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SMALL BUSINESS MANAGEMENT
Chapter 8Marketing Management
Kotler’s social definition:
“Marketing is a social and managerial process by which individuals and groups obtain
what they need and want through creating and
exchanging products and value with others.”
The Role of Marketing Management in the Small Business Defining the target customer,
characteristics and wants and needs. Understanding the environmental that
affect operations. Developing the product and/or service. Developing the channels of distribution. Setting price levels of the product
and/service. Promoting the product and/or service to
those influential in its purchase.
Target Customer(Market).1. Consumer Market.2. Organization market.3. Export market.
How do find out information about the target customer---Market research.
Market Research data collection
1. The Consumer Market Demographics.
Age, income, education, occupation, location.
Lifestyle characteristics. Activities, interests opinions.
Purchase characteristics. What when where how much of
product. Purchase motivations.
Why?.
2. The Organization Market Companies and government agencies
that purchase from small businesses. Influences on industrial demand.
The economy, Government legislation and regulations, Potential competition. Agencies that exert influence on
purchasers. The Bidding-Tendering Process.
3. The Export Market Government Assistance for
Exporting.
Unique Characteristics of the Foreign Market.
Mechanisms of Exporting. Documentation, credit offered,
distribution, Security.
Influences External to the Market
The Economy. Competition. Legal Restrictions. Social and Cultural Environment. Technology.
Influences External to the Market. Management of External Influences
The Influences. Economy, competition, legal Restrictions,
socio/cultural Environment, technology. The Possible Characteristics. System to Monitor. Possible Internal Adjustments.
Developing the Product or Service1. Develop Product and/or Service
Policies.2. Decide how the product will be
manufactured.3. Understand the product life cycle.
appeal to new target markets, adjust to changes in customer needs, increase promotion to increase purchase frequency, emphasize different uses, offer a new product or service.
product life cycle
Developing the Product or Service (cont)
4. Determine Factors that Accelerate Adoption. relative advantage. Complexity. Divisibility. communicability of results.
Developing the Product or Service (cont)
5. Understand How the Consumer Classifies the Product and/or Service. convenience products. shopping products. specialty products.
How the Consumer Classifies the Product and/or Service convenience products.
Staple vs impulse. shopping products.
appliances, stereos, cameras. specialty products.
Mercedes.
How the Organizations Classifies the Product and/or ServiceProduction Goods
Raw Materials: Component parts: becomes part of the physical
product Process materials: not readily identifiable part
of the production of other products Support Goods
Major Equipment: Accessory Equipment: Type writers and tools Consumable Supplies: IE Paper, pencils or oils Business to Business services: Financial, legal
marketing research etc.
Developing the Distribution System (Fig 8-9) Channel Options.
Manufacturer to Consumer (Short-Direct). Manufacturer to Wholesaler to retailer to
consumer (Long-Indirect). Channel length. Channel Intensity.
convenience goods, and Raw material.
Setting the Price for the Good and/or Service
Cost-Based Pricing Demand-Based Pricing
elasticity Competition-Based Pricing
Movement & Shift of demand curve
Promotion
Types of Promotion Advertising.
types, advantages, disadvantages, suitability, costs.
Sales Promotion. Public Relations. Personal Selling.
Steps in a Promotional Campaign
1. Set Promotional Objectives (NUMBERS).
2. Determine the Promotional Target.3. Understand the Target’s Needs and
Perceptions of the Product/Service.4. Develop the Relevant Theme.5. Determine the Method or Media to
Use.
Steps in a Promotional Campaign (cont)
6. Develop a Specific Promotional Message.
7. Set the Promotional Budget.
8. Implement the Program.
9. Evaluate the Effectiveness of the Promotion.
Concept Checks1. What is marketing?.2. What are the three target markets
in which a small business can segment?.
3. What three areas should be investigated before developing an export market?.
4. What are the most common external influences that can affect a small business?.
Concept Checks5. What steps should an owner-
manager follow in working with external influences?.
6. Explain the significance of the Product Life Cycle.
7. When would a small business have another company manufacture its product?.
8. What factors can assist speeding up the adoption rate of new products ?.
Concept Checks9. What are the consumer goods
classifications?.10.What are the three main decisions
in developing the distribution system?.
11.What characteristics help determine the length of the distribution channel?.
12.What characteristics require a more intensive channel?.
Concept Checks13.What are the three methods of
price setting?.14.Define price elasticity.15.What are the four methods of
promoting a product or service?.16.Identify the steps in developing a
promotional campaign.
Appendices A. Agencies Providing Export
Assistance B. Advertising as Practiced by Small
Business C. Directories of Trade Shows and
Exhibitions D. Checklist for a Marketing Plan