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MARKETING ADVERTIZINGINSME 2 I DefiningMARKETING 1 MarketAbodyofexistingorpotentialbuyersforspecificgoodsorservices Itisthedemandforaproduct 2 MarketingThetotalofactivitiesinvolvedinthetransferofgoodsfromtheproducerorsellertotheconsumerorbuyer 3 3 MarketingActivities BuyingStoringSellingAdvertisingPricingPromotingproductsManagingthebusiness 4 II MarketingBeforeOpening Istheproductorservicetobeofferedonethatpeoplewant Howdoyouknowthis Howmanypeoplewantit Whoarethepotentialcustomers Dotheyliveorshopneartheplaceofbusiness 5 5 Canademandbecreatedfortheproductorservice 6 Willitbetherightbusiness attherighttime attherightplace 7 Howmanycompetitorsofferthesameproductorservice 8 Howwillthenewbusinesseffectivelycompeteinpriceandquality 9 Whowillthesuppliersbeandhowgoodaretheirservices 6 III MarketingforanExistingBusiness Focusesoneffortstoidentify satisfyandfollowuponcustomerneedsatasatisfactoryprofitIncludesmarketresearchmarketstrategytargetmarketingmanagingthemarketmix 7 1 MarketResearch Definitiondetermineswhatpeoplewantbysystematicallygathering recordingandanalyzinginformationrelatedtomarketinggoodsandservices 8 MarketResearchofSmallBusinesses talkingtocustomerstalkingtoemployeesreadingnewspapersandtradejournalslookingatcompetitors andnoncompetitors advertisementsandpromotionalactivitieslookingforinformationabouttrendsinthemarketingareaservedgatheringfinancialandeconomicinformationfrombankers suppliersandtradeassociations 9 LogicalStepsinFormalMarketResearch Definetheproblemorareatobeinvestigated Assessallavailableinformation AssessadditionalinformationifrequiredbyReviewinginternalfilesandrecords Interviewingemployees Interviewingcustomersandsuppliers Organizeandinterpretinformation Makedecisions Observeandevaluateresultsofthedecision 10 2 MarketStrategy IdentifyingcustomergroupsthatsmallbusinessescanservebetterthanlargercompetitorscanTailoringproducts servicesandpromotionaleffortstothatparticularmarketsegment 11 3 TargetMarketing smallbusinessownersmayhavelimitedfundstospendonmarketingactivitiesrestrictingeffortstooneortwokeymarketsegmentsbyGeographictargetingCustomertargeting 12 4 MarketMix ProductandServicesPromotionLocationandProductDistribution 13 Marketing togivetheconsumerreasonstobuyyourproductsorservices 14 IV Advertising 1 DefinitionInformingpotentialcustomersaboutyourproduct serviceorbusinessiscalledadvertisingderivedfromtheLatin ad meaning toward and verture meaning toturn Together themeaningistoturntowardaproductorbusiness 15 2 ReasonsforAdvertising TopromoteconsumerawarenessofthebusinessanditsproductsandservicesTostimulatesalesToestablishorchangeafirm simageintheeyesoftheconsumer 16 3 ObjectivesofAdvertising 2 1 EmphasizequalityofproductandservicesAcquaintcustomerswithnewproductsPromotespecialevents suchasaclearancesale anewlocationortheopeningofanewbusinessChangethecompanyimageKeepthebusinessnameandlocationbeforethepublic 17 ObjectivesofAdvertising 2 2 Informcustomersofspecialservicesavailable suchasdeliveryservice alterationsorcreditplansIntroducenewemployeestothepublicTieinwithasupplier snationalpromotionsCapitalizeontheseasonalnatureofaproductOfferget acquaintedincentives 18 4 BudgetMoneyforAdvertising Anewbusiness 5 ofprojectedgrossrevenueonadvertising Anestablishedbusiness 2 3 ofgrossrevenue Advertisingisnotmerelyanitemofbusinessexpense rather itisaninvestmentinbuildingyourbusiness 19 5 AdvertisingMedia 1 Selectioncriteriacosteffectivenessschedulingtradingareacustomertypefrequencyofmessage 20 2 TypesofMediaAvailable TelephonesolicitationBusinesscardWordofmouthBusinessstationery 21 BusinesssignsStorefrontInteriororpointofpurchasedisplayVehicles 22 ShoppingbagsYellowPagesDirectmailLocalnewspapersLocalradioTelevision 23 OtherMeansofAdvertising Calendarspens skywritingpointofpresentation flyers brochures samples advertisingshouldberepeated yes repeated asoftenaspossible 24 V Pricing 1 TypesofCostsFixedcostsCoststhatremainthesameinanytimeperioddespitechangesinbusinessactivity overhead VariablecostsCoststhatusuallyvaryinproportionwithbusinessactivity 25 2 CalculatingtheCostofaService thechargeforaserviceequalsmaterialspluslaborplusoverhead withaprofitbuiltintoeachcomponentdeterminingthenumberofhoursavailableforbillinginayearcalculatethebreak evenpointbydividingtheoverheadandlaborchargesbythebillablehoursandaddingthecostofanymaterialsuseddesiredprofitaddedtothebreak evenpoint 26 Example DWARepairServiceemploystenrepairtechnicians whoarepaid 18 000each SocialSecuritytax unemploymenttax workers compensationinsurance healthinsuranceandretirementbenefitscostanadditional 5 400each foratotalcostof 23 400 Becausetherearetentechnicians theyearlylaborchargeis 234 000 27 DWARepairService soverheadexpenses 28 TobreakevenDWARepairmusthaveatotalrevenueof 234 000 labor plus 98 000 overhead 332 000calculatingthebillablehoursWorkdaysperyear 52weeksx5days 260days Subtracting15vacationdays 7sickdaysand8holidaysleaves230workdays Workhours 230workdaysx8hours 1 840peryearforeachrepairtechnician losttimebetweenjobsdeducts10percentofthehoursasnonbillable leaving1 840 184 1 656billablehourspertechnician Becausethereare10technicians thetotalbillablehours 1 656x10 16 560peryear 29 hourlylaborcostdividesthelaborcostperyear 234 000 bythebillablehours 16 560 Theresultis 14 13perhourtotalcostTotaloverheadperyearis 98 000dividedbybillablelaborhoursof16 560 overheadequals 5 92perhour Thetotalhourlycostoflaborplusoverheadis 14 13 5 92 20 05 30 Calculationoffinalhourlyrate Profitablepricing 31 3 PricingProductsProfitably 1 Profithasjustthreeingredients costs sellingpriceandsalesvolume2 CompetitionPricingBelowCompetitionPricingAboveCompetitors3 MarkdownsAmarkdownisareductioninthepriceofanyitembroughtabout
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