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Chapter TenChapter TenChapter TenChapter Ten
Marketing for Small Business
Chapter FocusChapter FocusChapter FocusChapter Focus
• Describe the evolution of business philosophies
• Explain the need for market segmentation and its process
• Describe the “Black Box model” of consumer behavior
• Identify the five forms that a product can take
• Explore how “efficiencies” affect channels of distribution
• Outline how small businesses put together a promotion mix
• Identify the possible objectives of advertising
• List the seven steps in personal selling
The Black Box Model of The Black Box Model of Consumer BehaviorConsumer Behavior
The Black Box Model of The Black Box Model of Consumer BehaviorConsumer Behavior
STIMULISTIMULI TRANSFORMERTRANSFORMER RESPONSESRESPONSES
Fig. 10-1
Marketing Mix•Product•Place•PromotionOther•Demographic•Economic•Situational•Social•Lifestyle
Purchase•Product•Brand•Source•Amount•Method of paymentNo Purchase
Black Box(Buyer’s Mind)
Internal Influences•Beliefs/Attitudes Values•Learning•Motives/Needs•Perception•Personality•Lifestyle
Decision-Making Process•Problem solving•Information search•Alternate evaluation•Purchase•Postpurchase evaluation
Spectrum of Goods and ServicesSpectrum of Goods and ServicesSpectrum of Goods and ServicesSpectrum of Goods and Services
Fig. 10-2
TANGIBLEGOODS
INTANGIBLEGOODS
Furniture(assembled,not delivered)
Clothing
Automobile
FastFood
VacationPackage
FineDining
Advertising
Education
LawnMowing
Levels of ProductsLevels of ProductsLevels of ProductsLevels of Products
Fig. 10-3
Core
Generic
Augmented
Potential
Expected
The Channels of DistributionThe Channels of DistributionThe Channels of DistributionThe Channels of Distribution
Originators(producers of raw materials, farmers,
miners, fisheries, foresters, etc.)
Originators(producers of raw materials, farmers,
miners, fisheries, foresters, etc.)
WholesalersWholesalers
ManufacturersManufacturers
AgentsAgents
Merchant wholesalersMerchant wholesalers
RetailersRetailers
ConsumersConsumersFig. 10-4
Direct Channel
Indirect Channel
Ad Dollars Spent by Business Type Ad Dollars Spent by Business Type (1 of 3)(1 of 3)Ad Dollars Spent by Business Type Ad Dollars Spent by Business Type (1 of 3)(1 of 3)
INDUSTRY
1.51.82.99.50.92.96.90.75.71.2
10.95.05.1
Table 10-1a
AD DOLLARS ASPERCENT OF SALES
Air cond, heating, refrig equipAir transport, scheduledApparel and other finished productsBeveragesBolt nut screw rivets washersBottled and canned soft drinks, waterCan/frozen preserved, fruit, vegCarpets and rugsCatalog, mail-order housesComputer and office equipmentCutlery hand tools, general hardwareEducational servicesElectronic computers
Ad Dollars Spent by Business Type Ad Dollars Spent by Business Type (2 of 3)(2 of 3)Ad Dollars Spent by Business Type Ad Dollars Spent by Business Type (2 of 3)(2 of 3)
INDUSTRY
14.21.51.35.35.0
16.58.61.24.01.8
11.013.010.4
Table 10-1b
AD DOLLARS ASPERCENT OF SALES
Games, toys, child vehicles except dollsGroceries and related products - wholesaleGrocery storesGuided missiles and space vehiclesHospitalsIndustrial inorganic chemicalsInvestment adviceIron and steel foundriesLawn, garden tractors, equipmentLumber and other building materials - retailMembership sport and rec clubsMotion picture, videotape distributorsPerfume, cosmetic
Ad Dollars Spent by Business Type Ad Dollars Spent by Business Type (3 of 3)(3 of 3)Ad Dollars Spent by Business Type Ad Dollars Spent by Business Type (3 of 3)(3 of 3)
INDUSTRY
8.34.85.35.83.1
10.62.7
Table 10-1c
AD DOLLARS ASPERCENT OF SALES
Phono records, audio tape discPrepackaged softwareRadio, TV consumer electronic storesRetail stores, allSecurity brokers and dealersSugar and confectionary productsWomen’s clothing stores
The Relationship Between Marketing The Relationship Between Marketing and Public Relationsand Public Relations
The Relationship Between Marketing The Relationship Between Marketing and Public Relationsand Public Relations
TARGET
Table 10-2
PR ACTIVITIES
Customers
Employees
Suppliers
General Public
Government
BENEFITS TO MARKETING
Press releasesEvent sponsorship
NewslettersSocial activities
Articles in trade pubs.Promo incentives
News releasesPlant toursSupport for comm. activitiesLobbyingDirect mailPersonal calls
Increase name awarenessIncrease credibility
Improve comm. to decrease absenteeism and product defectsIncrease moraleImprove imageImprove delivery schedule
Attract better employeesImprove image to customersImprove local relations
Favorable legislationLess regulation
Short-term Ratchet Effect on Sales Short-term Ratchet Effect on Sales PromotionPromotion
Short-term Ratchet Effect on Sales Short-term Ratchet Effect on Sales PromotionPromotion
AdvertisingPersonal Selling
AdvertisingPersonal Selling
Sales Pro
motion
Sales Pro
motion
Sales
Fig. 10-5
MARKETING MIXMARKETING MIXMARKETING MIXMARKETING MIX
• Product
• Price
• Place
• Promotion
MARKETINGMARKETINGADVERTISING MEDIAADVERTISING MEDIA
MARKETINGMARKETINGADVERTISING MEDIAADVERTISING MEDIA
• Newspaper
• Television
• Direct mail
• Radio
• Magazines
• Outdoor
• Yellow Pages
• WWW
MARKETINGMARKETINGNewspaper Advantages vs. DisadvantagesNewspaper Advantages vs. Disadvantages
MARKETINGMARKETINGNewspaper Advantages vs. DisadvantagesNewspaper Advantages vs. Disadvantages
• Advantages– Covers trade area
– Timely
– Adaptable
– Can save
– Can use illustrations
• Disadvantages– Short life
– Ad missed by skimmers
– Expensive in big papers
– Low pass-through value
MARKETINGMARKETINGTelevision Advantages vs. DisadvantagesTelevision Advantages vs. Disadvantages
MARKETINGMARKETINGTelevision Advantages vs. DisadvantagesTelevision Advantages vs. Disadvantages
• Advantages– Reaches large
audiences
– Combines, sight, sound and motion
– Perceived to be prestige medium
• Disadvantages– Very expensive
– Ad clutter
– Short exposure time
MARKETINGMARKETINGDirect Mail Advantages vs. DisadvantagesDirect Mail Advantages vs. Disadvantages
MARKETINGMARKETINGDirect Mail Advantages vs. DisadvantagesDirect Mail Advantages vs. Disadvantages
• Advantages– Can be precisely
targeted
– Message can be personalized
– Less space limitations than other media
• Disadvantages– Perceived as “junk
mail”
– Postage can be high
– Mailing lists can be expensive and inaccurate
MARKETINGMARKETINGRadio Advantages vs. DisadvantagesRadio Advantages vs. Disadvantages
MARKETINGMARKETINGRadio Advantages vs. DisadvantagesRadio Advantages vs. Disadvantages
• Advantages– Can be targeted to
specific audiences
– Low relative costs
– Short lead time
• Disadvantages– Message is fleeting
– Must be repeated to gain benefits
– Hard to grasp complete message
MARKETINGMARKETINGMagazine Advantages vs. DisadvantagesMagazine Advantages vs. Disadvantages
MARKETINGMARKETINGMagazine Advantages vs. DisadvantagesMagazine Advantages vs. Disadvantages
• Advantages– Can target
geographically and demographically
– Long life, high pass through
– High quality photos and graphics
• Disadvantages– Long lead time
– No guarantee of ad placement
– Higher relative cost than other media
MARKETINGMARKETINGOutdoor Advantages vs. DisadvantagesOutdoor Advantages vs. Disadvantages
MARKETINGMARKETINGOutdoor Advantages vs. DisadvantagesOutdoor Advantages vs. Disadvantages
• Advantages– High repeat exposure
– Low cost
– Little competition
– Can appeal to transient traffic
• Disadvantages– Limited message due
to long placement time
– Not timely
– Good sites hard to find
– Affected by adverse weather
MARKETINGMARKETINGYellow Pages Advantages vs. DisadvantagesYellow Pages Advantages vs. Disadvantages
MARKETINGMARKETINGYellow Pages Advantages vs. DisadvantagesYellow Pages Advantages vs. Disadvantages
• Advantages– Wide distribution
– Viewers are likely to be interested buyers
– Easy to measure ad effectiveness
– Especially good for services
• Disadvantages– Competitors are listed
in same place
– Not timely
– May need big ad to be noticed
– Fairly expensive
MARKETINGMARKETINGWWW Advantages vs. DisadvantagesWWW Advantages vs. Disadvantages
MARKETINGMARKETINGWWW Advantages vs. DisadvantagesWWW Advantages vs. Disadvantages
• Advantages– Can reach huge market
– Can display color, sound and motion
– Can explain benefits and features
– Can communicate immediately to order or get more information
• Disadvantages– Hard to get noticed,
must come to front of search engines
– Many people still not on-line
– Must update frequently
