CHAPTER 5 : Marketing Planning for Business Start-ups

INTRODUCTION

  • Definition of Marketing (Kotler, 2014):
    "The science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires."

  • Focus: Basic marketing knowledge and its applicability for start-ups and small businesses.

Important Concepts in Marketing

Needs, Wants, Demand, Values, and Satisfaction

  • Entrepreneurs must understand target customers regarding needs, wants, and demands to create valuable products/services.

  • Importance of gathering and analyzing information to comprehend customer behavior and motivations for effectively developing marketing strategies.

Definitions

  • Needs : Feelings of a state of inadequacy within a person.

  • Wants : Desires that extend beyond basic needs, influenced by factors like psychographics, demographics, economics, and culture.

  • Demands : Needs and wants that can be turned into real purchases, as customers are both able and willing to pay for them.

  • Value : The benefit received when purchasing a product/service. Importance of perceived value exceeding price for customer motivation to purchase.

  • Price : Monetary cost of a product/service. Marketers aim to package: products, pricing, promotion, and distribution to enhance perceived value.

  • Customer Satisfaction : Crucial for repeated sales and growth; satisfied customers promote through word-of-mouth.

Market Segment, Target Customers, and Positioning

  • Market Competition: Sellers compete to satisfy customers; essential for marketers to identify target customers.

  • Segmentation: Dividing potential customers into segments with shared characteristics for tailored marketing strategies.

  • Positioning: Refers to how customers perceive a brand compared to competitors. Influenced by company communications and project images (e.g., Subway's tagline "Eat Fresh").

Customer Relationship Management (CRM)

  • Focus on building relationships with existing customers to foster loyalty.

  • Objective: Establish a mutually beneficial relationship with customers.

  • Research indicates lower costs in maintaining and developing good relationships with existing customers versus acquiring new ones.

Marketing Plan

  • Successful marketers create a marketing plan serving as a roadmap.

  • A marketing plan includes:

    • Data collection and analysis of customers, competitors, environment.

    • Outlining realistic marketing objectives, strategies, and budgets for execution.

Marketing Mix

  • Refers to marketing strategies, commonly articulated through the 4Ps: Product, Price, Promotion, Place.

Product

  • Development of product strategies to create value. Elements include:

    • Core function

    • Branding

    • Packaging

    • Additional value elements: design, extended warranties, after-sales services, etc.

Price

  • Pricing strategy should ensure affordability for customers while being profitable for the business. Strategies include:

    • Cost-based pricing: Cost plus desired profit margin.

    • Value-based pricing: Based on customers' perceived value.

    • Competitor-based pricing: Relative to competitors' prices.

    • Psychological pricing: Pricing influenced by psychological factors rather than economic rationale.

Promotion

  • Refers to how marketers communicate with customers and other stakeholders, including suppliers and distributors.

  • Promotional strategies include:

    • Sales promotions to encourage immediate purchases (e.g. contests, discounts, coupons).

    • Advertising through various media (printed, electronic, online).

    • Effective methods must achieve maximum impact at minimum cost.

    • Innovative strategies utilizing social media platforms like Instagram, Twitter, Facebook for outreach.

Place

  • Strategies to ensure product availability to target customers.

  • Functions of distribution channels include:

    • Selling

    • Information provision

    • Logistics

    • Research

    • Financing

  • Direct channels: Producers deliver directly to customers, with online sales as a significant method.

Marketing and Entrepreneurship

  • Marketing is a business approach based on understanding customers and delivering value profitably.

  • Deployment of effective marketing strategies (4Ps) mirrors a firm's insight into customer needs/wants.

  • Increasing interest and challenge due to evolving market environments (particularly for online businesses and mobile applications).

Summary

  • A marketer’s role encompasses identifying sales opportunities to target customers through effective marketing strategies, ultimately aiming to create profit while benefiting customers.