THE MARKETING PLAN- CHAPTER 10 IDENTIFY the purpose of the marketing plan DESCRIBE the part marketing tactics play in the marketing plan NAME the five marketing strategies that make up the marketing mix Marketing the iPad and iPad Apps WHAT DO YOU NEED BEFORE YOU START MARKETING? Marketing Plan Blueprint used by a business to guide its marketing activities to a desired conclusion. It should include: Target Market Objectives Mix of Marketing Strategies Marketing Budget Marketing Tactics Marketing Tactics Activities that need to be taken to carry out the marketing plan MARKETING DEFINITIONS Target Market The group of people you plan to market your product to. (Demographics) Marketing Objectives Goals a business wants to accomplish through its marketing efforts. MARKETING MIX FIVE “P”s of Marketing Product Price Place Promotion PEOPLE! PRODUCT STRATEGY What goods and services is your business going to provide consumers? Your product will be identified by… 1. Brand: Name, symbol, or design used to identify a product 2. Package: Physical container or wrapper that holds the product 3. Label: Part of package used to present information PRODUCT STRATEGY Product Positioning How consumers view your product compared to the competitions product. Prestigious? Good Bargain? Equal in Quality? Product Mix All of the products a company makes and sells. EX: Kim Kardashian PLACE STRATEGY How are you going to deliver your goods and services to customers? Will your product be for sale where and when your customers what it? Channel of Distribution Path your product takes from producer (manufacturer) to consumer Direct Distribution: Move from producer to consumer with NO ONE in between Indirect Distribution: Intermediaries move products between producer to consumer. 1) PRODUCER Business that gathers raw goods. Materials gathered in their original state from natural resources. T-SHIRT Cotton & Polyester 2) PROCESSOR Changes raw materials into a more finished product. T-SHIRT Turn cotton and polyester into thread Create Twill for seam binding 3) MANUFACTURER Business that makes finished products out of processed products. T-SHIRT Creates the t-shirt of out the thread and seam binding 4) INTERMEDIARY Business that moves goods from one business to another. It buys goods, stores them, and then resells them. T-SHIRT Buys the ready-made t-shirts in very large quantities and stores them. They sell these shirts to wholesalers 5) WHOLESALER (DISTRIBUTOR) Distributes goods by dividing large quantities into smaller ones and sells them to retailers. T-SHIRT Divide and distribute the t-shirts in smaller quantities to stores 6) RETAILER Purchases goods from a wholesaler and sells them to consumers, the final buyers of the goods. T-SHIRT Consumers buy the t-shirt from a retailer. Kohl's American Eagle GRAPHIC ORGANIZER 1. Wholesaler 2. Processor 3. Manufacturer 4. Retailer 5. 6. Producer Intermediary Group 1: Selecting a Channel of Distribution (229) Group 2: Intensity of Distribution (230) Group 3: Transportation (230-231) Group 4: Location, Layout, Availability (231) Group 5: Questions to Ask About Place Decisions (232) Group 6: Impact of Technology on Place Strategy (232 & Figure 10.3) THE PRICE STRATEGY- CHAPTER 11 • IDENTIFY factors that affect pricing strategy • SUMMARIZE the marketing objectives related to pricing • DESCRIBE the components that go into making price strategy decisions PRICE STRATEGY Setting a price for a good or service is not easy. Things to take into consideration: COSTS SUPPLY AND DEMAND CONSUMER PERCEPTIONS COMPETITION GOVERNMENT REGULATIONS TECHNOLOGICAL TRENDS Fixed Expenses: Costs that DO NOT vary with the number of units sold Variable Expenses: Costs that DO vary with the number of units sold THINK/PAIR/SHARE--- 3 examples of each! SUPPLY AND DEMAND Inelastic Demand: Customers will buy a product regardless of price Elastic Demand: Prices are sensitive to demand Dominick's and Jewel Price Fixing Article CONSUMER PERCEPTIONS Prices too ? Consumers may believe your product lacks quality Prices too ? Consumers may believe your product is of higher quality and status What should your prices be for your specific target market? GOVERNMENT REGULATIONS Price Gouging Practice of pricing above the market with no alternatives Price Fixing An illegal practice in which competing companies agree on specific prices Unit Pricing Required pricing of goods on the basis of the cost per unit of measure (pound, ounce) SETTING A BASIC PRICE Cost-Based Pricing You must consider your business costs and profit Objectives Markup: The amount added to your cost to cover expenses Demand-Based Pricing Only used if your product is inelastic AND your Product has a greater value than competitors Competition-Based Pricing Find out what your competition charges and then decide if your price should be lower, the same, or higher PRICING POLICIES Flexible-Pricing Policy Allows customers to bargain for a price Advantages and Disadvantages? Examples? One-Price Policy All customers are charged the same price Advantages and Disadvantages? Examples? PRICING TECHNIQUES Discount Pricing Cash Discounts (2/15, n/30) Quantity Discounts Seasonal Discounts Psychological Pricing The customers perception of the product are strongly influenced by price PRICING WORKSHEET! CALCULATING PRICES Break-Even Point– When the cost to make the item equals how much you made (Fixed Cost/Unit Selling Price)-Variable Costs Markup- Amount added to the cost of an item to cover expenses and ensure a profit $$ Price – Cost = PROFIT! Markdown- The amount of money taken from the original price Price X Markdown % = $ Markdown THE PROMOTION STRATEGY- CHAPTER 12 EXPLAIN the role of the promotion strategy EXPLAIN how to formulate promotional plans IDENTIFY considerations for putting together a promotional mix DESCRIBE the elements of a promotional mix PROMOTIONAL STRATEGY Communication intended to persuade, inform, and remind a target market about a business and its products Promotional Plans Preopening Plan Establish a positive image Let customers know you are opening for business Bring in customers/have them contact you Make customers interested Ongoing Plan SELECTING A PROMOTIONAL MIX Combination of different promotional elements that a company uses to reach and influence potential customers Considerations that need to be made: Target Market Product Value Promotional Channels Time Frame Cost ADVERTISING Paid non personal presentation of ideas, goods, or services. Advertising Campaign- Series of related promotional activities with a similar theme Successful Advertising Campaigns DIFFERENT TYPES OF ADVERTISING Newspapers Magazines Direct Mail Outdoor Advertising Directories Transit Advertising Specialty Items Television Radio Internet INTERNET ADVERTISING ** #1 Fastest growing medium for advertising ** Advantages Disadvantages Expanded Markets Buyers do not have an opportunity to physically see the product No Geographic Location Security Cost Savings Quick Turn Around Time Website Goals: 1. Attract Visitors 2. Convert Visitors SALES PROMOTION The use of incentives or interest-building activities to stimulate traffic or sales. Premiums- Anything of value that a customer receives in addition to the product purchased (ex.- coupons and gifts) Rebates- a return of part of the purchase price SALES PROMOTION CONT. Displays Samples- Free trial size samples or in store samples (Costco!) Sweepstakes and Contests Sweepstakes: a simple game of chance Contest: Customer has to do something to win CUSTOMER KNOWLEDGE Rational Buying Motive • • • • • • • • • A conscious, logical reason to make a purchase Product dependability Time or money savings Convenience Comfort Health or safety issues Recreational value Service Quality Emotional Buying Motive • A feeling a buyer associates with a product • • • • • Social approval Recognition Power Affection Prestige PUBLICITY Placement in the media of newsworthy items about a company or product Ways to draw attention to your business: 1. Write news releases- brief newsworthy story sent to the media 2. Write Feature Articles 3. Submit captioned photos 4. Call a press conference 5. Seek interviews 6. Public Relations- activities designed to create goodwill toward a business BUDGETING FOR PROMOTION Industry Average- Standard used to compare costs from promotional expenses Not Creative? GET HELP! 1. All major media advertising companies have advertising departments 2. Cooperative Advertising- Advertising costs are divided between two + parties 3. Advertising Agency- Company that acts as an intermediary between the business and the media to communicate a message to the target market 4. Web Designers PEOPLE STRATEGY How will your business assemble, prepare, and maintain the people who will help you achieve success? Basic Hiring Criteria Developing Employees Establishing a productive environment Rewarding Employees COMMERCIALS Add relevant commercials and discuss the 5 “P”s of marketing.