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Market Your Business Develop the Marketing Plan

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Presentation on theme: "Market Your Business Develop the Marketing Plan"— Presentation transcript:

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. Chapter 5

3 Six months after placing the first manufacturing order in China, the Schmelzers sold their business for $10 million. Chapter 5

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. Chapter 5

5 Terms marketing marketing concept marketing mix marketing strategy
marketing plan Chapter 5

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 Chapter 5

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 Chapter 5

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 Chapter 5

9 marketing mix reaching the target market through a blend of: product
price distribution promotion Chapter 5

10 Why is marketing important to a business?
Chapter 5

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 Chapter 5

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 Chapter 5

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 Chapter 5

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. Chapter 5

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. Chapter 5

16 Why is goal setting important when developing a marketing strategy?
Chapter 5

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 Chapter 5

18 The marketing plan should include the following information:
Product or Service Target Market Competition Marketing Budget Business Location Pricing Strategy Promotional Strategy Chapter 5

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. Chapter 5

20 Why is it important to put your marketing plan in writing?
Chapter 5

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. Chapter 5

22 Terms product mix features branding positioning Chapter 5

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. Chapter 5

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. Chapter 5

25 Often a small percentage of the product selection makes up the majority of sales revenue.
Chapter 5

26 How does the marketing concept affect decisions made about the product mix?
Chapter 5

27 Development of Features, Branding, and Positioning
There is more to a product than consumers may realize. features branding packaging labeling positioning Chapter 5

28 Selecting Product Features
product characteristics that will satisfy customer needs The target market should be considered when selecting product features. Chapter 5

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 Chapter 5

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. Chapter 5

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 Chapter 5

32 Why are product features, branding, and positioning important?
Chapter 5

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. Chapter 5

34 Terms return on investment market share demand-based pricing
cost-based pricing competition-based pricing psychological pricing discount pricing Chapter 5

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 Chapter 5

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 Chapter 5

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 Chapter 5

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. Chapter 5

39 Market Share = Amount of Sales ÷ Total Market Size Chapter 5

40 There are multiple ways to increase market share including:
lowering prices advertising and promotion networking with potential customers Chapter 5

41 Why is it important to determine pricing objectives before pricing goods and services?
Chapter 5

42 Determine a Price for a Product
There is usually more than one price that can be charged for a product. Chapter 5

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. Chapter 5

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 Chapter 5

45 Wholesale cost + Markup amount
Wholesale cost × Percentage markup Retail Price = Wholesale cost + Markup amount Chapter 5

46 markdown price determined by subtracting a percentage amount from the retail price Chapter 5

47 Retail Price - Markdown amount
Retail price × Percentage markdown Markdown Price = Retail Price - Markdown amount Chapter 5

48 Competition-Based Pricing
pricing that is determined by considering what competitors charge for the same good or service Chapter 5

49 List three methods for determining the price to charge for a product.
Chapter 5

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 Chapter 5

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 Chapter 5

52 Bundling bundled pricing
when all services are combined under one charge Chapter 5

53 Which method would be the best for a housepainter to use to price services? Why?
Chapter 5

54 Pricing Techniques Pricing can make or break a business.
Pricing techniques may change over time. Chapter 5

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 Chapter 5

56 Psychological Pricing
certain prices have an impact on how customers perceive a product used most commonly in retail Chapter 5

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 Chapter 5

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 Chapter 5

59 Discount Pricing discount pricing offers customers a reduced price
encourages purchases Chapter 5

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 Chapter 5

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 Chapter 5

62 Name two techniques used in psychological pricing and provide an example of each.
Chapter 5

Demonstrate knowledge and understanding of management and international business concepts. Communicate research in a clear and concise manner, both orally and in writing. Chapter 5

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. Chapter 5

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? Chapter 5

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