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McGraw-Hill/IrwinEntrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 8ENREPRENEURSHIP

Entrepreneurship 8th editionAuthor:

Robert D Hisrich,Micheal P. PetersDean a Shepherd

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Written Statement Of Marketing objectives,

strategies and Activities to be followed in Business Plan

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MP responds to three Q’s Where have we been ?Where are we going ?How do we get there ?

‘E’ conduct market research to respond to these Q’s

Research involves Secondary / Primary data process

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Who will buy the product or service ? What is the size of the potential market ? What price should be charged ? what is the most appropriate distribution

channel ? What is the most effective promotional

strategy to reach and inform potential customers ?

Market Research involves gathering of data in orderto determine such information:

Market Research involves gathering of data in orderto determine such information:

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MStep One: Defining the Purpose or Objectives

Step Two: Gathering Data from Secondary Sources

Step Three: Gathering Information from Primary Sources

Step Four: Analyzing and Interpreting the Results

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M Sit down & Make a list of the information that

will be needed to prepare the marketing plan.

Ex: ‘E’ may think there is a market for his product but is not sure who the customers will be

So ask people what they think of the product or service and if they would buy it & background demographics

How much potential customers would be willing to pay for the product or service

Where the potential customers would prefer to purchase the product or service

Where the customer would expect to hear about or learn about such a product or service

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M Newspaper articles- Libraries: Government agencies- Trade magazines: dept & Chamber of

commerce Internet

Dept & Chamber of Commerce

Local Banks/ Dept of Labor

Local Media

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Data collection procedures

Observation: record customers buying behaviors

interviewing: telephone- Mail- personal

focus groups: 10-12 potential customers

Questionnaire: sample questionnaire

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Can be hand-tabulated or entered on a computer

Results should be evaluated and interpreted in response to the research objectives

Data can be cross-tabulated in order to provide more focused results.Example: Entrepreneur compare results of Q’

by different Age, Occupation, Location- fine tuning can provide valuable insights particularly regarding the segmentation of the market

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M Designed to provide answers to three basic questions:Where have we been?(operational plan)

Where do we want to go (in the short term)?

How do we get there?

History of marketplaceMarketing Strengths & Weaknesses of

the firmMarket Opportunities & Threats

‘Q’ addresses marketing Objectives & Goals- in next 12 months

Q discusses Marketing strategy implementation- when it will occur- who

will be responsible for monitoring

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M A marketing plan should:Provide a strategy.Be based on facts/assumptionsBe simple and short.Be flexible.Specify criteria for control.

Assignment “Exams”

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M Combination of product, price, promotion, and

distribution and other marketing activities needed to meet marketing objectives.

Marketing Mix Variable

Critical Decisions

ProductQuality of components or materials, style, features, options, brand name, packaging, sizes, service availability, and warranties.

PriceQuality image, list price, quantity, discounts, allowances for quick payment, credit terms, and payment period.

Channels of distribution

Use of wholesalers and/or retailers, type of wholesalers or retailers, how many, length of channel, geographic coverage, inventory, and transportation.

PromotionMedia alternatives, message, media budget, role of personal selling, sales promotion (displays, coupons, etc.), and media interest in publicity.

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M Define the business situation. Define the target market: opportunities and

threats. Consider strengths and weaknesses. Establish goals and objectives. Define marketing strategy.

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Information for a new venture:Describe how the product or service was developed.Why it was developed.(satisfy consumers needs)

Information after a new venture has started up:Present market conditions.Performance of the company’s goods and services.Future opportunities or prospects.

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Target market: specific group of potential customers toward which venture aims its marketing plan. Knowledge of this provides a basis for determining

the appropriate marketing action strategy.

Market segmentation: process of dividing a market into definable and measurable groups for purposes of targeting marketing strategy Otherwise ‘E’ have to identify a product or service

that would meet the needs of everyone in the marketplace

Allows the entrepreneur to more effectively respond to the needs of more homogeneous consumers.

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M Decide on general market or industry to pursue.

Henry ford manufactured a single product(one color,

one style, one size, etc) Reebok Discovered that many customers who bought running

shoes were not athletes (comfort & Style) Divide market into smaller groups based on:

Characteristics of the customer Geographic Demographic Psychographic

Buying situation Desired benefits (e.g., product features) Usage (e.g., rate of use) Buying conditions Awareness of buying intention

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Select segment or segments to target. Develop a marketing plan integrating product,

price, distribution, and promotion.

Restaurant market is segmented by state, type of restaurant (fast food,

family)R part of hospital, school, company etc

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M Establish realistic and specific goals and objectives. Marketing goals and objectives respond to the

question: “Where do we want to go?”.

( market share, profits, sales, number of distributors, new product launch, pricing policy,

sales promotion & advertising support). Number of goals or objectives can be

limited to between six and eight.

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M Specific activities outlined to meet the venture’s business plan goals and objectives.

Product or service May consider more than the physical characteristics. Packaging, brand name, price, warranty, image,

service, delivery time, features, style, and even the Web site.

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M Pricing

Costs CompetitionMargins or markups

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M Distribution

Provides utility to the consumer.

Must also be consistent with other marketing mix variables.

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M Promotion

Entrepreneur needs to inform potential consumers about the product’s availability or to educate the consumer

Methods include: print, radio, or television, Internet, direct mail, trade magazines, or newspapers.