ENTREP | WW2 Reviewer

Target Market

aims to determine buyers with common needs and characteristics that you need to focus on for your enterprise

Importance of Target Market

While multiple people want to purchase your product/service, they may want that product for different reasons. Selecting your target markets allows you to know accurately how to promote and sell your product.

Segmentation

grouping of potential customers together by focusing on certain traits such as age, gender, income, occupation & family status and education

Marketing Segmentation

aggregating prospective buyers into groups or segments with common needs and who respond similarly to a marketing action

Segmentation Variable Types

• demographic

• geographic

• psychographic

• behavioristics

Demographic Variables

based on the statistical characteristics, examples include:

• age

• gender

• race

• ethnicity

• income

• education

• occupation

• family size

• family life cycle

• religion

• social class

Geographic Variables

based on the location of the buyer, examples include:

• climate

• dominant ethnic group

• culture

• density (rural or urban)

Psychographic Variables

based on the way the buyers think, examples include:

• needs and wants

• attitudes

• social class

• personality traits

• knowledge and awareness

• brand concept

• lifestyle

Behavioristic Variables

based on the way the buyers act, examples include:

• volume usage

• end use

• benefit expectations

• brand loyalty

Marketing Mix

the actions and strategies taken by entrepreneurship to market their product, or make it known to consumers

Product

• refers to any goods or services that is produced to meet the consumers’ needs, wants, tastes and preferences

• is considered excellent if the received benefits by the consumer exceeds the amount of money they paid

Goods

tangible products

Service

intangible products that improve the quality of life for you or your possessions

Value Proposition

is a general business or marketing statement that summarizes why a consumer should buy a company's product or use its service

Unique Selling Proposition

• refers to how you sell your product or services to your customer, addressing the their wants and desires.

• statement that sets your product apart from other competitors

Feature-Advantage-Benefit (FAB) Table

helps produce a unique selling proposition

FAB Table | Feature

shows how one’s product is differentiated from its competitors

FAB Table | Advantage

shows the advantage of the aforementioned feature

FAB Table | Benefit

shows what benefits the product features can provide

Packaging

the outside appearance of a product and how it is presented to the customers

Basic Functions of Packaging

1. Protection

2. Information

3. Utility of Use

Protection of Packaging

provides this for the effects of time and environment on natural and manufactured goods

Information of Packaging

conveys necessary information to the consumers

Utility of Use of Packaging

the convenience packaging has been devised for foods, household
chemicals, drugs, adhesives, paints, cosmetics, paper goods and a host of other products

Place Strategy

How products and services get from the produce to the consumer

Business Vicinity Map

• helps understand the area to better understand the potential customers such as:

  • the demographics of the area to know how to target the customers

  • the major roads to better understand the foot traffic

Consumer Markets

those from households who purchase for personal consumption

Business Markets

those who purchase for resale, direct use in the production of other products, and/or daily business operation use

Distribution Channel Strategy

how the products are distributed

Direct Distribution

A strategy where the product goes from seller to end consumers. This prevents any additional mark-up from being added. Examples include

• Manufacturer to End Consumer

• Manufacturer to Agent to End Consumer

• Manufacturer to Business Markets

• Seller to End Consumer

Indirect Strategy

The product is handled by an intermediary before reaching the customer. It is helpful for newer businesses as it allows them to have a wider reach. Examples include:

• Manufacturer to Wholesaler to Retailer to End Consumer

• Manufacturer to Retailer to End Consumer

• Wholesaler to Retailer to End Consumer

Channel Types

1. Single-channel

2. Multi-channel

3. Omni-channel

Single-channel

There is only one warehouse and one physical store, both of which have a direct communication with each other. The physical store distributes it directly to the customers. It is ideal for start-up businesses.

Multi-channel

There is multiple warehouses, one for each store (i.e. one for an online store and another for a physical store). This allows for each store to have their own inventory. It is ideal for large companies with plenty of bulk orders.

Omni-channel

There is one warehouse for both the online and physical stores. They share the inventory, allowing for proper integration between both stores. It is ideal for medium sized channels.

Positioning Strategy

refers to the place that a brand occupies in the minds of the customers and how it is distinguished from the products of the competitors

Steps of Positioning Strategy

1. Determine company uniqueness by comparing to competitors.

2. Identify current market position.

3. Competitor positioning analysis.

4. Develop a positioning strategy.

Promotional Strategies

• the complete set of activities, which communicate the product, brand or service to the use

• focuses on creating the awareness and persuading the customers to initiate the purchase

Promotional Mix Types

1. Advertising

2. Direct Marketing

3. Sales Promotion

4. Personal Selling

Advertising

Any paid form of non-personal presentation and promotion of goods and services by the identified sponsor in the exchange of a fee.

• Print

• Electronic

• Television

• Word of Mouth

• Social Media

Personal Selling

a face to face interaction between the company representative and the customer

Sales Promotion

Short term incentives given to the customers to have an increased sale for a given period.

• Free Sample

• Free Trial

• Free Gifts

• Special Pricing

Direct Marketing

With the intent of technology, companies reach customers directly without any intermediaries or any paid medium.

Pricing Strategy

refer to the processes and methodologies businesses use to set prices for their products and services

Price

• The value of money in exchange for a product or service.

• The amount or value that a customer gives up to enjoy the benefits of having or using a product or service.

Types of Pricing Strategy

1. Penetration Pricing

2. Psychological Pricing

3. Optional Pricing

4. Dynamic Pricing

Penetration Pricing

the price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased.

Psychological Pricing

the practice of setting prices slightly lower than rounded numbers, in the belief that customers do not round up these prices

Optional Pricing

company earns more through cross-selling products along with a basic core product. The main product does not have many features which can be enhanced through optional or accessory products.

Dynamic Pricing

the practice of varying the price for a product or service to reflect changing market conditions, in particular the charging of a higher price at a time of greater demand.

Unit Cost

the total cost of producing, storing, and selling a single unit of a product or service

Unit Cost Formula

Variable Cost + (Fixed Costs / # of Units)

Variable Cost

materials you can directly see on the product (e.g. raw materials/ingredients, packaging)

Fixed Cost

related costs not seen on the product (e.g. equipment, rent, wages)

How to Get the Unit Cost

1. Identify and compute for the variable and fixed costs

2. Compute for the unit cost using the formula.

Using Mark-Up Pricing

1. Compute for the mark-up percentage to obtain the peso mark-up value (PMV).

2. Add the PMV to the unit cost to obtain the mark-up price.

3. Apply any pricing strategy if needed, assuming it is based on market research.