Entr Marketing Final Exam

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Mitch Bobitt Entrepreneurial Marketing Dennis Jordan May 10, 2019 Final Exam 1) Based on the textbook, briefly describe the different criteria to select target markets and why are these criteria important? The first criteria in selecting target markets is that the customers within the target market must have similar needs. This is important because once you group customers into segments based on their needs, you are then able to determine if the product/service that you are offering can meet those needs. The second criteria is that there must be differences in needs across customer segments. The third criteria is that the segments must be measurable by either size, location, or profile. This is important because it tells you how large your target market is, the demographic details of the target market, and allows you to figure out how to market most effectively. The fourth criteria is that the target market must be big enough to serve economically. This criteria is important because it lets you know whether or not an opportunity is worth pursuing. If the target market is too small, marketing a product/service will be much more difficult and your venture will likely be unsuccessful. The final criteria is that there must be a way to reach the target market. This is important because if you realize that you can’t reach your target market, you’ll know that the opportunity probably should not be pursued. 2) Based on the textbook, briefly describe the characteristics that are inherently part of successful new products and services. The first characteristic that is inherently part of successful new products and services is that there is a superior advantage. This means that the customer should perceive the product to be superior to existing alternatives on the market, and it can be based on either a better

price or a better performing product that the customer is willing to pay for. The second characteristic is compatibility. This means that the product or service you are providing is aligned with the values, attitudes, and norms of customers. The third characteristic of successful new products and services is simplicity. If the product you are offering is difficult to understand or use, it’s more likely to be unsuccessful. The next characteristic is observability, which refers to how easily the products innovative characteristics can be either observed by or communicated to the customer. Next, trialability is an important characteristic of new products/services. If a product/service can be purchased on a trial basis, it is likely to be more successful than one that cannot be tried before actual purchase. The sixth characteristic is low perceived risk. A new product/service that is perceived as being a low-risk purchase is more likely to succeed than one with high perceived risk. The final characteristic of successful new products and services is intellectual property protection. This is not always extremely important to customers, however if your product has an intellectual property component, it offers you a possible competitive advantage or protection from encroachment by competitors. 3) Based on the textbook, what are the characteristics of a good brand and give an example. The ten characteristics of a good brand are as follows: 1) Effectively communicates the distinctive value that you wish to offer the customer 2) Is relevant to the customer 3) Resonates with the customer 4) Reinforces the company’s intended positioning in the marketplace 5) Is consistent and unifying 6) Serves as an umbrella for current/future brands in the company’s portfolio 7) Allows for the building of strong brand equity 8) Enables you to command premium pricing 9) Is easily understood by your customers and employees

10) Can be sustained over time An example of a good brand would be Patagonia. This is a brand that meets all of the characteristics of a good brand that are stated above. Patagonia communicates with customers their values (such as environmental awareness), is relevant to their customers (many people who enjoy outdoor activities choose Patagonia over other similar brands), has built a strong brand equity, and can be sustained over time. By meeting all of the characteristics of a good brand, Patagonia has become the first choice of its target market when choosing outdoor gear. 4) Based on the textbook, what are some good suggestions for making pricing decisions? One suggestion for pricing a product or service is to have a good understanding of your costs of being in business. By doing this, it allows you to determine what revenue you may require to sustain the business. Another strategy for pricing a product/service is to consider what your competition is charging customers. By performing a competitive analysis, you’ll be able to establish the “going rates” for products that are similar to yours. Another suggestion that the textbook offered on making pricing decisions is to determine the customer’s willingness and ability to pay for your product. This strategy focuses on the demand side of the business, and allows you to determine the maximum amount that customers would pay for a product/service. When considering customer-based pricing, it’s important to know that if customers have a strong desire for the product, charging a high initial price is an option (skimming pricing). On the other hand, if your target customers are price-sensitive, you’ll want to use a low initial price (penetration pricing). 5) Based on the textbook, briefly describe the four things an entrepreneur must consider when choosing a distribution channel strategy. When choosing a distribution channel strategy, it’s important to consider the following four criteria. First, “effectiveness” refers to how well the channel strategy is able to

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meet the needs and requirements of the customers you are trying to reach. Second, “market coverage” is important. This refers to the customers’ ability to find and appreciate the value of your venture’s offerings. The third criteria is “cost-efficiency/profitability,” which describes how the venture can gain access to customers in a cost-efficient way and achieve profitability. Lastly, “adaptability” is important, which refers to how the distribution channel can handle new products or services as well as how it can incorporate emergent channel forms. 6) Based on the textbook, what are the strengths and weaknesses of the basic promotional techniques and which made the most sense for your marketing plan? 1) Advertising - this is the use of paid media by an identified sponsor to communicate information about a product or service to specified target customers. The strengths of this technique are that it allows you to reach a broad audience quickly, it’s efficient, and it grabs peoples’ attention. The weaknesses are that it can often be very expensive, it’s difficult to measure the effectiveness of advertising, and customers could become skeptical of your product or service. 2) Public relations- this is a type of communication that is designed to create a positive image about a company and its products or services. The strengths of PR are that it has credibility and it provides more information about the company than advertisements. The weaknesses are that public relations are sometimes difficult to obtain, and for it to be effective, it needs media cooperation. 3) Sales promotion- this is a short-term inducement of value offered to gain customer interest in buying a product or service. The strengths of this technique are that it can stimulate sales, and there’s many different methods of promoting your product, such as by offering coupons, deals, or samples to customers. The weaknesses of sales promotion are that it has the potential to be abused by customers, or it could cheapen the product in the minds of customers if the methods are used too often. 4) Personal selling- this is a two-way flow of communication between the buyer and seller, and it’s designed to influence a person’s purchase decision. It’s often

implemented by face-to-face communication or over the phone. The strengths of this technique are that you can immediately see the customer’s reaction, gain instant feedback, and create a relationship with the customer. The weaknesses are that it can be expensive, and different sales people can change the message making it inconsistent to all customers. 5) Direct marketing- this technique uses direct communication with consumers to generate a measurable response in the form of an order or a request for further information. This technique could be applied through mail, over the phone, or online marketing. The strengths of direct marketing are that it can be customized to match the needs of a specific target market, and it can quickly create one-on-one relationships with customers. The weaknesses are that the customer might not buy the product/service if they are unfamiliar with the company, and managing a large database can become expensive. For my marketing plan (Badger Vodka), I think that advertising online would be the best technique for promoting my product. Especially through the use of social media, I think that this method would best allow me to reach my target market quickly and generate brand awareness. As well as internet advertising, I think that advertising via newspaper articles and promotional posters would also allow me to reach my target market.

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