ENTREPRENEURSHIP L2 NOTES

Module 2: Marketing and customer

relations

• It is not a once off event but an on-going

process that include a variety of activities.

• The purpose of marketing is to tell the world

about your business and what you are

selling

Marketing

Identifying needs and wants

• Need= something I can’t do without

• Want= something I can do without, not

really that important

• when we think about needs and wants we

also think about Maslow's Hierarchy of

needs and how needs are satisfied.

• So it is important that we keep this in mind

when considering your business idea.

• Also look at the case study on page 54.

Branding

• There are many products on the market that

satisfies the same need, i.e. cool drink, but what

makes us buy one over the other?

• The answer…………BRANDING, a brand gives

a product or service personality and we buy this

product or service because of a certain;

1.Taste (consistency)

2.Quality

3.Status we derive

4.Reliability

5.Cost

Identifying your target market

• A target market is those people who are

most likely to buy your product or service

• Knowing your target market helps you to;

1.Decide when and where to advertise

2.Determine the price of products/services

3.Select the different types of products

Criteria to describe your target market

• Age

• Income

• Gender

• Education

• location

The marketing mix

• Product- decide what you are going to sell.

• Price- determine your price.

• Promotion- how you will advertise your

product.

• Place- where are you going to sell your

products or services.

Place

• Success depends on where your business is

situated

• However not so much for some service

businesses as they go out to service a

client.e.g. a plumber

• It is therefore important that the customer is

able to see your business

• And ease of access to the business is

important as well as many consumers use

public transport to get around

Price

• Price affects your sales, if your price is to

high and your target market doesn’t earn a lot

of money then they will not buy

• If your price is to low it can also be perceived

that your products/services are of a poor

quality

• It is therefore important that we know our

target market and what they need/want and

can afford

Product/service

• A product is tangible: something I can see,

touch and feel

• A service is intangible: something that can

not be kept or stored.

• Very important to ask our selves what are we

selling and why will a customer want to buy

the product or service

• Often when buying a product a customer

buys it for the benefit he/she derives from it.

Promotion

• Is a way of informing the customer about your

products/services and/or your business

• This is extremely important as you would find

that successful companies promote

themselves and there products regularly

• This is done so that when your customer think

of a product/service you would think of them

and their products

Benefits vs. features

• Lets take a computer as an example to

explain the difference.

• Benefits derived from a PC would be that

you can type documents, print letters, listen to

music, watch movies, complete assignments.

• Features derived from a PC would be that it

has a monitor, speakers, keyboard, mouse,

etc.

Continued…….

• So the reason that we buy a computer would

be for the benefits that we get from using one,

but it is the features that help us decide which

one to buy.

Ubuntu values of the entrepreneur

• Speak and act truthfully

• Treat others as you would have them treat

you

• Recognise and respect diverse religions

• Ensure fair compensation and humane

working conditions

• Promote human dignity

Research

• Why do we do research???

• Answer: to see if our idea will work.

• Without research we cannot make informed

decisions on topics such as where to open

our business or how to market and sell a

particular product

Market research can be used to……..

• Investigate whether customers will buy a

particular product

• Investigate why products are not selling

• Investigate better methods of marketing our

products

• Investigate the change in customer needs

• Minimise the risk of a new competitor

Planning a market research project

• Step1- identify the problem

• Step2- formulate an opinion

• Step3- what kind of information do you need

• Step4- identify sources of information

• Step5- collect data from these sources

• Step6- analyse, interpret and evaluate your

performance

• Step7- report your findings

Ways of collecting data

• Primary data- data collected by the

entrepreneur, eg. Surveys, observations and

experimentation

• Secondary data- data collected by another

person. Eg. Libraries, resource centres, the

internet, product surveys, etc

Format of a questionnaire

• Section a – requires personal information

such as name, address, age, etc.

• Section b – deals with questions regarding

your products/services

Types of questions to ask

• Opening question- must be interesting and

attention grabbing

• Closed question- usually gets a very specific

response such as a yes or no answer

• Open question- where you would like a

person to give you an explanation

Promotion

• It includes the following functions

• - advertising

• - personal selling

• - sales promotion

• - customer relations

What are the goals of promotion?

• Telling customers that your business exists

• Getting customers to visit your business

• Getting customers to buy

• Convincing customers to come back

Methods of promotion

• Advertising

• Is what we see on:

• newspapers, television, radio, billboards,

pamphlets and posters.

• The goals of advertising is to produce

immediate sales, to be creative, go lean and

share resources.

• Refer to page 80 in your textbook and look at

the different advertising media and their

advantages and disadvantages.

Developing an advertising plan

• Create the message.

• - the message should reflect the image of the

business and should be consistent. The

message should also grab the attention of the

reader and should highlight the benefits of

using the products as well as features of the

product

Developing an advertising plan continued….

• Measure results:

• Keeping a record of inquiries made about the

product/service

• Prepare a advertising budget:

• Can be spread throughout the year

• Take advantage of special days

• Become creative with the budget

• Arrange advertising in advance

Using the AIDA principle:

• A- grab the customers ATTENTION

• I- develop an INTEREST in the product or

service

• D- create a DESIRE for the product/service

• A- give information that the customer can

take ACTION.

Example of an advertising plan

% of sales = budgeted monthly advertising

costs/budgeted monthly sales x 100

• = R85/R3000 X 100

• = 2.83%

Sales promotion

• Promote products/services to get customers

to buy

• Sales examples include:

• Coupons

• Buy one get one free

• Competitions

• Demonstrations

• specials

Benefits of sales promotion

• Encourages purchases of new products

• Encourages bulk buying

• Identifies new customers

• Gets rid of out of season stock