Explain the fundamentals of marketing in a small business

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					D. Marketing a Small Business
    6.00 Explain the fundamentals of
      marketing in a small business.



        6.02 Explain market
           identification.
           Marketing Concepts
   Market: The group of
    potential customers
    who have similar
    needs/wants,
    sufficient buying
    power, and the
    willingness to give up
    a portion of that
    buying power in order
    to buy your
    product/service.
Marketing Concepts

            Market
             Segmentation:
             Dividing the total
             market into smaller,
             well-defined groups
             with similar wants/
             needs and similar
             key characteristics.
           Marketing Concepts

   Target Marketing:
    Identifying market
    segments with the
    greatest potential for
    sales and focusing
    marketing decisions
    on satisfying the
    individuals that make
    up these segments.
         Marketing Concepts

   Target Market:
    The group or
    groups of
    potential
    customers
    identified as
    most likely to
    patronize the
    business and buy
    its products.
Market Segmentation

             Geographic
              segmentation:
              Dividing markets by
              where customers
              are located.
                 North or South
                 Rural or Urban
                 City or Suburbs
                 Mild/harsh Climate
           Market Segmentation
   Demographic
    segmentation: Dividing
    markets by
    characteristics people
    have in common.
       Age
       Income
       Education
       Occupation
       Ethnic background
       Life stage
Market Segmentation

           Psychographic
            segmentation:
            Dividing markets by
            identifying common
            interests, attitudes,
            values, lifestyle, or
            personality traits
            among the individuals
            that constitute the
            market.
          Market Segmentation
   Behavioral
    segmentation:
    Dividing markets by
    identifying common
    responses to
    products and
    product features.
       Rate of use
       Occasion response
       Loyalty response
       Benefits derived
           Characteristics of a
            Market Segment
   Measurable: Potential sales income must be
    measurable.
   Substantial: Potential sales income must be
    substantial enough to warrant the investment
    required to reach the segment.
   Reachable: Individuals in the segment must
    be reachable with available promotional tools.
   Responsive: The likelihood of the segment
    responding positively to promotional efforts
    must by high enough to warrant the
    investment.
   Market potential: The total amount of
    revenue that can potentially be generated in
    a specific industry or market.
   Market share: The percentage of the total
    sales revenue captured by a firm within a
    market or industry.
   Market position: The perceived standing of a
    firm or a product in the minds of customers
    as compared to the competition.
        Positioning Strategies
   Play to the           Regardless of the
    competition’s          strategy, a company
    weaknesses.            must focus efforts
                           on communicating
   Lead with your         its position to its
    strengths.             target market.
   Look for              It is in the best
    underserved            interest of an
    markets.               organization to plan
   Target different       its position in the
    market segments.       market.
    Average Market Share


   Total sales
volume/number
 of competitors
    in a given
     market.
           Competition Analysis
   When developing a competition analysis
    for your business plan consider:
       Who are your 5 nearest direct competitors?
       Who are your indirect competitors?
       How are their businesses performing?
       What have you learned from their
        operations and advertising?
       What are their strengths and weaknesses?
       How does their product/service differ from
        yours?

				
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