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Entrepreneurship MGT602

Lesson 26

THE MARKETING MIX

The actual short-term marketing decisions in the marketing plan will consist of four important marketing

variables, called the marketing mix:

1. Product or service.

2. Pricing.

3. Distribution.

4. Promotion.

Each variable should be described in detail in the strategy section of the marketing plan.

STEPS IN PREPARING THE MARKETING PLAN

Step 1: Defining the Business Situation

The situation analysis is a review of where the company has been and considers many of the

environmental factors. The entrepreneur should provide a review of past performance of the product and

the company. Industry analysis should include information on market size, growth rate, suppliers, new

entries, and economic conditions.

Step 2: Defining Target Market/Opportunities and Threats

The entrepreneur should have a good idea of who the customer or target market will be. The defined

target market will usually represent one or more segments of the entire market. Market segmentation is

the process of dividing the market into smaller homogeneous groups.. The process of segmenting is:

Decide what general market or industry you wish to pursue.

b. Divide the market into smaller groups based on characteristics of the customer.

Select segment or segments to target.

d. Develop marketing plan integrating the parts of the marketing mix.

Step 3: Considering Strengths and Weaknesses

It is important for the entrepreneur to consider its strengths and weaknesses.

Step 4: Establishing Goals and Objectives

Before strategy decisions can be outlined, the entrepreneur must establish realistic marketing goals and

objectives. These answer the question "Where do we want to go?" These goals should specify such things

as market share, profit, sales, market penetration, pricing policy, and advertising support. Not all goals and

objectives must be quantified. It is a good idea to limit the number of goals to between six and eight.

Step 5: Defining Marketing Strategy and Action Programs

Strategy and action decisions respond to the question "How do we get there?" It incorporates:

1. Product or Service

This includes a description of the product and may include more than the physical characteristics.

It involves packaging, brand name, price, warranty, image, service, features, and style.

2. Customer Service

Meeting customer needs and creating loyalty involves a number of low-cost steps:

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Entrepreneurship MGT602

In writing develop a statement of customer service principles.

Train those employees who have direct contact with customers.

Establish a process for evaluating customer service.

Reward employees who are most effective in providing quality customer service.

Make regular contact with customers.

Invest in quality telephone equipment.

Meet customer expectations.

Customer service is especially important for e-businesses.

3. Pricing.

One of the difficult decisions is determining the appropriate price for the product. Factors such as

costs, discounts, freight, and markups must be considered. Marketing research can help determine

a reasonable price that consumers are willing to pay.

4. Distribution.

This factor provides utility or makes the product convenient to purchase when it is needed. This

variable must be consistent with other marketing mix variables. Type of channel, number of

intermediaries and location of members should be described. Regardless of the type of business, it

is usually necessary for the new venture to have a website. The Internet will become an increasingly

important medium for information and distribution. Direct mail or telemarketing may be

considered. Direct mail marketing is one of the simplest and lowest in entry costs. But the direct-

marketing or Internet strategies are not a guarantee for success.

The entrepreneur should evaluate all possible options for distribution.

5. Promotion.

The entrepreneur needs to inform customers as to the product's availability using advertising

media such as print, radio, or television. Usually television is too expensive unless cable television

is a viable option. Larger markets can be reached using direct mail, trade magazines, or

newspapers. A website may also create awareness and promote the product and services of the

venture. It is possible to make use of publicity as a means of introduction. It is important that the

marketing strategy and action programs be specific and detailed enough to guide the entrepreneur

through the first year.

Step 6: Coordination of the Planning Process

The management team must coordinate the planning process. The entrepreneur may be the only person

involved but may lack experience in preparing the plan. Assistance is available from many sources, such as

the SBA.

.Step 7: Designing Responsibility for Implementation

The plan must be implemented effectively to meet all of the desired goals and objectives. Someone must

take the responsibility for implementing each decision made in the marketing plan.

Step 8: Budgeting the Marketing Strategy

Planning decisions must also consider the costs involved in the implementation of these decisions. This

budgeting will be useful in preparing the financial plan.

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Entrepreneurship MGT602

Step 9: Implementation of the Marketing Plan

The marketing plan is meant to be a commitment to a specific strategy. A commitment to make

adjustments as needed by market conditions is also valuable.

Step 10: Monitoring Progress of Marketing Actions

Monitoring of the plan involves tracking specific results of the marketing effort. What is monitored is

dependent on the specific goals and objectives outlined.