vocabulary marketing marketing concept marketing mix marketing strategy marketing plan

4. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 4 What is Marketing? marketing all of the processes used to determine and satisfy the needs of customers and the company planning pricing promoting distributing selling

5. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 5 Uses the needs of customers as the primary focus of a product or service during: planning production distribution promotion marketing concept

6. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 6 Identify what will satisfy the customers’ needs and wants Develop and market products or services that customers consider better than other choices Operate profitably A successful marketing concept will:

7. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 7 reaching the target market through a blend of: product price distribution promotion marketing mix

8. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 8 Why is marketing important to a business?

9. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 9 The Marketing Strategy marketing strategy a plan that identifies how business goals will be achieved through marketing efforts product introduction or innovation pricing distribution promotion sales or market share projected profitability

10. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 10 be achievable with your available resources be written following the SMART guidelines reflect short, medium and long-term goals marketing goals should:

11. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 11 Short-Term Goals Achievements for the next year are the focus of short-term goals. number of customers level of sales level of profits

12. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 12 Medium-Term Goals Achievements for the next two to five years are the focus of medium-term goals. Make sure your marketing strategy facilitates achievement of medium-term goals.

13. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 13 Long-Term Goals Achievements for a 5, 10, or 20 year time horizon are the focus of long-term goals. Long-term goals can help define current marketing plans.

14. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 14 Why is goal setting important when developing a marketing strategy?

15. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 15 Write Your Marketing Plan marketing plan defines your market identifies your customers and competitors outlines a strategy for attracting and keeping customers anticipates changes

16. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 16 1. Product or Service 2. Target Market 3. Competition 4. Marketing Budget 5. Business Location 6. Pricing Strategy 7. Promotional Strategy 8. Distribution Strategy The marketing plan should include the following information:

17. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 17 Actual results should be compared to performance standards quarterly. Marketing plans should include performance standards that are measurable.

18. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 18 Why is it important to put your marketing plan in writing?

19. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 19 Lesson 5.2 The Marketing Mix─Product Goals Explain how the marketing concept affects decisions regarding the product mix. Define and describe the importance of product management.

20. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 20 Vocabulary product mix features brand positioning

21. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 21 The Marketing Concept and the Product If you can convince your customers that your products satisfy their needs better than any competitor’s products, then your products become a marketing tool for your business.

22. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Consumer-Driven Market The wants and needs of customers are the most important consideration when developing any product or marketing effort. The U.S. has changed from a product- driven market to a consumer-driven market. Consumers are more educated. Competition includes the global market. Chapter 1 Slide 22

23. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 23 Product Mix product mix the different products and services a business sells Entrepreneurs may carry some products that are not profitable just to please customers. A small percentage of the product selection often makes up the majority of sales revenue.

24. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 24 How does the marketing concept affect decisions made about the product mix?

25. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 25 Product Management There is more to a product than consumers may realize. features branding packaging labeling positioning

26. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 26 Select Product Features features product characteristics that will satisfy customer needs The target market should be considered when selecting product features.

27. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 27 Consider Branding, Packaging, and Labeling brand the name, symbol, or design used to identify your product package the box, container, or wrapper in which the product is placed

28. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 28 where information about the product is given on the package The brand, package, and label that you choose for a product help differentiate it from others on the market. label

29. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 29 Position Your Products or Services Different products and services within the same category serve different customer needs. positioning creating an image for the product in the customer’s mind

30. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 30 Why is product management important?

31. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 31 Lesson 5.3 The Marketing Mix─Price Goals Identify pricing objectives for a business. Calculate the price for products using various methods. Discuss factors to consider when pricing services. List and describe various pricing strategies.

32. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 32 Vocabulary return on investment market share demand-based pricing cost-based pricing competition-based pricing psychological pricing discount pricing

33. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 33 Set Pricing Objectives price the amount a customer pays for a product or service needs to be low enough that customers buy from you needs to be high enough so revenues exceed expenses

34. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 34 maximize sales discourage competition establish an image increase profits attract customers Price objectives might include:

35. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 35 Return on Investment investment the costs of making and marketing a product return on investment (ROI) amount earned as a result of the investment usually expressed as a percentage

36. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 36 Market Share market share a business’s percentage of the total sales generated by all companies in the same market The total market for a product must be known in order for market share to be determined.

37. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 37 Amount of Sales ÷ Total Market Size Market Share =

38. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 38

39. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 39 lowering prices advertising and promotion networking with potential customers There are multiple ways to increase market share including:

40. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 40 Why is it important to determine pricing objectives before pricing goods and services?

41. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 41 Determine a Price for a Product There is usually more than one price that can be charged for a product.

42. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 42 Demand-Based Pricing demand-based pricing pricing that is determined by how much customers are willing to pay for a product or service Survey potential customers to determine what they would be willing to pay for a product. The highest price identified is the maximum price that can be charged.

43. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 43 Cost-Based Pricing cost-based pricing determined by using the wholesale cost of an item as the basis for the price charged markup price determined by adding a percentage amount to the wholesale cost of an item

44. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 44 Wholesale cost × Percentage markup Retail Price = Wholesale cost + Markup amount Markup amount =

45. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 45 determined by subtracting a percentage amount from the retail price markdown price

46. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 46 Retail price × Percentage markdown Markdown Price = Retail price - Markdown amount Markdown amount =

47. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 47 Competition-Based Pricing competition-based pricing pricing that is determined by considering what competitors charge for the same good or service

48. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 48 List three methods for determining the price to charge for a product.

49. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 49 Price a Service or an Idea To set a price for a service, consider the following: the cost of items used in providing the service the amount of time required to produce the service

50. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 50 Time-Based Pricing The amount of time it takes to complete a service will be the basis for determining the price of the service. Providers must decide whether the cost of materials will be: included in the price listed as a separate charge

51. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 51 Bundling bundled pricing when all services are combined under one charge

52. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Pricing an Idea You can sell your ideas by working as a consultant licensing selling your idea to a company for the development and launch of a new product licensing payments can occur through up-front payment royalties annual minimum Chapter 1 Slide 52

53. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 53 Which method would be the best for a housepainter to use to price services? Why?

54. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 54 Pricing Strategies Pricing can make or break a business. Pricing techniques may change over time.

55. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 55 Introductory Pricing price skimming used for products that are new and unique a high price is charged to cover product development costs penetration pricing a low introductory price is charged to build a strong customer base discourages competition

56. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 56 Psychological Pricing psychological pricing certain prices have an impact on how customers perceive a product used most commonly in retail

57. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 57 prestige pricing a high price to create a feeling of superiority odd/even pricing prices ending in odd numbers are perceived to be bargains prices ending in even numbers suggest higher quality Techniques used in psychological pricing include the following:

58. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 58 for a specific category of products offering different prices based on specific features and qualities promotional pricing temporarily offering lower prices to increase sales multiple-unit pricing pricing items in multiples consumers buy more units if they perceive a bargain price lining

59. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 59 Discount Pricing discount pricing offers customers a reduced price encourages purchases

60. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 60 cash discounts encourages early payment of invoices quantity discounts (volume discounts) offers lower prices based on the purchase of a large quantity Techniques used in discount pricing include the following:

61. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 61 price reductions granted by a manufacturer or wholesaler to buyers in the same trade seasonal discounts used to sell seasonal merchandise out of season trade discount

62. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 1 Slide 62 Name two strategies used in introductory pricing and provide an example of each.

63. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 63 PERFORMANCE INDICATORS Demonstrate knowledge and understanding of management and international business concepts Communicate research in a clear and concise manner, both orally and in writing

64. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 64 Demonstrate successful price selection methods Demonstrate effective persuasive and informative communication and presentation skills Demonstrate teamwork skills needed to function in a global marketing environment

65. Entrepreneurship: Ideas in Action 5e © 2011 Cengage Learning. All rights reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 5 Slide 65 THINK CRITICALLY 1.Why is the packaging so important for fresh- cut flowers? 2.Why is it important for the product to clear customs? 3.Why must Flower Power understand customs (cultural traditions) in other countries? 4.Why is it important to have a reasonably- priced package in this case?