More Rich Dad. Poor Dad by bmd18385

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									More Rich Dad. Poor Dad.
          Mkt 443
         Prof. White
          Class 4
Why and How Should You Work,
 Invest, or Own a Business?
Buying/creating assets to increase your passive
income to support your desired lifestyle.
Arranging your work schedule to match desired
Increasing your ability to create income at will.
Doing something that genuinely interests you, and
allows you to reject jobs and opportunities that don’t.
Dealing with people you only want to deal with.
Feeling/being free of any pressure, other than self-
Not caring about what others think of you.
      Who Gets Paid First?
      Who Gets Paid Most?
 Investors – The Bank – Business Owner(s)
          – The Asset – Employees

Paid Last    Business Owner(s) Paid Most
                The Bank
Paid First      The Asset      Paid Least
        Dealing with Your Money
“Many people are good when it comes to making their money,
       but are foolish when spending it.” – Rich Dad

5. Exit: Get back original investment
4. Protect: Guard against taxes, crooks, & lawsuits    Financial
3. Leverage: How much other people’s time, $, ideas
2. Manage: How to analyze, budget, and forecast
                                           Academic, and
1. Earn/create: How to make money          professional education
      Leverage Defined
Leverage is the ability:
 To do more and more
 With less and less
 Of your own, personal resources.

The goal is to become a Powerful Invalid.

   P     O
   T     P    O
         M    P      O
              I      P        O
                     E        P            Your
                              W         Good Biz or
All you need is a good idea
and the commitment to see
it through. Everything else
can be begged, borrowed,          You
or stolen.
              Real Estate Leverage
             Joe Cash                                   Mike Leverage
   Value                       Appreciation                              Value
   $105K                         Profit                                 $105K
               $5K                                           $5K
   $100K                                   Down                         $100K
                                         Pay Invest
 $100K                                                      $90K
All Cash     Free and

          $5K Profit = 5% ROI                       $5K Profit = 50% ROI
       $100K Investment                          $10K Investment
                        Modified from Robert G. Allen
Media: Finding Your Niche
 Who Is Your Perfect Customer?

Perfect Customers are:
   Affluent Addicts
   with Big Mouths
   who Love You to Death!

And, “You only deal with those Perfect
 Customers who want to deal with you.”
So, “Leave a trail where those Perfect
 Customers can find you.”
      Customer-First Business Model


Pre-Defined             Select               Decide                Make
Customers               Media               Message           Product/Brand
What’s my          Which ponds have         What bait are      Start fishing.
favorite fish?     my favorite fish?        my fish eating?
What’s my          Find Big, Addicted       Find a Competitive
Niche?             fish--high probability   Advantage.
Am I passionate?   prospects.
Do I have                                                      Database
                                                               Stock your
                                                               Private Pond
       Media-First Business Model
            “Let’s Find the Fish.”

Pre-Defined           My                 Decide               Make
   Media      =    Prospects            Message          Product/Brand

     Pick ponds with my Perfect, Affluent, bait are
                                       What               Start fishing.
                                       my fish eating?
     Addicted fish?                    Find a Competitive
     This is my Niche.                 Advantage.
     I am passionate.                                       Build
     I have expertise.
                                                          Stock your
                                                          Private Pond
                About Niches
Business Definition: A special, narrow area of demand
for a product or service.
   You can create specifically tailored products.
   You get fast awareness among niche members.
   It’s easier and cheaper to prospect customers.
All you need is 10,000 names in your database/
mailing list.
   Then you’ll make $500/day by selling just 25 units/day with a
    $20 profit margin.
   25 units/day divided by 10,000 names equals just a .25%
    response rate.
   $500/day times 300 days equals $150,000/year.
Evaluating Possible Niche(s)
 Does the niche address one or more of my passions,
 talents, values, and/or my destiny?
 Can I easily and affordably contact my niche?
 Can the niche afford the product or service?
 Does the niche already buy the product or service?
 Do I have experience and credentials with the niche?
 Does the niche have serious problems to be solved?
 Is there excessive competition in the niche?
 Do I have a competitive advantage that’s important
 to the niche?
 Is the niche large enough to make my desired profit?
      Finding Your Niche(s)
Standard Rates and Data Service (SRDS)
   List of mailing lists, publications, radio, and TV
Media Directories
; Oxbridge Communications; Gibbie Press
Mailing list brokers
Compile your own list
   Sweepstakes and giveaways to capture names
   Electronic copy of the Yellow Pages
Organization and association memberships
Niche radio and cable TV stations/programs
Internet forums, chat rooms, and blogs
Joint venture partners
Your current and past customer lists, warranty cards,
sales/service records, inquiries, etc.
Creating a Powerful
  Marketing Plan
   A Guerrilla/Small Business
        Marketing Plan
Understands the business environment in which
the business operates.
Pinpoints the specific target markets/niches the
company will serve.
Analyzes a firm’s competitive advantages and
builds a marketing strategy around them.
Creates a marketing mix that meets customer
needs and wants.
       The Marketing Mix
                   Step One
The Target Market -- Needs, Wants, Expectations

                   Step Two
          The Positioning -- The Story
        Brand Image & Competitive Advantage

                    Step Three
                    “The 4 P’s”
    Product ---- Price ---- Place ---- Promotion
         Grow Your Brand
Your Brand is Your “Body of Work.”
 Your products.
 Your service.
 Your reputation: Word of Mouth
 Your people and partners.
 Your promotion.
      Advertising
      Slogan

   Your charity
        Public relations
    Market Research:
    Don’t Fool Yourself
Market research is the vehicle for gathering
the information that serves as the foundation
for the business/marketing plan.
Never assume that a market exists for your
company’s product or service.
Market research does not have to be time
consuming, complex, or expensive to be
     What to Research –
        Nationally and Locally
Your Industry: Sales/profit trends, life cycle stage,
market share shifts, outlook, threats, etc.
Economic Conditions: Disposable income, spending
patterns, inflation, etc.
Technological Trends: New products, production
techniques, customer services, marketing, etc.
Legal/Regulatory Issues/Trends: Employment,
environment, safety, taxes, etc.
Competition: Strengths, weaknesses, barriers to
entry, indirect competitors, etc.
Quick and Easy Market Research
Look: Evaluate things around you. Evaluate new
 locations by observing vehicle and foot traffic.
 Visit competitors stores and websites to check
 prices, layout, customer mix, etc. Monitor ads.
Ask: Conduct informal surveys to determine
 customers’ likes, dislikes, wants, and don’t
 wants. Take a small group to lunch to discuss
 your plans. Use telephone interviews.
Test: Test everything, all the time.Compare
  results of different ads, media, and deals. Offer
  different products and prices to see which pulls
Quick and Easy Market Research
Read: Local chambers of commerce, trade assoc.’s,
  and various gov’t. agencies provide dozens of free
  publications. The media often provides info on their
  audience and their buying habits and patterns.
Get Help: Local service clubs and government
  funded agencies like SCORE and the SBA can help.
  Make it a class project for college students. Use the
  local library reference desk and online databases.
Watch Out: Recognize the weaknesses and biases
  of your informal research. Only use your research as
  a general guide. Confirm your findings with the
  opinions and ideas of successful entrepreneurs in
  the field and other reliable sources.
Customer Service and
Relationship Marketing
    Bad Customer Service
67% of customers who stop patronizing a business
do so because an indifferent employee treated them
96% of dissatisfied customers never complain about
rude or discourteous service, but...
  91% will not buy from that business again.

  100% will tell their “horror stories” to at
    least nine other people.
  13% of those unhappy customers will tell their
   stories to at least 20 other people.
 Focus on the Customer
Companies that are successful at retaining
their customers constantly ask themselves
(and their customers) four questions:
   1. What are we doing right?
   2. How can we do that even better?
   3. What have we done wrong?
   4. What should we do in the future?
Stew Leonard’s Video
 Relationship Marketing
Involves developing and maintaining long-
term relationships with customers so that they
will keep coming back to make repeat
Small companies have an advantage over
their larger rivals at relationship marketing.
Requires a company to make customer
service an all-encompassing part of its
Customers are part of all major issues the
company faces.
         The Relationship
Think “Lifetime Value” (LTV).
Think “80/20 Rule.”
Relationship Strategies
 Outrageous customer service
 Selling-up and cross-selling
 Referrals
 Loyalty programs
 Joint ventures
 Customized products
 Test marketing
 Online and offline communities
How to Become an Effective
Relationship Marketer
                                                                                   Enhance your products and
                           Identify your best customers,
                                                                                  services by giving customers
                               never passing up the
                                                                                information about them and how
                          opportunity to get their names.
                                                                                           to use them.

                                                                                                   See customer complaints
         Collect information on these                                                                for what they are – a
           customers, linking their                                                                   chance to improve
        identities to their transactions.                                                              your service and
                                                                                                      quality. Encourage
                                                              Successful                             complaints and then
                                                              Relationship                                 fix them!


         Calculate the long-term value                                                         Make sure your company’s
          of customers so you know                                                            product and service quality
         which ones are most desirable                                                        will astonish your customers.
            (and most profitable).

                                                         Know what your customers’
                                                        buying cycle is and time your
Source: Adapted from Susan Greco, “The Road to One-
                                                        marketing efforts to coincide
to-One Marketing,” Inc., October 1995, pp. 56-66.     with it – “just-in-time marketing.”
Example Relationship Objectives

           Ambassadors       10U/Week +10 Referrals/Wk

         (Reg Purchases)         50U/Week
          (First Purchase)          25U/Week
           (In Database)              10,000
           Target Market
     Decide Your Business Emphasis
                 Pick Any Three Squares
                Similar to   Unique from    Absolute
               Competition   Competition   Best Overall



Contrasting Marketing Models

Image Based
 Awareness/Image     Shopping & A Sale        Undefined
   Promotion                                  Market share

Database/Response/Relationship Based
   Direct    Response                    Private
 Response    • Sale                      Target Market
             • Inquiry     Database
 Promotion                               • Lifetime Value
             • Subscribe                 • Custom Programs
Customer Information Collected
      for the Database
Sources of Information        Types of Information
 Inquiries, newsletter         Name
 subscribers, and requests     Address
 for samples/freebies from     Telephone/fax
 ads and website               Email address
 Online and offline surveys    Credit card
 Warranty cards                Purchase history
 Coupon redemptions            Source of sale, contact,
 Rebate applicants              initial awareness
 Sweepstakes entrants          Income
                               Product ownership

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