1. Market Your Business 5 5.1 Develop the Marketing Plan
5.2 The Marketing Mix─Product
5.3 The Marketing Mix─Price

2. Ideas in Action Turning Creative Fun Into Dollars
The Schmelzer family turned a novel idea for decorating Crocs into a simple in-home business.
After growing their business through website based orders, the Schmelzers utilized manufacturing capacity in China to accommodate growth.
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3. Six months after placing the first manufacturing order in China, the Schmelzers sold their business for $10 million.
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4. 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.
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5. Terms marketing marketing concept marketing mix marketing strategy
marketing plan
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6. 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
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7. marketing concept
Uses the needs of customers as the primary focus of a product or service during the stages of:
planning
production
distribution
promotion
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8. A successful marketing concept will:
Identify what will satisfy the customers’ needs and wants
Develop and market products or services that customers consider better than other choices
Operate profitably
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9. marketing mix reaching the target market through a blend of: product
price
distribution
promotion
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10. Why is marketing important to a business?
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11. The Marketing Strategy
a plan that identifies how business goals will be achieved by outlining:
product introduction or innovation
pricing
distribution
promotion
projected profitability
sales or market share
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12. marketing goals should:
be achievable with your available resources
reflect short, medium and long-term goals
be written following the SMART guidelines from Chapter 1
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13. Short-Term Goals
Achievements for the next year are the focus of short-term goals.
number of customers
level of sales
level of profits
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14. 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.
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15. 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.
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16. Why is goal setting important when developing a marketing strategy?
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17. Write Your Marketing Plan
A marketing plan will define:
your market
your customers and competitors
a strategy for attracting and keeping customers
anticipated changes
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18. The marketing plan should include the following information:
Product or Service
Target Market
Competition
Marketing Budget
Business Location
Pricing Strategy
Promotional Strategy
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19. Actual results should be compared to performance standards quarterly.
Marketing plans should include performance standards that are quantifiable.
Actual results should be compared to performance standards quarterly.
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20. Why is it important to put your marketing plan in writing?
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21. 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 features, branding, and positioning.
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22. Terms
product mix
features
branding
positioning
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23. The Marketing Concept and the Product
The wants and needs of customers are the most important consideration when developing any product or marketing effort.
The U.S. market is consumer-driven.
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24. Product Mix product mix
the different products and services a business sells
Entrepreneurs may carry some products that are not profitable because the products provide a convenience for customers.
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25. Often a small percentage of the product selection makes up the majority of sales revenue.
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26. How does the marketing concept affect decisions made about the product mix?
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27. Development of Features, Branding, and Positioning
There is more to a product than consumers may realize.
features
branding
packaging
labeling
positioning
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28. Selecting Product Features
product characteristics that will satisfy customer needs
The target market should be considered when selecting product features.
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29. Branding, Packaging, and Labeling
the name, symbol, or design used to identify your product
package
the box, container, or wrapper in which the product is placed
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30. label
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.
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31. 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
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32. Why are product features, branding, and positioning important?
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33. 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 techniques.
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34. Terms return on investment market share demand-based pricing
cost-based pricing
competition-based pricing
psychological pricing
discount pricing
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35. 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
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36. Objectives might include:
Objectives for a pricing program should be established prior to selecting a pricing strategy.
Objectives might include:
maximize sales
discourage competition
establish an image
increase profits
attract customers
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37. Return on Investment investment return on investment (ROI)
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
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38. 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.
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39. Market Share =
Amount of Sales ÷ Total Market Size
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40. There are multiple ways to increase market share including:
lowering prices
advertising and promotion
networking with potential customers
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41. Why is it important to determine pricing objectives before pricing goods and services?
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42. Determine a Price for a Product
There is usually more than one price that can be charged for a product.
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43. Demand-Based Pricing demand-based pricing
pricing that is determined by how much customers are willing to pay for a product or service
Survey 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.
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44. Cost-Based Pricing cost-based pricing markup price
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
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45. Wholesale cost + Markup amount
Wholesale cost × Percentage markup
Retail Price =
Wholesale cost + Markup amount
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46. markdown price
determined by subtracting a percentage amount from the retail price
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47. Retail Price - Markdown amount
Retail price × Percentage markdown
Markdown Price =
Retail Price - Markdown amount
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48. Competition-Based Pricing
pricing that is determined by considering what competitors charge for the same good or service
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49. List three methods for determining the price to charge for a product.
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50. Price a Service 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
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51. 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
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52. Bundling bundled pricing
when all services are combined under one charge
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53. Which method would be the best for a housepainter to use to price services? Why?
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54. Pricing Techniques Pricing can make or break a business.
Pricing techniques may change over time.
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55. Introductory Pricing price skimming penetration pricing
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
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56. Psychological Pricing
certain prices have an impact on how customers perceive a product
used most commonly in retail
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57. Techniques used in psychological pricing include the following:
prestige pricing
a high price to create a feeling of superiority
odd/even pricing
prices ending in odd numbers are perceived to be bargains
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58. multiple-unit pricing
price lining
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
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59. Discount Pricing discount pricing offers customers a reduced price
encourages purchases
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60. Techniques used in discount pricing include the following:
cash discounts
encourages early payment of invoices
quantity discounts (volume discounts)
offers lower prices based on the purchase of a large quantity
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61. trade discount seasonal discounts
when a manufacturer offers a discount to wholesaler or buyer in the same trade
seasonal discounts
used to sell seasonal merchandise out of season
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62. Name two techniques used in psychological pricing and provide an example of each.
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63. PERFORMANCE INDICATORS EVALUATED
Demonstrate knowledge and understanding of management and international business concepts.
Communicate research in a clear and concise manner, both orally and in writing.
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64. Demonstrate successful price selection methods.
Demonstrate teamwork skills needed to function in a global marketing environment.
Demonstrate successful price selection methods.
Demonstrate effective persuasive and informative communication and presentation skills.
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65. THINK CRITICALLY
Why is the packaging so important for fresh-cut flowers?
Why is it important for the product to clear customs?
Why must Flower Power understand customs (cultural traditions) in other countries?
Why are the packaging costs important in this case?
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