- Explain the purpose of market segmentation.
- Describe the importance of selecting a target market.
- Explain why its important for a start-up to establish a unique position in its target market.
- Describe the importance of the ability to position a company’s products on benefits rather than features.
- Illustrate the two major ways in which a company builds a brand.
- Identify the four components of the marketing mix.
- Explain the difference between a core product and an actual product.Contrast cost-based pricing and value-based pricing.
- Explain the differences between advertising and public relations.
- Weigh the advantages and disadvantages of selling direct versus selling through intermediaries.
Process of Selecting a Target Market
The Four Ps of Marketing for New Ventures
Product
- Is the good or service a firm offers to its target market.
- The initial rollout is one of the most critical times in the marketing of a new product.
- All firms face the challenge that they are unknown and that it takes a leap of faith for the first customers to buy their products.
- Some startups meet this challenge by using reference accounts.
Price
- Price is the amount of money consumers pay to buy a product.
- The price a company charges for its products sends an important message to its target market.For example, Oakley positions its sunglasses as innovative, state-of-the-art products that are both high quality and visually appealing.
- This position in the market suggests a premium price that Oakley charges.Most entrepreneurs use one of two methods to set the price for their products, as shown on the next slide.
Promotion
- Refers to the activities the firm takes to communicate the merits of its product to its target market.
- There are several common activities that entrepreneurs use to promote their products and services.
Public Relations
- One of the most cost-effective ways to increase the awareness of the products of a company is through public relations.
- Public relations refer to efforts to establish and maintain a company’s image with the public.
- The major difference between public relations and advertising is that public relations is not paid for—directly.
Place
- Encompasses all the activities that move a firm’s product from its place of origin to the consumer.
- The first choice a firm has to make regarding distribution is whether to sell its products directly to consumers or through intermediaries (such as wholesalers and retailers).
- Within most industries, both choices are available, so the decision typically depends on how a firm believes its target market wants to buy its product.
