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Developing the marketing mix: Part 2

Course video 19 of 30

Marketing mix, sales forecasting, and managing the sales pipeline

Entrepreneurship Capstone

Université du Maryland, College Park

Cours 4 de 4 dans Entrepreneuriat : lancer une entreprise innovante Spécialisation

Integrate the tools and concepts from the specialization courses to develop a comprehensive business plan. Choose to enhance new venture concepts previously explored in specialization courses, or develop a new concept for this capstone project. Develop a comprehensive, customer-validated business model and create an investor pitch for the concept. With this course, students experience a sampling of the ideas and techniques explored in the University of Maryland's master's degree in technology entrepreneurship, an innovative 100% online program. Learn more at http://mte.umd.edu.

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Compétences que vous apprendrez

Venture Capital, Financial Statement, Finance, Entrepreneurship

Enseigné par

Dr. James V. Green
Director of Entrepreneurship Education

Transcription

In part one of the marketing mix, we looked at the product and

we talked about the price.

Now we'll transition into promotion and discuss some of these key elements.

So promotion happens in lots of ways.

As we continue with the flip ultra camcorder.

What we see here are Facebook ads, Facebook likes.

That's certainly something to consider is social media.

As you're building your brand and building your product.

We see paid placement.

So in this context, we see promotion of the camcorder.

And the shopping results when people are searching on video camcorder.

The Flip Video Ultra Camcorder,

if displayed multiple times in multiple places.

Some of these might be funded by the company itself.

Other ads are gonna be sponsored by the retailers.

That are sourcing their flip camcorders.

Print advertising, there's something to remember.

There is still tremendous opportunities and value in doing print advertising.

In certain cases.

Now advertising is something that is typically more expensive in print.

You may spend $20,000 on a one time add, that runs once in a national magazine.

Now is that money well spent?

Don't necessarily discount it and say well it feels like a lot.

Instead, compare it.

Look at if I spent $20,000 on print advertising,

versus $20,000 in online advertising.

Versus paying someone $20,000 to run a social media campaign.

And look what youre expectancy would be of the outcomes of that.

Think about what kind of sales should that generate.

If I spend 20,000 in one place is it going to generate 30 or

40 thousand dollars in revenue.

If I spend 20,000 dollars somewhere else,

would it generate 100,000 dollars in revenue.

So we wanna think about those trade offs.

Also, think about direct mail.

Direct mail is something that a lot of companies use.

Many of us get a lot of advertising in the mail.

The reason we get advertising in the mail is because it often works.

The response rates may be low, but because the price to do it is low for companies.

It's something to consider.

So before you jump right in and say,

well i'm only going to do social media marketing.

Well that doesn't always work.

Before you say I'm not gonna do print or i'm not going to do direct mail.

Well look at the cost.

Do some research.

If $20,000 is too much to spend, as I expect it is.

Do something smaller.

Do a more local piece.

Do a pilot.

Do a small run.

Do a small rad.

And see how that works.

So I encourage you to experiment in doing a few things.

And don't dismiss print advertising prematurely.

The last element we're gonna talk about within the marketing mix is the place.

You can buy video phones in lots of places.

There are online vendors.

There are face to face vendors.

And you may think, well why are they in so many places?

Well, part of it's based on who you're trying to serve.

Amazon makes a lot of sense for almost any product.

Because of just the dominance they have in doing online sales.

Best Buy makes a lot of sense, because a lot of people with consumer electronics.

Particularly, of this category want to touch it and feel it and

see it and hold it.

So for the customers that want that tactile inspection,

it's a value to be in a retail.

What you may find too, is that not every town has a Best Buy.

But many towns have a Walmart.

So, a different category of customer, particularly geographically.

That they may be able to reach by being in Walmart,

that they would not get if they were only in Best Buy.

So in that context too you want to think about what are the landscape

of distribution channels.

That may make sense for you.

What sometimes you see as well is its

sometimes hard to get on the shelf at Target.

Its hard to get on the shelf at Walmart as a start up.

But there are smaller companies, regional retailers.

Independently owned retailers that you may start at and demonstrate success there.

So in some cases you grow your way into larger companies.

But you still are carried with the smaller companies that you began with.

What we saw with the flip video phone was that they had a lot of success.

They had success to the point that Cisco bought them in 2009 for $590 million.

So a small startup, started a pretty novel device.

That was affordable and accessible and had a nice feature set.

They did a good job at building the product.

They did a great job in pricing the product.

They did a wonderful job in promoting the product.

And they were very effective at placing the product.

And that made them very attractive to Cisco and they were bought.

And then less than two years later they closed down the entire operation.

So in March of 2009 that $590 million company was essentially worth nothing.

So why? Well there was something that

came along called the smart phone.

And a few years before that, and some people had a smart phone.

And a Flip ultra camcorder or some other small camcorder.

But as the smart phone got better.

As the customer needs and wants changeed.

And as the smart phone feature set began to be more significant.

It was more a direct threat and a direct competitor and

more of a all in one device.

And so in that way market planning.

May have caught Cisco a bit by surprise.

So, in that way, just because you have a great product idea.

Just because you price it right, just because you promote it well.

And just because you placed it effectively,

you don't wann to get comfortable with that.

New competitors are ever present and products are gonna change and

products are gonna evolve.

So in that way, you don't wanna get comfortable in building one product.

And letting it ride.

And so, when you think about your business models and your business plans.

Many of us get very preoccupied with what is the first product.

What is version one of the product?

And we don't give a lot of consideration to what may come thereafter.

But you can see here what may happen.

And that you may be left with something that may have a burst of excitement.

And a birth to profitability, but it quickly weans and quickly fades.

So think forward to building a company of multiple products in time.

And not just building a product that may have a short shelf life.

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