3.05 Employ Marketing

information to develop a

Marketing Plan

Researching the Industry• Trends and patterns of change

• Industry forces that affect your business – understanding competitive forces can

help a business plan a strategy to succeed

• ◦ Barriers to entry

• ▪ barriers to entry – conditions or circumstances that make it difficult or costly for

outside firms to enter a market to compete with the established firm or firms

• ▪ economics of sale – situations where the cost of producing one unit of a good or

service decreases as the volume of production increases

• ▪ brand loyalty – loyalty to or the tendency to buy a particular brand of a product

• ◦ threats from substitute products

• ◦ sources of supply

• ◦ buyers' ability to bargain

• ◦ technology

Researching the Industry (con’t)

Industry demographics – includes the number of companies, annual revenues, and average size of the companies by number of employees

• The competition

• ◦ market share – a portion of the total sales generated by all competing companies in a given market

• ◦ niche – a small, specialized segment of the market

• ◦ market positioning – the act of identifying a specific market niche for a product

• ◦ competitive advantage – a feature that makes a product more desirable than its competitors' products

Researching the Industry (con’t)

Competitive Intelligence – Competitive advantage – studying the competition is critical to finding your company's competitive advantage. The following list ways that are helpful to understanding your competition:

• ◦ visit competitors' outlet

• ◦ buy your competitors' products• ◦ search the internet and your competitors' web sites•

Researching the target customer

• ◦ creating a customer profile – a complete picture of a venture's prospective customers

• ◦ evaluating customers' needs

• ▪ customer needs analysis – pinpoints the features and benefits of your goods and

services that customers value

• ◦ forecasting demand – three ways to forecast a demand figure:

• ▪ one, to use historical analogy products

• ▪ two, to interview prospective customers and intermediaries

• ▪ three, to go into limited production to test the market

• Issues in entrepreneurship

Mass Marketing

Mass Marketing is trying to reach all customers with a single marketing plan

Competitive Analysis – section of a business plan that should demonstrate the proposed advantage of the business over its competitors. You can gather information on competitors the following ways:

• ◦ viewing their web site

• ◦ talking to their customers, vendors, suppliers, or

• employees

• ◦ attending trade shows◦

• ◦ searching newspaper and magazine databases

Adjusting to sales environment changes

• ◦ SWOT analysis – a strategic planning technique that analyzes a company's

internal strengths and weaknesses, and studies opportunities and threats in the

external sales environment

• ▪ Internal factors may include:

• changes in spending on other parts of the company's marketing and promotional

mix

• changes in what is happening in different territories or markets

• changes in sales management practices

• changes in number of salespeople supervised by one person

• ▪ External factors may include:

• intensity of competition-based

• total market potential

• concentration of potential high-volume buyers

• geographic distribution of customers

Resources

Allen, K.A., & Meyer, E.C. (2006). Entrepreneurship and small business management (pp. 104,124-129,293 ). Woodland Hills, CA: McGraw-Hill Glencoe.