PPT 7-1

Chapter 7

Developing the Marketing Plan

PPT 7-2

Chapter 7

Learning Objectives

PPT 7-3/TM 7-1

Small Business

A.    What is small business marketing?

·       Present the text definition of marketing. Marketing consists of those business          activities that relate directly to the following:  (1) identifying a target market,          (2) determining target market potential, and (3) preparing, communicating, and delivering a bundle of satisfaction to the target market.

PPT 7-4/TM 7-2

Core Marketing Activities

for Small Business

[Acetate 7-1]

PPT 7-5/TM 7-3

Three Distinct

Marketing Philosophies

·      Point out that product, pricing, promotion, and distribution activities form the         firm’s marketing mix.

1.    Marketing philosophies

·        Ask students whether their personal philosophies about education influence their approach to studying, taking tests, and writing research papers. Try to bring out a parallel between this situation and that of an entrepreneur running a business. His or her marketing philosophy will shape the firm’s marketing activities, just as an individual’s personal philosophy influences his/ her approach to education.

·          List the three distinct marketing philosophies: (1) a production orientation was associated with the Industrial Revolution, (2) a sales orientation concentrates on personal selling and advertising, (3) a consumer orientation places the needs     of customers first—the marketing concept begins & ends with the consumer.

2.       A consumer orientation

B.     Marketing research for the new venture

·      Emphasize the importance of conducting marketing research prior to making         many marketing decisions.

PPT 7-6

Popular Web

1.    The nature of marketing research

·          Marketing research involves gathering, processing, reporting, and interpretingmarket information.

·         The Internet is an excellent resource for marketing research data.

·        Discuss the popular web search engines listed in Table 7-1.  Let the students talk    about their personal experiences with these.

PPT 7-7/TM 7-4

The Marketing

Research Process

PPT 7-8A, B

Software and Web

Sites to Assist External

Data Searches

PPT 7-9/TM 7-5

Options for Collecting

Primary Data

2.    Steps in the marketing research process

             a.      Identifying the informational need

b.     Searching for secondary data

·        Discuss the software and web sites that assist external data searches, as listed in Table 7-2.  Note the problems that accompany the use of secondary data.

c.        Collecting primary data

·        Discuss differences between observational & questioning methods.

·        Emphasize the value of personal observation to small businesses.

·        Underscore that surveys are used more often than experimentation.

·        Compare the speed, cost, and amount of information obtained with surveys conducted via mail, telephone, and personal interviews.

PPT 7-10/TM 7-6

The Ingredients

of a Market

C.      Estimating market potential

1.     Ingredients of a market

     Ask students to define the term market in their own words.  Then, describe the typical definitions:

·          A physical location where buying and selling take place (e.g., a farmer’s         market or a supermarket)

·          A process of selling a product (e.g., “We must market the product aggressively.”)

·          A group of customers or potential customers who have purchasing power and unsatisfied needs (e.g., “The target market has 1,000 potential buyers.”)  Note that the “group of customers” defintion requires that each of the following three components be present before a market exists.  (That is, one component in isolation or any two in combination do not comprise a potential market!)

4     A market must contain individuals or business entities.

4     These individuals or business entities must have purchasing power.

PPT 7-11/TM 7-7

Dimensions of

Forecasting Difficulty

3.    Limitations to forecasting

·        Emphasize the difficulty of forecasting by asking students to share what they will be doing one year or five years from now.

·       Explain why, despite forecasting limitations, a sales forecast should be made. (Remember the business plan.)

·       Explain why small firms are typically poor forecasting compared to large firms.  For example:

         4    The forecasting circumstances of small firms are unique—new ideas.

4     Entrepreneurs generally have less appreciation for quantitative techniques.

PPT 7-12/TM 7-8

The Forecasting Process

PPT 7-13/TM 7-9

Sales Forecasting with

4.      The forecasting process

          a.     The starting point

·          The breakdown process (the “chain-ratio method”)—begin with the population figure for the target market and determine a percentage                that can be served.

·         The buildup process—estimate market potential from all likely segments and combine these.

PPT 7-14/TM 7-10

Three Major Elements of

The Formal Marketing Plan

D.    The formal marketing plan

1.    Market analysis

·          Contains a customer profile

·          Provides a detailed discussion of the major customer benefits

·          Elaborates additional target markets

·          Contains the sales forecast as its major element

2.    The competition

·          Profile competitors

·          Discuss strengths and weaknesses of competitors

·          Note related products of competitors

·          Monitor competitors via the Internet

3.    Marketing strategy

                a.      The total product and/or service—plans to transform the basic product or       service idea into a “total product”

                b.     The promotional plan—an approach to create customer awareness

                c.      The distribution plan—getting the product/service to customers

PPT 7-15

BizPlanExpress’s

Marketing Plan Checklist

PPT 7-16

BizPlanExpress on

The following questions may help students uncover the information that will prove critical to conducting effective marketing research and sales forecasting and, in turn, to developing a superior small business marketing plan.

Marketing Research Questions:

1.        What types of research should be conducted to collect the information you need?

2.        How much will this research cost?

3.        What sources of secondary data will address your informational needs?

4.        What sources of relevant data are available in your local library?

5.        What sources of outside of outside professional assistance may prove helpful?

Forecasting Questions:

1.        How do you plan to forecast sales for your product or service?

2.        What sources of forecasting assistance have you consulted?

3.        What sales forecasting techniques are more appropriate to your needs?

4.        What is the sales forecast for your product or service?

Marketing Plan Questions:

1.        What is the customer profile for your product or service?

2.        How will you identify prospective customers?

3.        What geographical area will you serve?

4.        What are the distinguishing characteristics of your product or service?

5.        What steps have already been taken to develop your product or service?

6.        What do you plan to name your product or service?

7.        Will there be a warranty?

8.        How will you set the price for your product or service?

9.        What type of distribution plan will you use?

10.     Will you export to other countries?

11.     What type of selling effort will you use?

12.     What special selling skills will be required?