Chapter 7 The Marketing Plan

Small Business Marketing
Business activities that direct the creation, development, and delivery of a bundle of satisfaction from the creator to the targeted user
Small Business Marketing Activities
1. Identification of the target market
2. Determining target market’s potential
3. Preparing, communicating, and delivering a bundle…
Three Levels of a Product and/or Service
1. Augmented Product
2. Actual Product
3. Core Product
Marketing Philosophies
1. Production-Oriented
2. Sales-Oriented
3. Consumer Oriented—The Right Choice
Reasons for Not Adopting a Consumer Orientation
1. State of competition
2. Production focus
3. Focus on the present
Marketing Research Activities
1. Market Analysis
2. Developing the Marketing Mix
Market Analysis
Evaluation Process Encompassing:
1. market segmentation
2. marketing research
3. Sales forecasting
Developing the Marketing Mix
The combination of product, pricing, promotion, and distribution activities.
Market Analysis Elements
1. Customer profile
2. Sales forecasts
The Competition in Marketing Plan
1. Profile of key management personnel
2. Overall strengths and weaknesses (SWOT)
3. Related products being marketed or tested
4. Likelihood of competitors’ entry into target market
Marketing Strategy
1. Product and/or service section
2. Distribution section
3. Pricing section
4. Promotional section
Marketing Research
The gathering, processing, reporting, and interpreting of market information
Outside Sources
1. Hiring professional marketing researchers
2. Web-based surveys and online focus groups
Steps In the Marketing Research Process
Identifying the informational need
Methods for Collecting Primary Data
1. Observational Methods
2. Questioning Methods
Designing and Testing a Questionnaire
1. Ask questions that relate to the issue.
2. Use open-ended and multiple-choice questions.
3. Carefully consider the order of the questions to avoid…
4. Ask sensitive questions near the end
5. Word questions simply, clearly, and objectively
6. Pretest the questionnaire on representatives
Interpreting the Data Gathered
1. Transforming Data into Information
2. When Research is Too Expensive
When Not To Conduct Formal Research
1. Firm Don’t have money
2. Opportunity Passed
3. Decision to move forward already made
4. You Undecided
5. Needed Info already exists
6. Cost of conducting research outweighs benefits
Understanding Potential Target Markets
1. Market Ingredients
2. Market Segmentation
3. Focus Strategy
Market Ingredients
1. Customers or potential customers who have
2. Purchasing power and
3.Unsatisfied needs
Market Segmentation
The division of a market into several smaller customer groups with similar needs
Focus Strategy
A type of competitive strategy in which cost and differentiation-based advantages are achieved within narrow market segments.
Market Segmentation and Its Variables
1. Segmentation Variables
2. Benefit Variables
3. Demographic Variables
Segmentation Variables
The parameters used to distinguish one form of market behavior from another for the purpose of market segmentation
Benefit Variables
Specific characteristics that distinguish market segments according to the benefit sought
Demographic Variables
Specific characteristics that describe customers and their purchasing power
Types of Market Segmentation Strategies
1. Unsegmented Strategy (Mass Marketing)
2. Multi-Segment Strategy
3. Single-Segment Strategy
Unsegmented Strategy (Mass Marketing)
A strategy that defines the total market as the target market
Multi-Segment Strategy
A strategy that recognizes different preferences of individual market segments and develops a unique marketing mix for each
Single-Segment Strategy
A strategy that recognizes the existence of several distinct segments but focuses on only the most profitable segment.
Estimating Market Potential
1. The Sales Forecast
2. Limitations of Forecasting
The Sales Forecast
1. Prediction of product sold within definite period of time.
2. Assesses the new venture’s feasibility.
3. Handles scheduling, setting inventory levels…
Limitations of Forecasting
1. Unique new business circumstances
2. Lack of familiarity with quantitative methods
3. Lack of familiarity with the forecasting process
Two Dimensions of Forecasting
1. Breakdown process (chain-ratio method)
2. Buildup process
Forecasting and Predicting Variables
1. Direct Forecasting
2. Indirect Forecasting
Steps In the Marketing Research Process
1. Identifying the informational need
2. Searching for secondary data
3. Collecting primary data
4. Interpreting the data