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MODULE 3: EXPOUNDING THE MARKETING PLAN


IDENTIFYING COMPETITORS IN THE MARKET

n running your business, you must not forget that you have competitors who offer products or services that are the same or similar to yours. They are a threat to your business because they can initiate sudden moves that can potentially harm your business or, even worse, wipe it out. But not all competitors have the capacity to strongly impact your business. You need to identify direct and indirect competitors. 


DIRECT COMPETITORS-re the ones whose movements or strategies you have to closely watch out for


INDIRECT COMPETITORS-are competitors who offer a group of products/service that are substitutes to your product/service. 


ANOTHER WAY TO DISTINGUISH YOUR DIRECT AND INDIRECT COMPETITORS IS BY SIZE:


LARGE COMPETITOR-has a capacity to offer the product/service in a bigger scale or volume than you.


SMALL COMPETITOR- that offers the same or similar products/services but with a lesser volume or scale than what you offer.


PREPARING THE MARKETING MIX (7Ps)


  1. PRODUCT (OR SERVICE) - This element of the marketing mix indicates a description of the product or service that you are selling.But it is more than a mere description of their physical features

  2. PLACE-pertains to the distribution strategy of your business. It should provide convenience to the customers to buy your product or service as they need it. As such, it refers to the where, how, and when you are going to deliver the product or service to target customers based on their needs and preferences. 








  1. PRICE- marketing decision that combines market research with financial analysis. To be successful as an entrepreneur, you must establish prices for goods and services that will allow you to earn a profit margin

  • COSTS-You need to determine the costs directly related to your product or service

  • MARKUPS AND MARGINS-In some industries such as clothing, beauty products, or furniture, the entrepreneurs use a standard markup to price their products. As such, as a young entrepreneur, you need to research on the standard markup for products in specific industries by reading business publications or by asking suppliers. An example of a markup is 100% of the cost. In the case of an entrepreneur engaged in a retail business who wants to adopt that 100% markup rate, if he or she buys an item for P200 per unit, then the markup would be P200 and the final price to the consumer will be P400. Meanwhile, another way to price goods is by determining the expected margin (profit margin) adopted by entrepreneurs in selling the same product

  • PROFIT MARGIN-refers to the revenue earned after paying the cost of goods sold (COGS). It is calculated by the formula, revenue minus COGS, and the difference is shown as a percentage of revenue


Net profit margin = Net income Revenue × 100

  • COMPETITORS-An entrepreneur examines the price offered by the competitor and compares the quality or differentiating factors of his or her product versus the competitor. 


AS A STARTUP ENTREPRENEUR, YOU MAY CONSIDER SOME OF THE FOLLOWING PRICING STRATEGIES YO ADOPT:


  1. COST PLUS PRICING-This is also called mark-up pricing. Here, you add a specific mark-up to the cost to determine the selling price. 

  2. COMPETITIVE PRICING-This is offering prices similar to your competitors; it is also called benchmark pricing.

  3. BUNDLING-This is offering one or two products at a reduced price. In choosing a pricing strategy, you consider the situation of your costumers and also the moves of your competitor. The most important rule is as follows: do not price your product or service below its cost.


PRICE CEILING- is the most a customer will pay for your product or service. This is the customer's perception of what you have to offer, and, often, this amount has been set by the competition


PRICE FLOOR-pertains to your assessment of how much it costs you to produce your product or service


4. PROMOTION- element in the marketing mix enables the entrepreneur to inform potential consumers about the product's availability, or to educate the consumer about the product. Promotion uses advertising media. 



  • 3 OBJECTIVES OF PROMOTION:

  1.  provide basic information about the product or service (the location or how the product/service can be accessed, variety of product offerings, etc.).

  2. your target customers of the benefits of your product or service. Here, you describe the advantages or better features of your product (ease of use, durability, etc.)

  3. encourage customers to take action at specific times (for example, try out the product or service sample, give feedback, etc.).


5.  PEOPLE-This element in the marketing mix focuses on the role of human resources in propelling the growth of the business. As an entrepreneur, you need to ensure that your staff members are motivated and satisfied with their work to ensure that they will stay long in your company. If they are happy, they are likely to perform better in their jobs


6.  PACKAGING- This element also refers to how your product or service is presented to your customers in terms of its visual appeal. It is the general look of your product or the ambience of the service, which your customers or feel when they transact business with you. 

  • PRODUCT PACKAGING DESIGN-refers to the creati hat the exterior of a product that includes choices in terms of material, wrapping a box, a bottle, or a kind of container. Recently, there have been trends on making the packaging of products more environment friendly (e.g., using recycled or repurposed materials).


7.  POSITIONING-This marketing concept gives consideration to how your product or service offering is positioned in the minds of your target customers.  Positioning as a marketing strategy is actually embedded right from the beginning when you describe your target market because, at that early marketing stage, you already identified the preferences of your target customers.


THE 5 MAIN STRATEGIES UPON WHICH BUSINESSES CAN BASE THEIR POSITIONING ARE THE FOLLOWING:

  1. POSITIONING BASED ON PRODUCT CHARACTERISTICS- This associates the brand with a certain characteristic that is beneficial to the community.

  2. POSITIONING BASED ON PRICE-This aims to offer the cheapest or the most affordable product or service in the market. 

  3. POSITIONING BASED ON QUALITY OR LUXURY-This associates the brand with high quality or prestige such that the customer would desire it regardless of the price. 

  4. POSITIONING BASED ON PRODUCT USE OR APPLICATION-This emphasizes the particular use of the product. For example, meal replacement supplements target those who lack time to have a convenient meal.

  5. POSITIONING BASED ON COMPETITION-  This uses the competition as a reference point for differentiating the uniqueness of one's product or service. Or, it follows a similar benefits offered by the competitor with the aim of converting some customers of the competitor to one's business. 














 PROCESS-Refers to the standard procedures or systems involving internal marketing-related activities (back office support or marketing activities that are not seen by the customers) and external marketing- related activities (delivery, actual servicing of the customers).Process is important as it reflects how members of the enterprise effectively and efficiently follow the workflow of procedures


PROCESS IMPROVEMENT-is an effort taken by entrepreneurs to make core business processes better, leading to improved work output. Ideally, process improvement should lead to effective and efficient workflows. 


TO START YOUR PROCESS IMPROVEMENT, YOU CAN REFER TO THE FOLLOWING WAYS: 

  1. ELIMINATE WASTE-The Lean Principles call for teams to look for eight kinds of waste: defects, excess processing, overproduction, non-utilized talent, sitting inventory, products waiting for the next step, unnecessary moving of products, and inefficient movement of people. If you can eliminate waste in these areas, you can save time and produce quality results.

  2. REDUCE COSTS-also help eliminate waste and therefore increase efficiency by reducing costs. One way is to look for waste in the form of duplicate or unnecessary tasks. Another way is to look for opportunities to better allocate resources or automate manual tasks.


  1. IMPROVE COMMUNICATION AND COLLABORATION-This approach focuses on you, as the entrepreneur and leader, and your relationships with people. Lack of communication among members in an organization could lead to potential misperceptions and misinterpretations that could result in work errors, delays, and procrastination. 


BRANDING OR BRAND- is the name or symbol associated with the product or service offering that communicates messages to target customers. The brand message can be channeled through your advertising, distribution, and packaging. 


TRADEMARKS-are the registered brand's names, and they come in many forms. For instance, a trademark can be a distinctive word, phrase, logo, internet domain name, graphic symbol, slogan, or other device to identify the source of a product and distinguish the manufacturer's or merchant's product from others. 


THE FIELD OF ENTREPRENEURSHIP MAY BE CLASSIFIED INTO 2 TYPES: 

  1. COMMERCIAL ENTREPRENEURSHIP-refers to income-generating enterprises that emphasize profit generation

  2. SOCIAL ENTREPRENEURSHIP-pertains to income-generating enterprises that emphasize social impact to disadvantaged groups. 


Design thinking helps develop creativity among entrepreneurs. It is a thinking process commonly used by designers to solve certain problems related to products and services. 

THE PROCESS INVOLVES THE FOLLOWING STEPS:

  1. empathize with a person or a user

  2. define the problem

  3.  ideate or generate new 

  4. create a prototype of the solution

  5. test the prototype for feedback


IDENTIFYING BUSINESS OPPORTUNITIES CONSISTS OF 2 APPROACHES: 

  1. THE FINDING APPROACH- involves scanning the environment for existing trends and relies on available information to start up a business.

  2. BUILDING APPROACH- involves creating a business opportunity that is not yet existing, uses incomplete information, and requires more creativity.

BUSINESS OPPORTUNITY-must be viable and doable (achievable). Creating an opportunity attractiveness matrix is useful as a guide for screening business opportunities which considers the following criteria: alignment with personal values/interests/resources, market potential, operating potential, financial potential, threat from competitors, and unforeseen risks.


BUSINESS PLAN- is a strategic plan on how the entrepreneur is going to implement the chosen venture to make it successful.


DETAILED MARKETING STRATEGIES- pertain to the 7 Ps, or the marketing mix, which refers to product, place, price, promotion, people, packaging, and positioning. Each element in the marketing mix is carefully thought out.