8-1
- A written statement of marketing
objectives, strategies, and activities to be followed in
business plan.
• It is designed to provide answers to 3 basic questions:
1. Where have we been?
2. Where do we want to go (in the short term)?
3. How do we get there?
8-2
Selecting a Market and Establishing a Position in
the Market
• Important Question That All Startups Must Ask
(Who
are our customers are how will we
attract them?)
by following a three-step process:
• Segmenting the market.
• Selecting a target market.
• Establishing a unique position in the target market
11-3 8-3
The marketing plan will consist of four important marketing
variables, called the Marketing Mix
“The Four Ps of Marketing for New Ventures”
Product
Price
Marketing Mix
Promotion
Place (or
distribution)
11-4 8-4
Marketing mix:
• A combination of product, price, promotion,
and distribution and other marketing activities
needed to meet marketing objectives.
1. Product
– Is the good or service a firm offers to its target market.
– The initial rollout is one of the most critical times in the
marketing of a new product.
– All firms face the challenge that they are unknown and that it
takes a leap of faith for the first customers to buy their
products.
8-5
2. Price:

Price is the amount of money consumers pay to buy a
product.

Most entrepreneurs use one of two methods to set the price
for their products:
 Cost-Based Pricing
 Value-Based Pricing
8-6
Core Product vs. Actual Product
Cost-Based Pricing
Value-Based Pricing
The list price is
determined by adding a
markup percentage to a
product’s cost.
The list price is
determined by
estimating what
consumers are will to
pay for a product.
11-7 8-7
3. Promotion:
– Refers to the activities the firm takes to communicate the
merits of its product to its target market.
– There are several common activities that entrepreneurs use
to promote their products and services such as:
A. Advertising
– Advertising is making people aware of a product or service
in hopes of persuading them to buy it.
8-8
Pluses and Minuses of Advertising
Pluses
• Raise customer awareness of a product.
• Explain a product’s comparative features and benefits.
• Create associations between a product and a certain lifestyle.
Minuses
• Low credibility.
• The possibility that a high percentage of people who see the add
will not be interested .
• Relative costliness compared to other forms of promotion.
11-9
8-9
Steps Involved in Putting Together an
Advertisement
11-10 8-10
B. Google Ad Words:
• Allows advertisers to buy keywords on the Google home page.
• Advertisers pay a certain amount per click.
• The program includes local, national, and international
distribution
C . Public Relations:
•
•
One of the most cost-effective ways to increase the awareness of
the products of a company
The major difference between public relations and advertising is
that public relations is not paid for.
8-11
4 .Distribution:
– Involves all the activities that move a firm’s product from
its place to the consumer.
– The firm should decide how to sell its products, directly to
consumers or through intermediaries (such as wholesalers
and retailers).
– The decision depends on how a firm believes its target
market wants to buy its product.
8-12
Selling Direct Versus Selling Through a
Intermediary
2 of 2
11-13 8-13
• Step One: Defining the Purpose or Objectives
 How -Make a list of the information that will be needed to prepare
the marketing plan.
 Marketing objectives define what you want
to accomplish through your marketing activities.
There are several important factors to consider
when establishing effective marketing objectives.
 SMART Approach = Setting specific, measurable,
achievable, realistic and time specific objectives
8-14
• Step Two: Gathering Data from Secondary
Sources
Secondary sources can include trade
magazines, newspaper articles, libraries,
government agencies, the Internet, and
commercial data.
8-15
• Step Three: Gathering Information from Primary
Sources
Data collection procedures - Observation, networking,
interviewing, focus groups, and experimentation.
Data collection instrument - Questionnaire.
• Step Four:
Analyzing and Interpreting the Results
– Results can be tabulated by hand or on a computer.
8-16
A marketing plan should:
1. Provide a strategy.
2. Be based on facts/assumptions.
3. Describe an organization for implementation.
4. Provide for short-term and long-term continuity.
5. Be simple and short.
6. Be flexible.
7. Specify criteria for control.
8-17
1. Defining the Business Situation:
 Situation analysis
– Is a review of where the company has been and considers many
of the environmental factors.
•
The entrepreneur should provide a review of past performance of
the product and the company.
• Industry analysis should include information on market size, growth
rate, suppliers, new entries, and economic conditions.
8-18
In case of a new venture
After a new venture has started up information should
relate to:
1. Present market conditions.
2. Performance of the company’s goods and services.
3. Future opportunities or prospects.
8-19
2.Defining the Target Market/ Opportunities and
Threats :
Process of segmenting and targeting customers on general market
or industry .
Divide market into smaller groups based on:
Characteristics of the customer – Geographic,
demographic, and psychographic.
Buying situation – Desired benefits, usage, buying
conditions, and awareness of buying intention.
8-20
Market segmentation - Dividing a market into
definable and measurable groups for purposes of
targeting marketing strategy.
The Target market - is specific group of
potential customers toward which the venture aims
its marketing plan.
8-21
3 .Considering Strengths and Weaknesses:
It is important for the entrepreneur to consider its
strengths and weaknesses.
8-22
4.Establishing Goals and Objectives
a. These are statements of level of performance desired
by new venture.
b. These goals should specify such things as market
share, profit, sales, market penetration, pricing policy,
and advertising support.
c. Realistic and specific marketing goals and objectives
respond to the question: “Where do we want to go?”.
d. Not all goals and objectives must be quantifiable.
e. Goals should represent key areas to ensure marketing
success.
8-23
5. Defining Marketing Strategy and Action Programs
Marketing Strategy
Consumer VS Business-to-Business Markets
– Business-to-business markets
involves selling of products or services to another business.
• Usually aims at selling a large volume in one transaction.
• Involves a more direct channel of distribution.
--Consumer markets
Involve sales to households for personal consumption.
8-24
6.Coordination of the Planning Process
•The management team must coordinate the planning
process.
•The entrepreneur may be the only person involved but
may lack experience in preparing the plan.
8-25
7. Designing Responsibility for Implementation:
•The plan must be implemented effectively to meet all of
the desired goals and objectives.
•Someone must take the responsibility for implementing
each decision made in the marketing plan
8-26
8. Budgeting the marketing strategy :
1
Costs should be reasonably clear.
2
Assumptions, if necessary, should be clearly stated.
3
This budgeting will be Useful in preparing the financial plan.
9. Implementation of the marketing plan:
1. The plan is meant to be a commitment by the entrepreneur
to a specific strategy.
2. A commitment to make adjustments as needed by market
conditions is also valuable.
8-27
10.Monitoring the Progress of Marketing Actions:
Involves tracking results of the marketing effort.
8-28
Minor adjustments in the plan are normal;
significant changes indicate a poorly prepared plan.
Weaknesses in market planning may be due to:
1. Poor analysis of the market and competitive
strategy.
2. Unrealistic goals and objectives.
3. Poor implementation of the outlined plan actions.
4. Unforeseen hazards like weather or war.
8-29