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Permanent Link: http://ufdc.ufl.edu/IR00002527/00001
 Material Information
Title: Marketing
Physical Description: Fact sheet
Creator: Torres, Nayda I.
Publisher: University of Florida Cooperative Extension Service, Institute of Food and Agriculture Sciences, EDIS
Place of Publication: Gainesville, Fla.
Publication Date: 1991
 Notes
Acquisition: Collected for University of Florida's Institutional Repository by the UFIR Self-Submittal tool. Submitted by Melanie Mercer.
Publication Status: Published
General Note: "Publication date: November 1991."
General Note: "HE 7113"
 Record Information
Source Institution: University of Florida Institutional Repository
Holding Location: University of Florida
Rights Management: All rights reserved by the submitter.
System ID: IR00002527:00001


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FactSheetHE7113 TheInstituteofFoodandAgriculturalSciencesisanequalopportunity/affirmativeactionemployerauthorizedtoprovideresearch,educational informationandotherservicesonlytoindividualsandinstitutionsthatfunctionwithoutregardtorace,color,sex,age,handicap,ornational origin.Forinformationonobtainingotherextensionpublications,contactyourcountyCooperativeExtensionServiceoffice. FloridaCooperativeExtensionService/InstituteofFoodandAgriculturalSciences/UniversityofFlorida/JohnT.Woeste,DeanMarketing1 AdaptedbyNaydaI.TorresandGlennD.Israel2Nothinghappensuntilyoumakeasale!Allthe plansbusinessesmakearedirectedatorarein supportofthesingleactofcompletingasale.Some peopleviewthemarketingfunctionofabusinessonly assellingpresentingthegoodsorservicestothe customer.However,marketinginvolvesmuchmore. Marketingisaverycomplexprocessthatincludes allthestepsinvolvedindeterminingwhatyour customerwants,andthensupplyingthegoodsor servicesnecessarytosatisfythecustomerataprice thatwillensureaprofittopayyouforyourefforts. Todevelopyourmarketingplanyouneedto answerthesequestions: Whatexactlyareyouselling? Whoisbuyingit? Whywilltheybuyit?(Whatspecificneeddoes yourproductorservicesatisfy?) Howmuchdoyouexpecttosellwithinagiven time? Howmuchwillyoucharge? Whoisyourcompetition? Howdoyouintendtobeatyourcompetition? Thefourelementsofmarketingstrategyare knownasthefour"P's"product,price,placeand promotion: Product (service)Youmustknowtheproduct orserviceyouareofferingthoroughly.Thereare anumberofdecisionsyoumustmake:Howdoes yourproductdifferfromcompetitors?Howwill itbepackaged?Willyoubeofferingoneproduct orahostofproducts?Whowillbuyit?Whatis therepeatpurchasepotential?etc. Price Pricingstrategyisdeterminedbythe qualityoftheproductorservice,thedesired imageoryourbusiness,businessexpenses,prices ofcompetitiveproducts,natureofdemand,how muchyourproductorserviceisworthandhow muchpeoplearewillingtopay. Place Referstogettingtheproductfromplace toplace(fromproducertoconsumer).Itinvolves usingcertaindistributionandsellingmethods. Promotion Thekeyelementintelling customersthatyourproductexistsandwhythey shouldbuyit.USEMARKETRESEARCHBeforelaunchingfullforceintotheproductionof goodsandservices,determineifamarketexistsand fromwherethegreatestpotentialsalesarelikelyto 1.ThisdocumentisFactSheetHE7113,aseriesoftheHomeEconomicsDepartment,FloridaCooperativeExtensionService,InstituteofFood andAgriculturalSciences,UniversityofFlorida.Publicationdate:November1991. 2.NaydaI.Torres,AssociateProfessorandFamilyandConsumerEconomicsSpecialist,andGlennD.Israel,AssociateProfessorandProgram andEvaluationSpecialist,CooperativeExtensionService,InstituteofFoodandAgriculturalSciences,UniversityofFlorida,GainesvilleFL 32611.

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Marketing Page2come.Therewillhavetobeenoughdemandto stimulatesalesandgenerateincome. Bothinformalandformalmarketresearchcanbe usedtogiveyoumoreinformationabouttarget markets,competitionandtrends.Herearesome ways: Brainstormideaswithfriendsandfamily. Checkthetelephonebookforareacompetitors. Marktheirlocationonamap.Studytheir location,products,servicesandbusinesspractices. Visitthelibrarytoresearchproductandmarket trends. Usetradepublications,industrydirectories,and U.S.DepartmentofCommercegeneralmarket indices.TheEncyclopediaofAssociationswill helpyouidentifytradeassociations.Dun& BradstreetandRobertMorrisAssociatesalso havehelpfulpublications. CensusofBusiness,publishedeveryfiveyearsby theU.S.BureauofCensus,providesinformation onretail,wholesaleandselectedservice industries.Theinformationisbycounty,cityand centralbusinessdistricts.Theyalsopublish StatisticalAbstractoftheUnitedStates,and CountyandCityDataBookwhichincludemany consumerstatisticsbystate,countyandcity. Offerafreetrialperiodtoasmall"focusgroup." Askfortheirlikesanddislikes,whattheywould bewillingtopayandwouldtheybewillingto purchasesuchaproductorservice.IDENTIFYYOURTARGETMARKETAtargetmarketisasegmentofthemarketa businessfeelsitcanservemosteffectivelyand profitably.Noteveryonewillbeinterestedinyour productorservice;therefore,youwillwanttotarget aspecificsetofcustomers.Usetheworksheetin Table1 toidentifyyourtargetmarket.

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Marketing Page3 Table1. YOURTARGETMARKET BasisForSegmentationYourTargetMarketCharacteristicsSex-Isyourproductorserviceusedorpurchasedbyone sex,orisitpurchasedbyonesexandusedbytheother suchasgiftitemsorwhenonepersonbuysgroceriesfora wholefamily? Age-Doyouappealtoaparticularagegroup?Ifso,how canyouchangeyourproductormarketingapproachto reachawideragespan? Education-Doyouhavespecialappealtopeopleat differentlevelsofeducationalattainment?Canyousellto orthroughschools? Occupation-Dosomepeoplehaveaspecialoragreater needforyourproductorservice?Canithelpthem advancetheircareer?Dotheirjobbetter? Income-Isthepricesuchthatonlysomepeoplecan affordyourproduct?Doesithavesnobappeal? GeographicLocation-Wheredoyourprospectsand customersliveandhowcanyoulocatemorepeoplelike them?Isyourtradeareathecity?county?area?state? theSoutheast? HomeOwnershipvsRental-Peoplewhoownhomeshave vastlydifferentconsumptionpatternsthanrentersinboth thethingsthattheybuyandthewaythattheybuythem. MaritalStatus-Singlesbuyverydifferentlythanmarried peopledo. SizeofFamilyUnit-Familysizemayaffectthesizeand frequencyofthepurchaseandthenumberofpeoplewho mustbesoldonaparticularbrandorselection. EthnicorReligiousBackground-Howdoesyourproduct orservicemeetparticularneedsandmoreimportant,canit besoldtodifferentgroupsorthegeneralpublic? Lifestyle-Howpeopleliveandspendtheirmoneyis usuallymoreimportanttothemarketingpersonthanhow muchtheyhaveorhowtheygotit.Peoplemoveingroups andoftenconsumeinamannerthatisacceptabletothe groupnorm. PhysicalCharacteristics-Istheproductorservicebetter suitedforthetall,short,thin,orlargeindividual?Willyou productenablethemtodosomethingtheycouldnotdo otherwise?

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Marketing Page4DEFINEYOURCOMPETITIVEEDGETheideabehindestablishingacompetitiveedge Table2. Whatisyourproductorservice?Howisitlike,differentfromandbetterthansimilarproductsandservices? ProductOrService WaysInWhich SimilartoOthers WaysInWhich DifferentorUnique istogenerateloyalclienteleandrepeatcustomersby offeringsomethinguniqueorbetterthanwhatthe competitionhastooffer.Afterall,youmustprovide anincentiveforthecustomertovisityouvs.the "friendly"competition.Youcandevelopormaintain yourcompetitivesituationinanumberofways. Betterservices Competitiveprices Appealtospecificneedsandwants Uniquepackaging Higherproductquality Product/servicedifferentiation Specialbenefits Distinctiveimage Excitingpromotions Knowyourmajorcompetitors.Identifyyour strengthsandweaknessestohelpdevelopyour marketingstrategy.Itiswisetocomparethe characteristicsofyourcompetitionwithyourbusiness. Comparetheprice,quality,varietyandguarantees oftheproductsorservicesoffered.Lookcloselyat theattentiongiventocustomers,includinganyspecial services,expertadviceandreliabilityingeneral. Determineifcreditcardswouldgiveanadvantage. Youshouldalsolookatthelocationofthebusiness andtheimagethatitprojects.Comparebusiness hourstodetermineiftheyincreasevolumeornumber ofpotentialcustomers.Anddonotforgettolookat advertisingcampaigns. Analyzethecompetitionallthetime!Besureof yourmarketpositionbyknowingwhatyour competitorsaredoingbybeinginformedoftheir products,pricesandservices. TheComparisonChartin Table2 andthe CompetitionChecklistin Table4 willhelpyouquickly compareyourbusinesstoothers.SELECTSELLINGMETHODSIfyouhaveaproductbusiness,youwillhave severaloptionsfordistribution.

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Marketing Page5Wholesaling sellingtoaretailerwhointurn sellstothecustomer.Productsaresoldat wholesalepricestowhichtheretaileraddsa markup. homebusiness---->retailer---->customer Retailing sellingtheproducttothecustomer directly.Thismaybedonethroughcraftfairs, fleamarkets,openhouses,partyplanmethods, etc. homebusiness---->customer ManufacturersRepresentative anagentwho representssimilarproductlinesofdifferent businessesandreceivesacommissionforwhatis sold.Awaytohaveyourproductintroducedinto newterritories. homebusiness---->manufacturers representative---->stores---->customer Consignment sellinggoodsthroughasmall retailer.Youremaintheownerofallconsigned goodsandreceivepaymentaftertheyhavebeen sold. homebusiness---->consignmentshop----> customer Thinkthrougheachofthesesellingoptions. Whichone(s)isbestforyourproduct?Youmight usemorethanone.Besuretoestablishtheinventory necessaryandtheproductiondeadlinesyoumust meetforeachmethod.DEVELOPYOURPROMOTIONALSTRATEGYPartofdevelopingamarketingstrategyincludes decidinghowbesttopromoteoradvertiseyour productorservice.Setasidesomemoneyfor promotion.Youmayhaveanexcellentserviceto offeroradesirableproductatanattractiveprice,but ifnooneknowsaboutitwhatgoodwillitdoyou? Wordofmouthalonemaynotbeenoughtoattract thenumberofcustomersyouwillneedtomakethe businessgo.Tomaximizethepaybackonyour advertisingdollars,determineyourtargetmarket, selecttherightadvertisingmediumsanddevelopa sellingmessagethatwillattractreadersandconvince themthattheyneedyourproductorservice. Remember,too,thatyourpromotionalstrategy shouldnotonlymakepotentialcustomersawareof yourbusiness,itshouldalsohelpdevelopadistinctive imageforyourproductorservice,helpdifferentiate itfromcompetitionandconvincecustomersyour productorserviceisworthbuying. Formostpeoplewhoarejustbeginningahome business,wordofmouthisthebestadvertising possible.Thisisespeciallytrueifthebusinessisan outgrowthorexpansionofskillsandtalentsyouare alreadyusing.Forexample,apersonwhoraises flowersandvegetablesmightdecidetosellextra beddingplantsandrootedcuttings.Apersonthat sewswellforfamilymembersmightdecidetosewfor profitforthepublic. Asyourhomebusinessexpands,itbecomes necessarytoadvertisethroughavarietyofmedias. Selectthemediathatwillreachthegreatestnumber ofprospectivecustomersinyourtradingareaatthe lowestcost.Baseyouradvertisingstrategyuponthe imagethatyouaretryingtocreateandemphasize yourstrongestpoints(prices,quality,variety,etc.) Inmakingyourdecisionconcerningadvertising andpromotionalmethods,considerwhetherthe additionalsaleswillmorethancompensateforthe promotionalcost.Givespecialattentiontohow effectivetheadvertisingorpromotionalmethodwill beinreachingtheparticularsegmentsofthe populationtowhichyouaremakingthegreatest appeal. Herearesomeadvertisingsuggestionsthatmay besuitabletoyoursituation: Localnewspaper Reachesalargelocal audienceandcanbecosteffective.Displayor classifiedadsaretwoeffectiveoptionsforhomebasedbusinesses. Catalogs Moreexpensivesinceartwork, typesetting,photography,paper,andpostagecan affectcatalogcosts.However,theycanreachthe specificmarketaudienceyouhavetargeted. Brochures Effective,cost-efficientmediumfor smallbusinesses.Brochurescanbedistributedby ChamberofCommerce,communitycenters,etc. ormaileddirectlytoyourtargetcustomer.

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Marketing Page6Flyers Inexpensivetoproduce.Distributein placestoreachyourtargetmarket.Itis importanttocontroldistributiontopreventlitter. CableTV AlthoughTVingeneralwill probablybeoutofthereachofmostsmall businesses,checkcableTVratesinyour community.CableTVcanreachalargedaytime andeveningaudience.Stationsshouldbeableto giveyouasynopsisofwhotheirviewersare. Radio Canbecosteffectivegiventhenumber ofpeopleitcanreach.Checkwiththeradio stationtodetermineiftheiraudienceisthetype youwouldliketoattract. Magazines Moreexpensivethannewspaperor radio.Reviewthedemographicsofthe magazine'sreaders.Nationalmagazinesmaynot beappropriateorfeasibleforsmallbusinesses, butyoumightconsidercityorregionalmagazines. Alsocheckmagazinesthathaveasmall circulationtoaveryspecificinterestgroup,but makesurethisgroupisyourtargetmarket. YellowPages Notallbusinessesfindthe YellowPagesaneffectivewaytoadvertise. Advertisingratesarenotcheap.Youmust determineifthismethodofadvertisingwillhelp generatecustomers.Certaintypesofservice businessesfindthismethodeffectivewhen customersmustseekoutaparticulartypeof servicesuchashousecleaning. BusinessCardsandStationary Amustforall businessesandaninexpensivewaytopromote yourname.Theseconveyanairof professionalismtocustomers,suppliers, distributorsandothersandshowthatyoutake yourbusinessseriously. SpecialPromotions Toattractinterestatlow costconsiderpromotionssuchas"twoforone," freetrialoffersandraffles.Alsogivethoughtto offeringfamily,studentandseniorcitizen discountrates. SpecialEvents Participateinlocaleventssuch ascraftfairs,festivals,homeshows,sidewalksales orbusinessexpos.Attendstateorregionaltrade shows.Youcanusethispromotionalmethod withbrochures,flyersorotheradvertizingmeans. UsetheAdvertisingExpenseSchedulein Table3 toevaluateyourannualadvertisingandpromotional programalongwithestimatedcosts.Onceyouhave anestimateoftotaladvertisingandpromotional expenses,calculatethepercentagewiththeaverage forthebusinesstobesurethatitisnotoutofline. Figuresareusuallyavailablefromotherbusinesses, tradeassociationsorsuppliers.Advertisingexpenses ofonetofivepercentarenotexcessiveformost businesses.REMEMBEREvaluateyourmarketingplanscontinually.Stay awareofyourproductanditsappealtoyourmarket segment.Changesinfashion,transportation,political environment,generaleconomictrends,andyour competitionwillincreaseordecreaseyourmarket potential.Achangeinyourproductmaybeneeded tokeeporincreaseyourmarket.Itcouldbeonly color,size,packaging,ortheadditionofacompanion product.SOURCESGibbs,JanettA.andThomas,William. Home Business.CooperativeExtensionService, UniversityofGeorgia. Rowe,BarbaraR.andBentley,MarionT. AHome BasedBusinessWorkshop:MappingYour MarketingStrategy.CooperativeExtension Service,UtahStateUniversity,1987. Rice,FrederickH. StartingAHomeBasedBusiness, 3rdedition.SmallBusinessDevelopmentCenter, KansasStateUniversity,1986. Duffy,MargaretA. TurnTalentIntoDollarsThrough HomeBasedBusiness--ASelfStudyManual. PublicationSP153.CooperativeExtensionService, UniversityofMassachusetts.

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Marketing Page7 Table3. ADVERTISINGEXPENSESCHEDULE Advertising Media Annual Frequency ofUse X CostEach Time = Annual Estimated Cost Radio $ $ Newspaper Brochures BusinessCards TotalAnnual Advertising Cost $ Promotional Method Annual Frequency ofUse X CostEach Time = Annual Estimated Cost Sales $ $ LossLeaders Give-aways TotalAnnual Advertising Cost $ (1)Totalannualadvertisingandpromotionalcost $ (2)Estimatedannualsales $ Advertisingandpromotionalcostasapercentageofsales: (1)Totalannualcostdividedby(2)estimatedannualsales.

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Marketing Page8 COMPETITIONCHECKLIST MySituation Competitor Competitor Competitor Good Average Poor Better Equal Worse Better Equal Worse Better Equal Worse Prices Quality ProductSelection CustomerAttention SpecialService(s) Reliability ExpertAdvice Guarantees CreditCards Location BusinessHours BusinessImage Advertising Other Table4.